The ABPI’s new leader: communicating pharma’s value
pharmafile | November 14, 2011 | Feature | Business Services, Manufacturing and Production, Medical Communications, Research and Development, Sales and Marketing | ABPI, Stephen Whitehead
When Richard Barker, the ABPI’s director general decided to step down in May this year after six and a half years in the job, the industry organisation decided it was time for a new approach.
The director general title has made way for the more modern-sounding chief executive, and the organisation has decided to move away from ‘industry insider’ types with a background in science to someone expert in the business of communication.
That someone is Stephen Whitehead, who at 48 is also undoubtedly younger than any of his predecessors in the role.
“They could have hired somebody who was a scientist or who was one of the ‘old boys,’” Whitehead says, “But I think their intent is shown by who they have hired.”
Whitehead has experience in pharma, where he began working in UK communications for GSK in the nineties, and later taking a European comms role at Lilly. But he left the sector in 2003 for more senior comms roles in financial services, banking and the alcohol sector.
It is this broad experience of the cut and thrust of advocacy roles across sectors that Whitehead is now bringing back to pharma.
The modernised profile of its leader reflects wider changes in the ABPI, which its members have encouraged at a time when the sector – and its customer the NHS – is also undergoing major change.
Industry advocacy
Whitehead says that when he was approached about the ABPI job he was very excited, because pharma is an industry he feels genuinely passionate about.
“It’s one of the industries where you know when you wake up in the morning that there’s going to be something interesting that day. And when you go to bed at night you feel you’ve done some good, because as an industry we do treat and cure, and make people’s lives better.”
Whitehead has extensive international experience but admits this new role is a step up in terms of responsibility.
“I think it’s a significant challenge and a big role for me because it’s a chief executive role and previously I had always headed departments. It’s also a very politically complex role, because of the stakeholder actions and the role of the industry and the reputation of the industry. That makes it a challenging role.”
Whitehead spent the early part of his career at GlaxoWellcome and then Eli Lilly but his moves on to communications roles in the alcohol sector – working for two of the giants of the sector, Diageo and Allied Domecq and later into banking and financial services at Barclays and Prudential – have provided him with valuable experience of other high profile industries which frequently deal with controversial issues.
One notable example of this was in the alcohol sector, which has been under pressure for some years to help tackle alcohol abuse, and had to fend off calls for tighter regulation.
Amid mounting public concern about binge drinking, in 2005 the UK’s advertising regulator Ofcom tightening the rules on advertising alcohol, effectively outlawing adverts which glamorised drinking for younger people.
Whitehead was part of the industry effort which ensured that the new rules were not punishing the industry and blaming it exclusively for a much wider and more complicated social problem.
The parallels with the pharma industry is very clear, and Whitehead will need to bring all his experience to bear on the challenges facing UK pharma. Most notably among these is working with the NHS amid cutbacks and massive system reform, and the planned introduction of the controversial ‘Value-Based Pricing’ system in 2014.
Modernisation and streamlining at the ABPI
The appointment of a communications professional to the top ABPI job reflects the central importance of engaging lots of disparate groups. “I think the act of hiring me – a man who has spent his life in communications – indicates exactly the seriousness of the industry to engage properly with all our stakeholders to address all the issues we are confronting,” says Whitehead.
There is no doubt that pharma needs a unified voice in such difficult times, but is the ABPI up to the job?
“If your question is: ‘Is the trade association tired?’ – then I would say absolutely not: in fact it’s re-energised and reinvigorated. To see this you need only look at the new branding, the new hires, and the new offices.”
The ABPI has to demonstrate that it is using its funding from members wisely, especially in times when pharma is making major cuts to staff numbers and budgets to cut costs.
The details of what each firm pays for ABPI membership remains private, but the fee is based on global market share, with the bigger pharma firms believed to be paying a six-figure annual fee.
Whitehead admits that the ABPI has also trimmed its own overheads. The most obvious sign of this is its departure from the warren-like building overlooking Trafalgar Square, its home for decades, to a more modest office a mile away in London’s Victoria Street.
The ABPI shares the premises with the BioIndustry Association, a further sign of rationalisation.
Whitehead said: “In these tighter times, we have to reflect our industry and we also have to reflect our customer base, which is the NHS, and are we trying to do more on less.”
The QIPP challenge and ‘trench warfare’
Whitehead joined the ABPI in June, and spent his first three months reacquainting himself with the industry.
He says: “I took the Hippocratic oath and I said in my first few months: ‘I do no harm’. So I spent that time listening and talking to people to understand their perspectives on the industry and the ABPI.
“I talked to the NHS and asked them what their views of the industry were – with government, with the other interested parties – including [US lobby group] PhRMA, and [the European pharma group] EFPIA – where we discussed issues of commonality.”
He has already had a number of meetings with the NHS and the Department of Health, and says he has a lot of time for Jim Easton, the man charged with finding the NHS £20 billion worth of savings over the next four years, through the QIPP agenda (Quality, Innovation, Productivity and Prevention).
