When I used to teach public relations classes on things like Reputation Management or Crisis Communications, I taught the old PR maxim about “depositing in the bank of goodwill” out there.  Simply put, the better you or your organization are at honourable citizenship on a day-to-day basis, the more public goodwill you’ll build up in this account, and the more others will be wiling to trust you.

And vice versa: the more slimy your ongoing behaviour, the less you can realistically expect anybody to trust you. Yes, even when you are telling the truth.

The good news is that, when your balance in the bank of goodwill is healthy, your chances of that trust remaining stable even if you do something bad are improved.  So if you should need to make a “withdrawal” one day when a crisis hits, you’ll have the social capital of public trust nicely tucked away in that bank.

It’s also why Phillip Ball – the London-based science journalist, former editor of Nature, and the author of Curiosity: How Science Became Interested in Everything – is taking aim at Big Pharma, and particularly at British drug giant GlaxoSmithKline (GSK).

In fact, although Ball readily acknowledges that the pharmaceutical industry has benefited the world – making life more tolerable and advancing scientific understanding – he now accuses GSK of being “busy squandering the social capital of public trust.”

Let’s revisit the reasons that Philip Ball is so angry at GSK.  Regular readers here may recall that last year, the U.S. Department of Justice announced that GSK agreed to pay $3 billion in criminal and civil fines. Yes, that’s billions with a ‘b’.  The judgement was against GSK for:

• bribing physicians to help market their drugs

• failing to report drug safety data

• inappropriately marketing its antidepressant drug Paxil (approved only for adults) to people under 18 despite knowing from its own unreleased studies that Paxil was associated with increased risk of suicide in younger patients; Paxil was also known to be addictive, as well as the cause of birth defects in babies whose mothers used the drug during pregnancy

• inappropriately marketing another antidepressant Wellbutrin by paying doctors, including TV celebrity “Dr. Drew” Pinsky, to promote Wellbutrin to their peers as the “happy, horny, skinny drug,” claiming that the drug (approved only to treat depression) was also good for obesity and sexual dysfunction

• withholding information on the cardiovascular risks of Avandia, a diabetes drug that has been linked to a 43 percent increased risk of heart attack – and the FDA has linked over 83,000 heart attacks from 1999 to 2007 directly to the use of Avandia (1)

• promoting Advair, an inhaled lung drug, to patients with mild asthma even though it was neither approved nor appropriate for them

GSK was also manipulating data from its clinical trials to try to minimize the adverse side effects that might be blamed on its pills – or “cooking the books”, as a former British naval lawyer indelicately described the company’s fraudulent attempts.

A report by the corporate reputation measurement firm, GlobeScan, called The Pharmaceutical Industry: Issues & Reputation, confirmed that among stakeholders surveyed, many believe that the reputation of the pharmaceutical industry is poor (2):

“Past scandals and heavy fines for big companies found guilty of unethical practices have coloured public perceptions. In Great Britain and Canada in particular, they find a very negative environment.

“Pharmaceutical companies’ names are virtually unknown unless through scandal or plant closures. Personnel within the industry are very aware of this negative reputation and appear to feel helpless about it.”

That $3 billion fine for fraud was the largest ever imposed by the U.S. on a pharmaceutical company, and settled both civil and criminal charges.

That much money sounds huge, which it is, even for a company whose net income last year topped $7.7 billion. But Sean Tracey, the Houston attorney whose firm handled most of the GSK birth-defect lawsuits, dismissed the $3 billion penalty like this:

“GSK simply considers this the cost of doing business.”

Philip Ball, however, calls the fine “disgusting”. Here’s his take on the GSK scandal from an interview with The Guardian:

“If this were a junk food company lying about its noxious products, or a tobacco company pushing ciggies on schoolkids, we’d be outraged but hardly surprised. When a major pharmaceutical company is found to have been up to comparable misdemeanors – bad enough to warrant an astonishing $3 billion fine – it seems more of a betrayal of trust.”

And once the public feels betrayed, as any good PR professional will tell you, your company is forced into damage control.

AdWeek reported recently the results of a national Edelman survey found that only 56 percent of consumers last year said they trusted drug companies. With the exception of a single company (Johnson & Johnson), the reputation of the industry continued to plummet, and the public standing of two major drug companies – Pfizer and Merck – went from ‘neutral‘ to ‘poor’, according to research by Prophet consultants.

This is critically important if you happen to be a public relations consultant for Big Pharma, charged with being both the apologist and PR strategist during international scandals like GSK’s record-setting $3 billion fraud scandal.

If people don’t trust you in the first place, you’re in for a bumpy ride with even the first whiff of wrongdoing. Again, you can’t make withdrawals from your bank of goodwill if that account is empty.

Consider, by contrast, how Johnson & Johnson handled the shocking Tylenol murders case back in 1982. I’ve often used this as a classroom case study, a story described by one scholar as “without a doubt the most exemplary case ever known in the history of crisis communications”. 

