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What the Pharmaceutical Industry Must Do to Regain Trust

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Pharma has been taking it on the chin for some time now.  It’s been targeted by activists, bloggers, politicians and reformers. Next to Wall Street, it’s one of today’s least trusted industries.

 
But until last week, much of the industry’s response had the flavor of, “if people only knew the whole story,” or “they just don’t appreciate the good we do.”

Fair enough, perhaps.  But no longer good enough.

Last week, the industry drew negative cover-page articles in two iconic, industry-friendly major publications.

Et tu, Advertising Age? From the trade magazine of an industry that benefits enormously from Pharma comes this tabloid-like headline:

Vytorin Ad Shame Taints Entire Marketing Industry

 

Cholesterol Drug’s Ad Campaign Turns Into PR Nightmare, Fanning Flames of Public Mistrust of DTC.

Reports that Merck & Co. and Schering-Plough Corp. kept under wraps for more than a year findings that Vytorin does not deliver results it spent more than $100 million advertising to consumers is much more than a PR disaster for the drug’s co-marketers. Coming on the heels of a New York Times story that Pfizer’s $2 billion drug Lyrica treats a condition, fibromyalgia, that a lot of doctors don’t think exists, the Vytorin news is fanning the flames of public mistrust for the $5 billion direct-to-consumer drug industry — and the ad business in general.

"The pharmas are in big trouble in terms of credibility," said brand expert Rob Frankel, who runs his own consultancy at RobFrankel.com. "They’re just above Congress and used-car salesmen."

Talk about biting the hand that feeds you.

But the topper has to be making the cover story on BusinessWeek:  Do Cholesterol Drugs Do Any Good?

 

Never mind the typically well-researched and well-written critique of the industry; never mind the bad press Merck and Schering-Plough got for the Vytorin data, coming on the heels of the Vioxx lawsuits; never mind the bevy of critical testimonials the article digs up.

The plain fact is, once Ad Age and BusinessWeek put you on their covers—in nakedly negative terms—it’s time for some basic re-examination.  Low trust is not a surprise to the industry—but this is a wake-up call about the failure of the industry’s response to date.

One of the major pharmaceutical firms (because it’s not likely to be PhRMA, the industry’s trade association) needs to find a voice and take a leadership role—to speak what has become obvious to the world outside Pharma, as represented by leading business publications.

The message is this: the only way to resolve the industry’s trust issues is to become trustworthy—worthy of trust.

• Trust will not be regained by “educating” the public.

• Trust will not be regained by “getting the message out.”

• Trust will not be regained by improving your PR; your PR will be improved by regaining your trust.

• Trust will not be regained by framing it as a problem of image, marketing, or perception.

• Trust will not be regained by coordinating, refining or sharpening talking points; the problem is not getting the message out—it’s listening to the market to hear the message coming in.

The good news is, there are a great number of very well-intentioned, smart people in this industry, who are deeply pained at having been demonized the way they have been.  Some are courageously beginning to face up to it.

It won’t be easy for them. Twenty years of success, blockbuster drugs, and an overdose of marketing culture erects barriers to even their good intent.

Further, any gain in trustworthiness must be broad-based.

It won’t be enough just to help sales forces become listeners, rather than shills—though that will help. It isn’t enough to wean physicians from the “consulting” and “education” fees they reap—though that will help. It isn’t enough to deal with the appearance of conflict in researchers and journals’ affiliations with pharma funding—though that will help. It isn’t enough to seek business models beyond patent-stretching, features-tweaking and disease creation—though that will surely help. 

It is an industry whose beliefs and practices have become encrusted, making its untrustworthiness opaque even to those who most sincerely would reform it.

So, what will it take?

• Courage, for one. Which does exist; there are some fine people in pharma.

• Brains, for aother. Again, pharma is blessed. The trick is to turn those brains loose; to use the courage to think boldly, examine anew.

• Transparency is required too, though even that is hampered by layers of regulation brought upon itself by the industry’s own past practices.

• But above all, the industry needs a sense of urgency.  Not just business urgency, but a personal willingness to face some  shame, or disgust, or revulsion; something that comes from the gut and says, “you know, we are better than this; we can do better than this; and I for one have had it.”

I can’t think of any industry where the trust gap between what is and what could be is larger, and where the social cost of that gap is greater. It is in society’s best interest to have a trusted pharmaceutical industry. At its best, the pharmaceutical industry saves hundreds of thousands of lives, and adds quality of life to millions.   We are paying gazillions in cost, red tape, suspicion, and lost or devalued lives because of its absence.

