Up in Smoke

It's distressing to watch pharma trying to respond to its critics these days. When an industry is under attack, the first defense is often to preach to the choir, tiptoe around the issues, and adopt an aggrieved, defensive tone. This approach has been employed by pharma for a while now, and it doesn't seem to be working.

Sarah Wealleans

It's important for pharma to remember that other industries, such as big oil and tobacco, have gone through a similar fall from grace. And though their situations aren't quite the same, there is a lot to be learned from their experiences.

In particular, pharma could do far worse than to pay attention to what has happened to tobacco in the past decade. At the Economist's annual Pharmaceutical Roundtable last fall, Steven C. Parrish, senior vice president of corporate affairs for the Altria Group (the parent of Philip Morris), gave a striking speech about trying to rebuild the company's reputation. Nine months later, his advice seems more relevant than ever:

Listen to the outside world In talking with top pharmaceutical companies about their corporate reputations, I've been amazed to hear that they have little or no research to qualitatively understand the public's grievances. They make assumptions: People are just parroting what they hear in the media, or companies can counter people's feelings about high prices and inaccessibility of medicines simply by pointing to patient assistance programs, senior discount cards, and the money reinvested in R&D. Executives seem incredulous that people don't see the world the way pharma companies do.

They're on the wrong track."Accept the distortions and untruths," Parrish says. "Don't try to undo them." The point is not to win an argument; your critics' views are legitimate, irreversible realities. It's time to give the public something new to think about.

Stop advertising the industry, start defining your brand In giving the public something new, it won't be enough for companies to rely on organizations like PhRMA to fight their cause. It's too late for that. It is also too late for companies to invest in advertising campaigns that address accusations against the industry. (GSK's tagline, "Today's medicines finance tomorrow's miracles," is a case in point.) Rather than spend on advertising, companies need to start to embrace "Branding 101" principles and try to carve out a distinct, transcendent place for their corporate brands. Critical work needs to be done to identify a unique strategic platform—a way to break the brand away from the industry and its woes.

Every aspect of branding should be looked at. For example, pharma companies have been hesitant to associate their corporate brands more strongly with their well-known—and often well-liked—drugs, reasoning that distance protects the corporate brand when a negative event occurs with an individual medicine. Does it work? Look how quickly the media made the link to Merck once the Vioxx story broke.

When a crisis like Vioxx emerges, the "one bad apple" effect comes into play. When that happens, Parrish explained, if you haven't distanced your brand from others and created differentiated positive associations, you're in danger.

A brand is a promise, not lipstick on a gorilla One critical final lesson must be remembered: If you want to break away from an industry that suffers from negative publicity, it's going to take a lot of convincing and proof. To transcend stereotypes, you need breakthrough actions and initiatives. Branding and communications will play a role, but they won't do the job by themselves.

As Parrish put it, "Actions may not always speak louder than words, but words without actions will fall on deaf ears." Philip Morris is now more of a collaborator than a combatant with FDA and WHO. It invests millions in its Youth Smoking Prevention campaign and in new product development to try to address many of the criticisms leveled against the company.

As 2005 progresses with the pharmaceutical industry still in the headlines, how much more reputation damage will be endured before someone is bold enough to break away?

Sarah Wealleans is associate director, strategic services for Landor Associates. She can be reached at sarah_wealleans@nyc.landor.com