Unlike the GSK scandals, the J&J incident was not at all due to corporate wrongdoing, but to a person or persons unknown who tampered with bottles of Tylenol Extra Strength pain pills sold in retail shops near Chicago.  Seven people died from taking cyanide-tainted doses of Johnson & Johnson’s trusted pain reliever. Throughout the dramatic police investigations, the company demonstrated how their existing popularity among consumers (that bank of goodwill) along with open communication, empathy for the victims and their families, swift pro-active strategies, and immediate product recalls to protect the public (costing the company millions of dollars) all served to help enhance their public reputation.

The end result of J&J’s reaction was that the public viewed Tylenol as being the unfortunate victim of a malicious drug-tampering crime.  After an initial drop in sales immediately following the product recalls, the Tylenol brand soon regained its entire market share. And even more importantly, Tylenol became the first product in the industry to feature new tamper-resistant drug packaging safety – and within just six months of the crisis.

You can well imagine how the general public today might react if this same crime involved a GSK drug now that the company has been vilified through its fraudulent activities, each one deliberately undertaken purely to increase sales revenues.

GSK’s drugs named in the $3 billion penalties were considered blockbusters for the company – well worth paying off criminal and civil fines for. Annual sales of the drug Avandia were still as high as $1.2 billion in 2009, and that was two years after alarming study results published in The New England Journal of Medicine had linked Avandia to significantly increased heart attack rates.

But it’s not just the drug company under the glare of criticism here.

Philip Ball not only attacks industry marketing practices, but he also has some withering words to describe physicians who are on the take from GSK and other drug companies, in what’s been called a trend toward “marketing-based medicine”. The drug industry spends up to 25% of overall annual operating budgets paying doctors (those they declare as “thought leaders“ or “key opinion leaders“) to speak to other doctors through corporate Speakers Bureau programs to help convince them to prescribe specific brand name drugs.

Ball believes, as he told The Guardian, that, despite widespread popular cynicism about doctors being in the pockets of the drug companies:

“There remains a sense that the people responsible for our healthcare are somehow more principled and less corruptible than expenses-fiddling politicians, predatory bankers, amoral media magnates and venal police.

“GSK hosted outings for doctors in exotic locations and showered them with perks, knowing that this would boost prescriptions of its drugs.

“It’s partly a failure of culture: the jollies and bribes came to seem normal, ethically unproblematic, even an entitlement, to both the donors and recipients.”

But as Kate Cronin, global managing director at Ogilvy CommonHealth PR, explained to AdWeek, the way the pharmaceutical industry has tried to market its drugs (both legally and fraudulently) may soon be over:

“The era of Big Pharma and the marketing of the magic of a pill is gone. Now, pharma brands are about everything that surrounds a pill, including services, disease awareness, education and prevention.”

In fact, nearly half of U.S. healthcare marketing executives in an Ogilvy CommonHealth survey this year agreed that the heyday of Big Pharma is history. The writing, it seems, is indeed on the wall.

Things may already have begun to shift into new territory as drug companies seek ways to deposit into that bank of goodwill.

To enhance or replace past marketing methods (but without those pesky multi-billion dollar fraud penalties), the drug industry’s PR advisors are steering their clients toward marketing tricks like online health and lifestyle content, cool mobile apps, direct-to-consumer (“Ask Your Doctor!”)  advertising, and educational outreach.

In a previous post, I described how industry has even managed, brilliantly and invisibly, to infiltrate online patient discussion groups to help shill their products.

Jeff Chester, executive director of the Washington, D.C.-based Center for Digital Democracy, explains:

“Pharmaceutical companies are using stealth marketing tactics by eavesdropping on patients’ discussions on social networks and tracking patients’ ‘digital footprints’ online to target them for advertising.”

In fact, the pharmaceutical marketing website Dose of Digital now lists more than 350 examples of online patient support forums and social media sites run by drug or medical device companies.

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See also:

• What really goes on in your friendly online patient group?
•  Has industry co-opted patient engagement?
• Sock puppetry, astroturfing, and the marketing ‘shill’ game
• Avandia: a very short history of a very bad drug
• If only Avandia were more like Toyota
• Paying illegal kickbacks to doctors: just the cost of doing business for Big Pharma?
• How Big Pharma spends $20 billion a year on marketing their drugs to you
• Bioethical journal: “How drug marketing corrupts every part of the scientific and medical network”
• Is your doctor a “thought leader”?
• Key Opinion Leaders in medicine are paid to have an opinion
• Why is Big Pharma getting away with paying billions in criminal fines – but avoiding criminal charges?
• A philosopher’s take on Big Pharma marketing

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(1) Nissen SE, Wolski K (June 2007). “Effect of rosiglitazone on the risk of myocardial infarction and death from cardiovascular causes”. N. Engl. J. Med. 356 (24): 2457–71.

(2) GlobeScan (2012). The Pharmaceutical Industry: Issues & Reputation – A GlobeScan Stakeholder Intelligence eBrief.