Easton is an inspiring but disarmingly honest speaker, and told an ABPI conference in May that his QIPP agenda meant that pharma and the NHS were engaged in a ‘trench warfare’ – the health service looking to make savings whilst the industry was looking to grow its profits.
Easton’s words were clearly intended to demonstrate the scale of the task facing pharma, but also made clear his respect for the industry’s own position.
Whitehead clearly appreciates this approach, and calls Easton a ‘very good guy’. Whitehead says the NHS is fortunate in that the global pharma industry is currently undergoing the greatest ever wave of patent expiries, bringing huge savings to health systems like the NHS.
“We have estimated that the NHS can save around £3.6 billion from the drugs going off patent between 2009 and 2015,” he says.
“If you take that and look at the drugs budget in isolation, then you lose around £3 billion from a drugs bill worth around £12 billion – that’s an automatic 25% saving.
“I have had these conversations with Jim Easton, we have modelled it, the DH have modelled it, and we have both arrived at pretty similar conclusions as to what this saves the system.”
Whitehead added that the UK has one of the most efficient generics market so as soon as a drug’s patent has gone, generic uptake is swift, meaning the NHS doesn’t have to wait long for savings.
Whitehead is also in frequent contact with Sir David Nicholson, the NHS supremo now switching to the newly created role of chief executive of the NHS Commissioning Board. Nicholson is also currently compiling a new report on innovation in the health service, intended to help innovative thinking become embedded in the NHS.
Reputation lag
One of Whitehead’s biggest concerns is the industry’s reputation in the eyes of the public and the NHS, and he says pharma currently suffers from a ‘reputation lag’.
He says this stems from the public’s lack of understanding of the value pharma brings to healthcare, and from pharma’s ‘historic modes of behaviour’. Whitehead recounts how a friend who happens to be a well-known broadcaster reacted to his new appointment.
“I had dinner with him and he asked if I was now the ‘chief apologist for the drug industry’. And my honest reply was that I’m not sure what I, or my members, have to apologise for.”
He says UK pharma has to make sure stakeholders fully appreciate what the industry contributes to society, as a provider of new medicines and as a major employer and contributor to the UK economy.
The impact of negative NICE decisions
The role of NICE, and its negative decisions – notably on new cancer medicines – is a major concern for Whitehead, who worries it could deter pharma from using the UK as an early launch market.
“One of my key jobs is to ensure the UK remains a early launch market – this is for many reasons, including that we benefit from Phase III clinical trials, we benefit in clinician leadership, we get patient benefits, the NHS benefits, and you get a vibrant R&D community.
“But I have a major concern that the UK is slipping down the league – clearly, you have some companies that will want to use the UK early, because they have a lot of investment here.
“But increasingly you have some companies that are saying: ‘actually, if we get a negative NICE decision, that contaminates our launch procedures globally’, and so they start to question their incentives for coming to the UK first.”
He said he was not attacking NICE, but adds that: “There have been some recent negative NICE decisions that I think are quite worrying.”
Whitehead still believes the future is bright for the industry.
“Overall I’m optimistic about the industry and we’ve got some great drugs coming down the line or just being launched, including new hepatitis C drugs, replacement treatments for warfarin and great advances in cancer, looking especially at the new melanoma drugs.
“So I have to say that despite the current environment, we have got a lot of things to be positive about.”
‘What’s wrong with the PPRS?’
From the start, Whitehead has made it clear that the government’s plans to introduce value-based pricing (VBP) approach is a big concern for him.
The current PPRS pricing system has been in place for over 50 years, and allows pharma to set its own prices and negotiate the terms of the system every five years.
VBP is set to come into place by 2014 and will take away this freedom the industry enjoys under PPRS, and will also create new definitions of value for new drugs.
Whitehead says: “Coming in new from the outside, I’ve looked at what we currently have – the PPRS – and asked ‘what’s wrong with it?’ We already have NICE which looks at outcomes, so it would be wrong in our current environment to say that we are not value-assessed, and that medicines are not priced according to value, because they are.
“What [health secretary] Andrew Lansley said he was trying to do was to develop a scheme to encourage uptake and access – I think our major concern when looking at this is that at the moment, I’m not sure what he has proposed will encourage access and uptake.” For Whitehead, the solution is much more simple – reform NICE to allow it a greater remit to assess value, without changing the whole system; this way PPRS could stay, which is clearly the favoured choice for the ABPI.
“To me, if you want to do this, then surely you can do it through NICE by making sure it considers the broader societal implications, and not just medicine in isolation.” He says NICE should be allowed to look at the pathway of care and be able to ask more pertinent questions: “Does this medicine stop someone going to a home for instance for six months; does it prevent hospitalisation; does it enable them to go to work; does it save money in the long run; and what are the patients’ benefits and what are their experiences?”
He says that these are all questions that will be asked by VBP but could also easily be asked by NICE, meaning the system can be tweaked without the need for major upheaval.
If Whitehead can not only communicate these ideas, but can also sway the government on this key issue, then he will have vindicated the decision.
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