We should all be rooting for this industry to heal itself.

The first step is admitting you’ve got a problem.

Digital and Analogue Social Networks and Pharma

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Here are two big trends in marketing:

Trend 1. Companies organize programs around the customer. This is often called customer-centricity.

Trend 2. Customers are in charge of interactions. This also gets called customer-centricity.

When two phenomena get called by the same name—opportunities for merriment—and suffering—ensue.

Case 1—the occasionally obtuse but always interesting Harvard Business School Working Knowledge series.  In Authenticity over Exaggeration: The New Rule in Advertising,  Julia Hannah explores HBS professor John Deighton and Leora Kornfeld’s "Digital Interactivity: Unanticipated Consequences for Markets, Marketing, and Consumers."  An extract:

5 new rules of digital interactivity:

• Thought tracing. Firms infer states of mind from the content of a Web search and serve up relevant advertising; a market born of search terms develops.

• Ubiquitous connectivity. As people become increasingly "plugged in" through cell phones and other devices, marketing opportunities become more frequent as well—and technology develops to protect users from unwanted intrusions. A market in access and identity results.

• Property exchanges. As with Napster, Craigslist, and eBay, people participate in the anonymous exchange of goods and services. Firms compete with these exchanges, and a market in service, reputation, and reliability develops.

• Social exchanges. People build identities in virtual communities like Korea’s Cyworld (90 percent of Koreans in their 20s are members). Firms may then sponsor or co-opt communities. A market in community develops that competes on functionality and status.

• Cultural exchanges. While advertising has always been part of popular culture, technology has increased the rate of exchange and competition for buzz. In addition to Dove’s campaign, Deighton cites BMW’s initiative to hire Hollywood directors and actors to create short, Web-only films featuring BMWs. In the summer of 2001, the company recorded 9 million downloads.

These 5 aspects show increasing levels of effective engagement in creating social meaning and identity, Deighton suggests, noting that the first 2 (thought tracing and ubiquitous connectivity) change the rules of marketing but don’t alter the traditional paradigm of predator and prey.

In the last 3 (property, social, and cultural exchanges), the marketer has to become someone who is invited into the exchange or is even pursued (as in the case of the BMW films) as an entity possessing cultural capital.

Exactly.

This is Trend 2 type customer-centricity–-recognizing that the consumer is actually in charge.  It means moving away from a “predator and prey” model of control and one-way monologue, to a genuinely interactive two-way model of dialogue.  In this model, the role of centralized control drops drastically, because the marketer and customer collaborate—even blend.

Hmmm.  D’ya think that model might work in the analogue world too?

Case 2. Pharma Voice Magazine, The Forum for the Industry Executive: The Salesforce of the Future  quoting Bill Pollock, CEO of Pharmagistics:  An excerpt:

In the future [of pharma], salesforces will be much more focused, and they will have the ability to look at each touch point, determine what’s the most effective way of communicating with a practitioner, and do so in a personalized way.

As a result, marketers will have to integrate their sales and marketing efforts into everything they do, treating each and every touch point as part of their total sales and marketing mix. This includes their e-portals, inside telesales efforts, Internet-based virtual sales reps, literature, and direct-mail programs—all of these tactics will be considered a part of the entire salesforce effort and must be integrated via the entire marketing program.

Such a trend would mean that pharma companies will need the ability to track everything that is done and monitor the impact of their efforts on their prescribing customers.

This is Trend 1 type customer-centricity.  It retains the predator-prey model and focuses on making sure all the guns are pointed in the right direction—at the customer.  The problem is perceived as one of alignment and control.  The new world isn’t qualitatively different, this model says, just quantitatively more complex.  It retains the focus on centralized control because it’s still an us-vs.-them view of the world.   It is restricted to the first two levels in the HBS piece—there is no conception of becoming "someone who is invited into the exchange or is even pursued…" much less of becoming "an entity possessing cultural capital."   This kind of  "customer-centricity" is not collaborative.  It is customer-centric  in the way a vulture is customer-centric—laser-focused on its prey.

The confusion around the term “customer-centric” isn’t just a matter of definition or market power.  Marketing is only one  battlefield in a much larger contest between a network-driven commerce-based view of the world and a command-and-control-driven competition-based view of the world.

Life imitates art.  Sometimes we learn more about the analogue world by observing pale avatars in the digital realm.
 

