Don’t lose your head
pharmafile | October 21, 2003 | Feature | Research and Development |Â Â industry reputationÂ
'Stop making a drama out of a crisis' goes the old saying, but that's easier said than done when youre a pharma company operating in this age of 24-hour media. Adverse events and the bad news that spin off from them seem to spread faster than an Australian bush fire, and before you have time to catch your breath and utter the healthcare industry equivalent of 'Houston, we have a problem', your corporate and public image could be irreparably tarnished. One has only to look at what the withdrawal of Lipobay/Baycol and the consequent fall-out have done to Bayers reputation to realise the importance of implementing effective crisis management techniques before the outbreak of potentially harmful problems.
Preparing for a storm
But how does a company know when it's got an actual crisis on its hands? Companies have to deal with adverse publicity on an almost daily basis, which requires a longer-term managed approach, according to Maxine Taylor, Director of Corporate Affairs at Eli Lilly UK.
"If youv'e got your processes in place then most of the time you're dealing with issues but something becomes a crisis when it is 'totally unexpected' and hits you when youre not prepared for it," she says.
Crises come in several different shapes and sizes, so no amount of forward planning is going to prepare companies 100% when one crops up. There's always going to be a certain amount of 'backs to the wall' fire-fighting in a crisis but if firms want to adopt best practice, the infrastructure needs to be in place and ready to be put into motion at the drop of a hat.
"The important thing is that companies make sure they define what their key messages are going to be when bad news arrives," says Kevin Mageean, COO at healthcare communications agency Avenue HKM. "They have to acknowledge the issue but also put it into context. If, for example, it relates to a side-effect or some adverse event, they need to balance the issue by putting it into the context of how many patients have suffered no ill effects at all."
In order to deliver these key messages, an element of what Kevin terms "proactive preparedness" is called for. Maxine Taylor is of the opinion that pharma companies should undertake a risk assessment going through the entire business, highlighting the strengths and weaknesses and create an issue management team which meets regularly, reviewing and discussing the state of issues. The team leader will invariably be the chief executive and the group should be au fait with all the different functions that might be involved, such as manufacturing, sales and security. A spokesperson with the necessary PR skills and ability to stand up in front of the media needs to be chosen, allowing the team leader to get on and manage the issue.
"Most of all, you need to develop plans and working procedures (such as a crisis manual) so you can actually implement the plans that you have in place through internal simulation exercises," says Maxine. This could involve a crisis scenario where the team pretends everything's for real and tests the strength of the plans frankly this process is never over."
Bitten by the bug
"I think the year 2000 changed the way pharmaceutical companies thought about trying to identify risk in advance," says independent consultant Sue O'Donnell, who was once Head of Sales and Marketing Operations at Glaxo Wellcome in the 1990s. "But even before 2000, people were coming in from other industries and advising pharma executives that they needed to install crisis management systems."
She makes the point that while a crisis management system incorporating risk assessment is a good idea, it is often taken in at board level and fails to percolate down to the rest of the company. She cites the example of one UK company whose board were asked to identify the 10 biggest risks they thought they had. They listed product withdrawal, single sources of production and clinical trials, patent protection and environmental disasters as some of the main threats. When other staff in the company were asked to compile the same list, only two of their items matched those of the board (product withdrawal and manufacturing concerns).
"The medical and marketing staff's main issues centred on the day-to-day running of the organisation," she says. "The question is, who was right – the board or the staff? Crisis management teams have to be careful that they're not dictating what the disasters will be – if they're not dealing with the right issues then thats a big flaw."
Kevin Mageean believes that companies need to address issue management with a more global approach due to the fact that the issue itself can be communicated very quickly at a global level.
"There should be some corporate, global key responses to potential issues that might arise, which can then be distributed to the operations and implemented locally, forming the basis of each units media response," he argues. "Clearly, each operation has to put it into their own context and adapt it for their specific markets and own environment."
Bayer's recent struggle has reiterated the point that a crisis can happen to anyone at any time, and usually when it is least expected. The drug industry being what it is, companies can never be certain that theyre not going to fall victim to a dreaded product withdrawal or a manufacturing closedown. Sue O'Donnell points out that while product withdrawals are "everyone's worst nightmare", companies should be aware that they are not the be-all-and-end-all of disasters. Some problems can arise from pre-arranged strategies, such as in the case of Glaxo Wellcome in the mid-1990s when it introduced a new distribution system to pharmacists and wholesalers, the Glaxo Agency Scheme.
