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Feature

Why corporate social responsibility is healthy for pharma

Posted on: 21 Jul 05
Why corporate social responsibility is healthy for pharma

Summary

Like other major business sectors, the pharmaceutical industry is under constant scrutiny regarding the way it operates. In recent years, the concept of corporate social responsibility has grown in importance. CSR is often discussed at the highest levels of companies, but there are a variety of interpretations as to what it actually means.

Image damage


Like other major business sectors, the pharmaceutical industry is under constant scrutiny regarding the way it operates. Since there is an ever-continuing rise in interest by the media and the public in the type of healthcare service being offered, pharmaceutical companies cannot avoid being caught up in the discussion of such issues. Medicines produced by the pharmaceutical industry are a key part of the delivery of an effective health service. Media coverage of the pharmaceutical industry’s activities has often been negative and whether they like it or not companies have to pay greater attention to their public image (1). Unfavorable and unfair headlines are becoming unavoidable and so efforts to counter them must become a greater priority for the industry (2, 3). As the industry itself recognizes, this is no easy task in the modern media age and so a sophisticated approach is required (4).


 


What is clear is that public perception cannot be ignored, particularly since healthcare is a major election issue and voter opinion will have an impact on a government’s policies. For example, in 2002, the US seniors group AARP accused some pharmaceutical companies of using "front" groups that purported to represent the elderly and released messages that favored the industry’s point of view on issues such as pricing (5). These types of claims often achieve major coverage in the press and can be highly damaging to the pharmaceutical industry. It is particularly unfortunate since they can overshadow the pharmaceutical industry’s vital role in researching and developing new medicines (1). Many diseases that previously had a devastating effect on society are now well-controlled and so this can lead to the industry’s role in healthcare being taken for granted (6).


 


New thinking


In recent years, the concept of corporate social responsibility (CSR) has grown in importance. CSR is often discussed at the highest levels of companies, but there are a variety of interpretations as to what it actually means (7). Issues such as respect for employees, environmental responsibilities, relationships with local communities and fair trade with developing nations often feature as part of CSR (7). In truth, it is probably impossible to find a strict definition that suits all companies and their activities. CSR can be subjective relying on interpretations of how commercial activities are perceived in terms of integrity, fairness and respect for individuals (7).


 


As a business operates to generate profit, those advocating CSR are essentially asking companies to look beyond how their decision-making impacts on commercial activities and examine the effect on the society around them. This is no easy task, since an activity that generates money for the company could actually be perceived negatively in the context of CSR. Interestingly, the economist Milton Friedman believed that CSR was misguided as the main responsibility of a business was to generate profit (7, 8). However, other economists do not look at CSR in such a strict manner. In fact this point of view is easily countered as businesses depend on the society that surrounds them and their staff will be influenced by what takes place outside a company’s boundaries. In a pharmaceutical context, outside a company staff members are consumers, who like every other patient, will be seeking affordable medicines for themselves and their families. Furthermore, they will be interested in global issues and will naturally have an opinion on how their company operates on an international basis. Therefore those involved in devising pharmaceutical company strategy should not have great problems in identifying the issues that are considered important by the public.


 


Facing up to responsibilities


CSR is unavoidable in the modern world and the concept should be embraced rather than feared - and implemented rather than just discussed. Many issues fall under the umbrella of CSR and companies need to examine what is relevant to them and is achievable. CSR should be viewed as an investment for the company and worked at. After all, the industry does not operate in isolation from the rest of society, particularly since its employees and stakeholders are drawn from the wider community.


 


Many companies in the pharmaceutical sector are moving in this direction. Some companies have won awards for their CSR credentials and this undoubtedly raises their profile amongst the public (9-11). In particular, from a staffing point of view, people will be attracted to work for a company that has a positive, dynamic image. Companies are also taking a more visible stance on global issues. Recently, many pharmaceutical companies joined with international healthcare charities, and not-for-profit organizations in signing an open letter to the G-8 leaders calling for them to address healthcare issues affecting developing countries and provide incentives for the private and public sectors to work together in resolving the situation (12).


 


The pharmaceutical industry has nothing to gain from the public taking a negative view of its activities, but everything to gain from demonstrating to them that companies are an essential part of healthcare. Without the pharmaceutical industry and the commercial forces that it harnesses in R&D, many drugs would not reach the market. A commitment to CSR is in the industry’s interests in order to prove this point and to encourage greater understanding of the industry’s work by the public. After all, pharmaceutical companies run clinical trials to develop their products and this requires patient participation.


 


Companies must also look at their commercial decisions in a wider context and openly address the issue of affordability, as governments are increasingly shifting healthcare costs to patients. If a product is to succeed long term in a highly competitive market then the support of patients is vital. There are numerous examples of patient loyalty to a good product that they trust to improve their quality of life.


 


References


1.            Kermani F. (2004). Is image everything? Inpharm. 30 November 2004. http://www.inpharm.com/External/InpH/1,2580,1-3-0-0-inp_intelligence_art-0-287636,00.html


 


2.         Roner L. (2005). Rebuilding pharma’s reputation with one blink. Eyeforpharma. http://www.eyeforpharma.com/index.asp?nli=o&g-p&nld=3/17/2005&news=45377


 


3.            Marshall T (2005). Changing the headlines. Inpharm. 4 February 2005. http://www.inpharm.com/External/InpH/1,2580,1-3-0-0-inp_intelligence_art-0-308405,00.html


 


4.         Anon (2004). IFPMA takes steps to improve its lobbying. Scrip. No. 3002. 5 November 2004.


 


5.            Moynihan R (2003). US seniors group attacks pharmaceutical industry "fronts". British Medical Journal. 326:351. http://bmj.bmjjournals.com/cgi/content/full/326/7385/351


 


6.            Kermani F. (2004). All quiet on the vaccine front? Pharmiweb. 22 October 2004. http://www.pharmiweb.com/features/feature.asp?ROW_ID=510


 


7.            Donaldson T (2005). Defining the value of doing good business. Financial Times 2 June 2005. http://news.ft.com/cms/s/748f21be-d377-11d9-ad4b-00000e2511c8,dwp_uuid=1d0ff528-c86c-11d9-87c9-00000e2511c8.html


 


8.            Friedman M (1970). The Social Responsibility of Business is to Increase its Profits. The New York Times Magazine, September 13, 1970. http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html


 


9.         Anon (2005). Awards & Recognition. Genentech. http://www.genetech.com/gene/about/corporate/awards/index.jsp


 


10.       Anon (2005). Rankings, Ratings & Awards. Abbott Laboratories. http://abbott.com/corporate/awards.cfm


 


11.       Anon (2005). Pfizer Businesses: Pfizer Global Research & Development. http://www.pfizer.com/pfizer/are/careers/mn_businesses_pgrd.jsp


 


12.       Anon (2005). Open Letter to the Leaders of the G-8 Nations. The Global Alliance for Vaccines and Immunization. 17 June 2005. http://www.vaccinealliance.org/resources/PPPletter_17Jun2005.pdf


 


 


 


 


 


 

Dr Faiz Kermani

Last updated on: 27/08/2010 11:40:18

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