The July Carnival of Trust

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Carnival of Trust logo

Welcome to the July edition of the Carnival of Trust.

I specifically invite you to read it as a whole, not as simply ten selected parts. There are themes that weave between the ten postings.

That’s what we promised you: an intelligent winnowing down to ten of some excellent writings on trust—in business, in sales, in government, in personal life.

But I hope this goes beyond. There are several story lines connecting the postings. I have tried to point out a few. Please have fun finding others, and add your own commentary here.

Thanks to all the contributors, including a number of excellent submissions that didn’t make it to Top Ten this time. Please don’t be disheartened; if you’re on point, keep submitting. Next month, the Editor at the Blawg Review has kindly consented to host the Carnival of Trust; guest hosting will be the rule going forward. Please stay tuned for details.

Trust In Sales and Marketing Logo

Is Big Pharma Shifty?

John Mack is a respected newsletter writer and blogger in the pharmaceutical sector, a major part of global industry and a critical one these days. Mack analyzes a Harris Interactive poll that shows "consumers think Big Pharma is shifty as well as greedy." No, no, not shifty too? Mack interprets for us.

A Little Knowledge is Great Marketing

Is it possible for a mega-corporation to act transparently and in the best interests of the consumer, in the belief that doing so will generate wiser customers first, and, later, higher profits for the company?

Ron Shevlin, at MarketingROI, would like to think so, and suggests that Bank of America’s recent educate-the-consumer initiative is such an effort—at least on face value.  Not unlike what Brad Burnham’s point of view B argues in Who Do You Trust to Edit Your News, below.

I share Ron’s hopes, though I’m sceptical that a major company like BofA can achieve escape velocity from the mass of company-centric, short-term metrics that have hijacked terms like "customer focus" in recent years.


Web Commerce, Trust and Akerlof’s Law

What do used car advertisements and dating services have in common? Allan Patrick educates us about Akerlof’s law about the asymmetry of information. Basically, absent independent brands of rating systems, "liars drive out buyers." What can a small quality website without brandname or a massive rating system do? Patrick has a few ideas. Interestingly, one of them—give the customer more information—would appear to be exactly what Ron Shevlin is talking about in A Little Knowledge is Great Marketing—see above.

How is Marketing About Relationships

Economics 101 tells us markets are about products and prices; in Econ 201, you hear about advertising and bargaining and bluffing, and in industrial economics, you learn about power dynamics in industry sectors.

But in Life 101, you learn how haggling over rugs creates relationships and societies, as well as efficiencies and long-term customers.

Dawud Miracle draws from a story in the Cluetrain Manifesto to explain how. Think about how it applies to the pharma-consumer relationship in John Mack’s post, Is Big Pharma Shifty?

Trust in Leadership and Management Logo

Agreement and Trust

Scott McLeod applies a great two-by-two matrix concept from Peter Block. The model is for analyzing leaders’ relationships with their essential people. For each relationship, how much do you trust them, and how much do you agree with them? Not all 2×2 grids result in useful diagnostics; this one does.

Credibility as a Core Company Initiative

Ardath Albee talks about relationship marketing minus thought leadership in her blog Marketing Interactions.

"I was speaking with a VP of marketing who said thought leadership was low on her priority list because it didn’t have an immediate impact on revenues…

The problem with only focusing on the near term is that when it runs out, what have you got left? To build credibility, every B2B company that’s in the game for the long-term should focus on thought leadership as one of their initiatives. Relationship marketing is a focus of many marketing initiatives these days, but without credibility, how strong a relationship can you build?"

Quite right, Ardath; high relationship can’t excuse zero content.

Blogging and Transparency Build Trust

Michele Martin works at the intersection of new media and the non-profit and government sectors. Trust works there too. Michele highlights an adept use of blogging by Six Apart CEO Barak Berkowitz to create trust—legitimately. You can tag this under transparency and candor as well as blogging and trust. (See also Alex Todd’s post, one selection down from this one).

Trust in Strategy, Economics and Politics Logo

Creating Trust in Government

Alex Todd is a thoughtful writer and consultant on trust, particularly on his concept of trust enablement.
A good example of Alex’s thinking is this post, about a current proposal in the Canadian legislature called the "Federal Accountability Act." Says Todd:

you cannot defend against a loss of trust unless trust already exists. Creating sustained trust – in government, commerce or our private lives – requires a balance of two approaches: both building trust and creating mechanisms to ensure that trust will not be abused.