The idea was to directly reward retailers loyal to Glaxo products but when the scheme started it met a lot of resistance from pharmacists and wholesalers. While Sue states that it was not a 'crisis' she says the situation caused a lot of adverse publicity, which had to be accommodated while the company was trying to build a market position.
"It was a good example of an underestimation of the strength of feeling in the marketplace, which in retrospect could have been handled better," she says.
Companies not only need to be fully prepared when an issue swells into a crisis, but also react with lightning speed. After all, the media have rarely been slow on the uptake and pharma companies have to mirror their reflex-like reactions if they are to come out of the adverse event with any credit.
"Particularly in a multinational company, it is vital that there exist clear lines of communication between local affiliates and the global part of the business," says Maxine Taylor. "Local affiliates have to be in the position to deal with it in their own area but it is critical that all global colleagues are briefed about something as it breaks – the spill-over impact in other countries these days is so fast now with 24-hour media and the Internet that companies have to act very quickly with their international communications."
The human touch
Of course, it's not all about speed. The pharmaceutical industry has been saddled with emotive issues, and with the growth of an increasingly health-conscious public, companies have had to start showing an ability to deal not only with corporate and clinical matters, but also human ones.
"I don't think many pharmaceutical companies are very good at handling the general public – they're not really set up well for that," says Sue O'Donnell. "Companies are increasingly initiating customer service departments but they're relatively new. Most of the processes that were put in place were aimed at dealing with GPs and the medical professions. Now the public has a much greater awareness about their medication, but many companies arent set up to deal with large numbers of people."
She continues that companies have to question whether, despite their customer services resources, they have the capacity to confront crises head-on with decent PR.
When a company is faced with an adverse event, it has to balance the corporate communications push with the legal considerations. Multinationals such as GlaxoSmithKline have their own in-house legal departments, and the tendency can sometimes be to err on the side of caution and remain tight-lipped. However, as Maxine Taylor points out, expressing regret about a tragedy is not an admission of guilt.
"There is a huge distinction between showing the human face of the company rather than the corporate side and actually acknowledging that it's your fault and you're responsible," she explains.
Kevin Mageean is of the opinion that during a crisis, top level executives should listen to the lawyers but not be afraid to make key decisions.
"In terms of managing the situation, someone with enough authority has to acknowledge the legal implications but also make the decisions that they think are right for the public, the company and ultimately the shareholders," he says. "Otherwise companies can end up in a kind of stagnation where they feel afraid to say anything."
Sue O'Donnell believes that pharma companies are improving in balancing the legal considerations with the obligation to be more open with the public: "The days of saying 'no comment' have gone and corporate communications is much more sophisticated now within the healthcare industry," she says. "Of course, lawyers will brief in the event of an adverse reaction, but if people are dying, the pharma industry cant afford to be seen as faceless and not caring."
The Lipobay issue has made the entire industry alert to the danger of an unrelenting domino effect occurring, which can quickly spiral out of control and endanger a company's reputation in all spheres. "It's an example of an issue becoming bigger than the actual product and I don't think Bayer has been able to maintain a very good image over it," says Kevin.
However, there have been examples within the industry of companies confronting a crisis and coming out with strong credibility. Maxine says the classic case is US company Johnson & Johnson with its OTC pain reliever Tylenol in 1982. Some packs of the drug were discovered to have been contaminated with cyanide and seven people were killed.
"Johnson & Johnson did an incredibly good job in terms of crisis management," she says. "It withdrew the product immediately even though it had reason to believe the incident was confined to one specific area. It took the line that its primary responsibility was towards the people using the product and in following through that credo, they would also meet their obligations towards their shareholders."
Kevin said the public quickly accepted that Johnson & Johnson had done everything within its power to avert any further risk to patients: "Their actions were copied by many other companies and I think they came out of it with their reputation intact and even enhanced."
Outside help
Despite companies putting in place crisis management procedures, all are agreed that there is always room for external agencies to get involved. "They often ask the 'stupid' questions which turn out to be the smart ones," says Sue. "If you put a group of scientists in a room, who would dare to say, 'What happens if the drug doesn't work?'"
Maxine says that some companies keep PR firms on a retainer just in case a crisis pops up out of the blue: "It can be helpful to have a cool, objective head that has seen issues and crises across a whole range of companies, giving advice."
External agencies can bring an objectivity and a distance to the issue which in-house staff may not be able to provide, according to Kevin: "They're not involved in the politics and can perceive the way the issue is being communicated and how it's being received by the ordinary punter on the street. Also, people within the company may be dealing with an issue for the very first time whereas agencies, by the very nature of what theyre doing, have an experience of these situations that can bring added value."
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