Report cards could be just what pharma needs to get back to respectability

Pharma companies can work to fix their damaged industry reputation by adopting benchmarks and a ratings system, proposed one nonprofit company.

In 1997, 79% of people in the U.S. believed pharma companies were honest and ethical. Today that percentage has plummeted to just 10%.

But one researcher has an idea about how to reverse the slide. Take a page from other beleaguered industries and establish a transparent ratings system, says Jennifer Miller, founder of independent nonprofit ethics reviewer Bioethics International and an assistant professor at New York University School of Medicine. Bioethics has developed the Good Pharma Scorecard, which ranks large pharma companies and FDA-approved drugs using publicly available data around benchmarks it has developed in key areas of ethics, human rights, and public health.

The company is getting ready to release its second assessment with scores for pharma companies and the 2014 crop of FDA-approved drugs. Bioethics International put out its first scorecard report in late 2015 for the 20 largest drug companies and their drugs approved in 2012. A $3.6 million grant from the Laura and John Arnold Foundation allowed the company to expand to all drugs approved in 2014.

Miller came up with the idea at Harvard while studying other industries that have dealt with quality or reputation problems. She found that many now have an accrediting or rating system that not only defines what a good company looks like but also serves to signal to stakeholders when companies are making the grade.

For instance, the tuna industry has dolphin-safe labeling, and the diamond industry has the Kimberley Process to identify stones as not being conflict or “blood” diamonds. Even the hospital industry has the Hospital Compare system, created through CMS.

And pharma, whose reputation is a much bigger problem than just a general bad feeling about the industry, could use a turnaround fast. Miller quickly listed eight cascading effects of the sliding reputation: Doctors hesitate to prescribe drugs, patients hesitate to take new drugs, it becomes more difficult to recruit subjects into trials, regulators can create reactive regulation, regulators may take longer to approve new drug applications from companies with bad reputations, payers may hesitate to reimburse, journals may waver on publishing industry data, it becomes harder to recruit subjects into trials and it becomes harder to retain or attract talent.

And the industry's marketing initiatives won't be enough to fix the problem, Miller said.

“The industry sees the problem and says we’re going to market our way around it. And marketing is a great strategy, but you really also have to do what other industries have done, which is define what good practices look like and signal to stakeholders when they’ve been implemented,” she said.

While it has taken her time to build credibility with pharma, she said the companies are now “incredibly receptive” to the idea and have even adopted the benchmarks inside their own companies.

“History shows people don’t trust companies when they say 'trust us,'” she said. “Pharma is too far gone to do that. They need an independent third party to validate their comments with data and honest benchmarks.”