A fine example of solid thinking applied intelligently to real and current issues.  Listen up, Ottawa. And Washington.  Trust isn’t just about prohibiting conflicts of interest; it’s also about engineering trusted relationships. (See also Dawud Miracle’s entry about markets and relationships, above).

Who do you Trust to Edit Your News?

Brad Burnham reports on his personal power-take-away from the Personal Democracy Forum in New York.

Point of View A: The lack of editorial control on the web leads to a dumbing down of media and culture, wherein YouTube makes television look positively BBC-like and facts are wildly out of control.

Point of View B: The web instantly corrects mis-statements of fact.

Brads post says more about this. He feels POV B wins on the media point.  I feel persuaded on that point, but the case for dumb and dumber at the cultural level still stands, IMHO.

Trust in Advising and Influencing Logo

How to Keep Your Word, Tupelo Kenyon

How should you keep your word?  Impeccably.

So argues Tupelo Kenyon, concluding "your word is your bond, your character, your reputation, and your integrity.  Your word is your opporutnity to practice being impeccable."

He argues it tightly.  And at length.  And in terms ranging from logic to history to poetry. You might say, impeccably.

Not an obvious choice for this carnival, but I hope you’ll agree a good one.

How Marketing Can Destroy Sales Trust

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I like to believe there can be professionalism in sales.

So I was struck the other day when I ran across an article that talked about “selling on message.” (Pharma Voice, May 2007).

It has always seemed a curious phrase to me—sort of the opposite of customer focus.

Who talks that way? The three Ps, it turns out—that’s who.

The first P is politicians. Robert S. McNamara, Secretary of Defense during the Vietnam War, gave this advice for dealing with the press: “Never answer the question they ask; only answer the question you want to talk about.”

McNamara’s view has since been echoed by Clinton (“it’s the economy, stupid”) and by Bush ("it’s 9/11, stupid!"). Good politics? I’ll defer to others. But it sure isn’t trust-enhancing—look at pols’ polls.

The second P is public relations and marketing. Google “selling” with “on message” and you get “A major concern for marketing and sales executives is that they are always ‘on-message’ with all of the communications that reach their prospects and customers—helping to create, establish and build a customer relationship that will ‘competition-proof’ their customers.”

This seller-centric view of sales comes from a self-described “provider of sales-oriented public relations and marketing services—” which, ironically, lists a “customer-centric selling program” as a key client.

Another source from the same search says, “Less than 27% of CMOs report confidence in having adequately prepared sales to be on-message,” and "How do we enable salespeople to be “on-message” and empower marketers to do what they do best? "

(Those darn salespeople, always wandering off to what customers want to talk about, when they should be doing marketing’s bidding.)

This helps explain the third P, which is the pharmaceutical industry. The article quoted at top, “Sales Training: Moving Beyond the Message,” says “it’s become vitally important for sales representatives to provide value beyond the marketing message.” It quotes Peter Sandford, “in the regulated healthcare environment in which we work, selling on message is vital, but it is the additional knowledge that the representative has that can also be useful to the physician. This allows them to essentially sell beyond the message, but still within the guidelines.”

A May, 2006 article in the same publication called “Rebuilding the Trust—Sales Managers Lead the Charge,” says, “… representatives need to differentiate themselves by delivering more distinct messages, tuned to the needs of the healthcare providers they’re dealing with. They also need to better understand what creates value and align the messages with that goal.”

All this is the language of a sales culture and community that has been mugged and drugged by marketing. Only in such a business can it actually sound radical to suggest that salespeople give customer-specific attention, as opposed to staying “on message,” or “within guidelines.” You don’t hear this kind of talk at IBM, or Nordstrom’s, or Starbucks, or Goldman Sachs.

Marketing is, by its nature, a monologue—it tells things people want to hear to the people who want to hear them.

Sales is, by its nature, an infinitely customized dialogue.

Nothing wrong with either one. Each has its place. But they are different.

When sales is overly-subordinated to marketing, you emd up with “selling on message.” Kind of like the stereotype of telemarketing, or scripted sales businesses like ballroom dancing, or pump-and-dump brokerage houses. It can create puppets reading canned speeches, or at least feel that way, because—the "message" is, above all, about the seller.

The folks at PharmaVoice are right; they are doing their bit to drag pharma sales (forward) into the late 20th century. It must be the most sophisticated business in which marketing chokes off oxygen to sales.

