The Business Ethics Blog

I’m still blogging “on the road,” reporting from sunny Southern California. I’m in Claremont, primarily for a symposium on “Biotechnology and Human Rights: Industry’s Responsibility?” at the Keck Graduate Institute. (Here’s the symposium website.)

Interestingly, even though the Symposium was (at least judging by its title) about biotechnology, a lot of the day’s discussion ended up centering on the pharmaceutical industry. There’s an increasing convergence, of course, between the pharma industry and health-related biotech. But there was almost no mention at all of the other two branches of biotech, namely agricultural biotech and industrial biotech. (There was a fair bit of talk about Intellectual Property rights, which in principle span all 3 branches, but most of the examples cited — in fact, I think all of them — had to do with drug patents.) The focus on pharma (and bio-pharma) probably has a lot to do with the awful, awful reputation the pharma industry currently has in North America.

Look, for example, at this press release from Ipsos about Pharma’s public image.

The pharmaceutical sector is suffering from a poor reputation among Americans, according to new research by marketing research firm Ipsos. … [N]nearly as many Americans hold an “unfavorable” opinion of the pharmaceutical sector (32%) as have a “favorable” opinion (35%), while 33% are neither favorable nor unfavorable. Among other sectors measured, only the oil and gas, chemicals, and tobacco industries fare worse than the pharmaceutical sector.

What’s the solution? The folks at Ipsos have exactly the wrong idea:

Pharmaceutical companies receive little recognition from the public for their social contributions and investments. … If pharmaceutical companies could raise awareness of their philanthropic actions, they would undoubtedly make gains in countering negative feelings toward the sector.

Well, to be fair, the industry does engage in some significant philanthropy (for example they give away millions of dollars worth of drugs every year — a drop in the bucket, given the world’s needs, but still big big dollars by anyone’s accounting). But doing better at advertising that fact is highly unlikely to make everything all better. In point of fact, the Pharma industry gets slammed for two main problems, neither of which is going to be easiy papered over by philanthropy:
1) Drug development is relatively expensive, the market for drugs is mostly unregulated (from a pricing point of view) and the ‘market price’ for many crucial drugs is quite high. The result is that not everyone (even in affluent America) has good access. To make things worse, certain governments do little to help their poorest citizens gain access. This is largely beyond Pharma’s control & responsibility.
2) The industry keeps getting caught doing sleezy things. Or at least, some of the big players (and probably others) are getting caught doing things like defrauding governments, jeopardizing patient safety, and interfering in the peer review process for scientific publications. Unlike the previous problem, this is entirely within Pharma’s control & responsibility.

There is a very good argument in favour of the public not expecting philanthropy at all, but for the public (and their elected representatives) being much more demanding of Pharma in terms of basic business integrity.

(By the way, the Symposium was fantastic. Gary Cohen and his team at KGI deserve a huge round of applause for putting together a programme that was both stimulating and well-run.)