It’s deja vu for the pharma industry. Mylan’s ($MYL) EpiPen pricing controversy--kicked into high gear last week with mainstream media coverage of widespread outrage--has revived public and political fury against drug companies.
The public's disdain is at a high in part thanks to a gaping lack of perception on the part of Mylan CEO Heather Bresch, who recently told CNBC about the company's steady price increases that "no one's more frustrated than me." But that disdain also extends to the broader industry.
“When it comes to people and healthcare, pharmaceutical companies should take note of these recent debacles. Perhaps it’s time to realize that for them, it’s not just about doing good business. Because their business is human health, it’s also about being a good business,” Forbes columnist Emily Willingham wrote recently.
Drug pricing has fueled the burn of the entire industry’s reputation over the past year or so. From price hikes on old drugs by Turing Pharmaceuticals and Valeant ($VRX), to pricey new tags on revolutionary treatments a la Gilead ($GILD), all of pharma is lumped time and time again into a monolithic industry of detached greed.
“The public’s hatred of this industry is an incredible thing. They create life-saving drugs, but, because of their greed, people can’t afford them. What good is a life-saving drug if you can’t get it?” wrote a Los Angeles Times columnist recently, quoting an AIDS healthcare advocate.
The Reputation Institute reports that the global pharma industry reputation has languished since 2014. Its rating is currently 67.5, with anything over 70 being strong and anything over 80 being excellent, said Stephen Hahn-Griffiths, vice president and managing director for the Reputation Institute in U.S. and Canada.
“There are questions around corporate social responsibility intentions of global pharmaceutical companies. What are they doing to make the world a better place? Yes, they may be saving lives, but of course, they’re making a fair living too,” he said. “I think it’s fair to say the jury is out on almost every pharmaceutical company on those dimensions.”
But if drugmakers want to improve in the eyes of the public, they can look to Bayer and Novo Nordisk ($NVO), which are two of the top pharma companies in its rankings, Hahn-Griffiths said. Both are purpose-driven companies with strong and transparent corporate social responsibility programs.
And if they don’t have the resources to build a good corporate social responsibility agendas and invest money in storytelling?
"The least you can do is operate with the highest level of honesty, integrity, openness and transparency,” he advised. “That’s not just something every pharmaceutical company should do, but absolutely needs to do in the 21st century. There’s just nowhere to hide anymore.”
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