I suppose this is because in recent years pharma—for a variety of structural reasons—has come to be dominated by the marketing function. It has tended, then, to frame other issues—customers, trust, selling—in terms familiar to marketing and PR.

More’s the pity. Marketers do not help the trustworthiness of sales reps by urging “selling on message,” and trust isn’t something the pharmaceutical industry is long on right now.

Now, about McNamara…

How the Pharmaceutical Industry Can Increase Trust

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“You can’t talk your way out of what you behaved your way into,” says Stephen Covey.

But not everyone believes Covey.

NY Times, May 22, 2007.

“Columbia University dismissed its financial aid director yesterday after the release of documents showing he promoted a student loan company in which he had a stake, sending letters to parents and alumni on three occasions praising the lender.”

NY Times, March 21, 2007.

…the year [Dr. Allan Collins]was chosen as president-elect of the National Kidney Foundation, the pharmaceutical company Amgen, which makes the most expensive drugs used in the treatment of kidney disease, underwrote more than $1.9 million worth of research and education programs led by Dr. Collins…In 2005, Amgen paid Dr. Collins at least $25,800, mostly in consulting and speaking fees…

…Dr. Donald Hunninghake served on a government-sponsored advisory panel that wrote guidelines for when people should get cholesterol-lowering pills… eight of [the panel’s] nine members had financial ties to drug makers.

A 2002 survey found that more than 80 percent of the doctors on panels that write clinical practice guidelines had financial ties to drug makers.

Doctors said that lectures were highly educational, and that drug makers hired them for their medical expertise and speaking skills. But former drug company sales representatives said they hired doctors as speakers mostly in hope of influencing that doctor’s prescribing habits.

I don’t wish to engage in pharma-bashing. But Covey’s point needs heeding.

Columbia’s response to conflict was to say that the director, a 1985 graduate of the university, had “abused a position of trust and violated the university policy on conflicts of interest.”

So they fired him.

Covey, presumably, would approve.

Not so in pharma. In recent decades, the business of making and selling drugs has become much less about making and much more about selling. Perhaps that’s why the industry tends to see its trust problem as a marketing or PR issue—’if only the public knew the full truth, they’d trust us.’

Typical is this headline, from an April post by Ipsos research, :

Pharmaceutical Companies Need To Raise Awareness Of Their Social Investments To Improve Industry’s Image

Or this, promoting an interactive web seminar:

How can you safely navigate this politically-charged environment—and keep your business and brands strong? What can you do to restore public trust—even while facing negative campaign rhetoric? Find out at a New WebSeminar—Surviving the Election Wars: Strategies to Build Trust and Defend Brands.

Just to be clear who they view as being in charge of trust and brands:

If you are involved in advertising, marketing, market research, corporate communications, product and brand management, senior management, public affairs, or public relations…This is a program you can’t afford to miss!

PhRMA, the industry association, is a big proponent of the trust-is-a-communications-issue viewpoint. In an article appropriately titled "New PhRMA Leaders Discuss Future of the Industry, Need for More Public Education, " PhRMA’s CEO, ex-congressman Billy Tauzin, says, "“For PhRMA to continue to advocate well for our members, we must begin to correct the misconceptions and the outright fraudulent views that have been created about our work and our products.”

So, how’s it working? Here’s one survey:

43% of US adults believe that pharmaceutical companies fund groups like the American Heart Association and the National Kidney Foundation in order to get more people to buy their products or medicines, whereas only 21% believe it is to demonstrate that the companies care about a health issue supported by the group.

Truth: the pharmaceutical industry is loaded with good, smart, dedicated, well-meaning people. It has saved millions of lives, and improved millions more. It has the potential to do unimagineable good. We need a trusted pharmaceutical industry. But it’s the industry that must do the heavy lifting, not the consumer. The only real way to be trusted is—to be trustworthy.

A friend who does PR for pharma tells me it is difficult to give away drug coverage to lower income people—for free—because people are suspicious.

Covey’s right. You can’t talk your way out of a problem you behaved your way into—ask Imus. You can’t market your way out of structural conflicts of interest—ask Arthur Andersen. You don’t become trustworthy—worthy of trust—via marketing or advertising or PR agencies. That’s throwing water on a grease fire.

Pharma needs a fundamental recontracting with two critical constituencies—patients and physicians. It’s a business thirsting for trust—but trust based on values and behaviors. Not on spin, ads, press releases, awareness improvement and “education.”

We should all be rooting for pharma to make that shift.