CSR in Pharmaceutical Giants: a Hard Edge

Pharmaceutical companies tend to have a much more difficult time handling corporate social responsibility issues than other types of companies. The main reason is that they are heavily responsible towards the health of individuals and the society, while the social risks involved in the testing and consumption of drugs are also much greater than in other industries.

These risks interfere with important basic physiological and safety needs mentioned in Maslow’s hierarchy of needs[1], thus placing the drug companies under pressure to provide safe and efficient drugs for people, while also maintaining the balance between the other two components of sustainable development: planet and profit. According to the “triple bottom line” approach[2] on corporate social responsibility, these three aspects (social, financial and environmental) determine the degree to which a business represents a sustainable organization. Following this line of thought, I will further investigate how pharmaceutical giants have been dealing with the balance between these three variables, trying to identify the CSR focus areas that are specific for this type of industry.

Studying the corporate social responsibility actions and reports of some of the largest pharmaceutical companies (Pfizer, Merck, GSK, Bayer, Astra-Zeneca, Roche and Johnson & Johnson), it turns out that the specific responsibility focus areas of this industry are the following: global health, local communities, education, employees, ethics and transparency and environment. Their efforts in these areas, the success stories as well as some of the failures they encountered will be detailed further.

Global Health

The most important global health issues that drug companies focus on are directly related to known epidemics and infectious diseases specific to third-world countries, such as malaria, HIV/AIDS and river blindness. Numerous help and charity programs have been implemented by drug companies lately, focusing on providing free treatment for these diseases, in developing countries where medicines are scarce or not accessible.  For example, Merck and Pfizer have programs in place since 1987 and 1998 respectively, to donate medicine to countries in the developing world for the treatment of Trachoma, the river blindness disease. Both companies have donated over 2.5 billion (Merck) and 145 million (Pfizer) treatments since the beginning of their programs, as they are trying to reach the goal of eliminating this infectious disease.

Another example is the “Mobilize against malaria” initiative by Pfizer. This is a 5 year program (2007-2012) initiated in the sub-Saharan countries that are most affected by malaria – Ghana, Kenya and Senegal -, and it involves educational programs for patients and doctors, to increase the efficiency of malaria treatments and reduce the incidence of the disease. Pfizer also established the Infectious disease Institute in 2001 to help the prevention of HIV/AIDS in Africa, as well as the Diflucan partnership to help treat AIDS-related infections, by donating Diflucan treatments to countries affected by the disease.

 

Other help and donations programs focus on specific health situations found in developing countries around the globe:

  • Johnson & Johnson initiated the “Children without worms” program in 2005 to prevent intestinal worms in children from the tropical areas worldwide. The company has reached more than 20 million children with free access to the medicine called mebendazole, to help them get rid of intestinal parasites.
  • Another drug giant, Astra-Zeneca, has been working on a dedicated TB research since 2003, the aim being to find better treatment and medicine for the TB disease that still causes over 5,000 deaths every day.
  • The Merck Company donated numerous vaccines during the 3-year Nicaraguan vaccination program against the rotavirus infections in infants. This program has successfully helped reducing the incidence of this disease in children.
  • The Bayer Company has a 5-year donation program in place, to help treat patients of the sleeping sickness (caused by the bite of the tsetse fly) by providing free of charge medicine to the World Health Organization active in African countries such as Congo. Bayer also partnered with the WHO to develop insecticide-treated bed nets that prevent the spread of malaria[3].
  • Another health and wellbeing issue that was tackled with the help of donations by Bayer is the family planning program – the donation of over 2.5 billion cycle packages of contraceptives to health centers in the developing countries, since 1961.
  • Last but not least, Pfizer initiated a support program for the tobacco and cancer control organizations in 2007, with the common purpose of fighting lung cancer and other types of cancer indirectly facilitated by cigarettes.

All these actions taken by global pharmaceutical companies symbolize their understanding that they have a great responsibility for the health of mankind in a global perspective. The larger the company, the bigger its responsibility to the wellbeing of people around it, no matter their income or country.

Involvement in local communities

Besides their focus on global health issues, pharmaceutical companies also look to their surroundings, trying to provide local communities with help for dealing with specific health and wellbeing.

  • For example, Pfizer took multiple local health initiatives to educate the local communities and improve their knowledge on how to prevent certain health conditions. “Amigos en Salud” is one of them, focusing on Latino communities that suffer from a high rate of diabetes. “Balance it Out” is another program implemented by Pfizer in schools, to educate children to lead a less sedentary life, a healthier diet and a healthier lifestyle in general.
  • Merck sponsored the “Go Red for Women” heart health campaign, aimed to reduce cardiovascular disease in American women.
  • Johnson & Johnson’s campaign for Nursing’s Future is another example, dedicated to help recruit nurses and retain them, as an important part of U.S.’s healthcare system.
  • The Roche Company sponsored in 2005 the creation of 150 local camps for children with diabetes. Its staff provided advice and medical assistance to the local communities in Argentina, Ecuador, Greece, Korea and other countries where the company is active.
  • As part of their local community program, Bayer has been sponsoring national sport associations, individual athletes for the Olympic Games and the German Disabled Sports Association. Bayer also takes the initiative to develop cultural awareness in local communities, with the help of their Bayer Kultur program[4] (organizing and sponsoring numerous exhibitions, talks, workshops and creativity sessions).

It is therefore obvious that many global pharmaceutical companies consider local communities to be an important part of their corporate social responsibility policy, having numerous programs in place to help communities with certain local issues or to support their participation in social and cultural activities.

Research and Education

A third, important aspect of corporate social responsibility for pharmaceutical companies is their involvement in education programs related to science and health, as well as the support of science research projects through grants.

  • For example, GlaxoSmithKline started the project ENTHUSE in the UK in 2009, with the aim to improve the professional development of science teachers, while providing them with resources to motivate their pupils to become more interested in science. The company also has numerous help programs and grants in place in the US, to help develop the skills of science teachers, to encourage young people and pupils to study science and become professionals.
  • Roche also supports a large number of institutes for academic research, such as the Roche Foundation for Anaemia Research and the Roche MBA Fellowship programme. These organizations sponsor professionals and MBA students in their academic research projects.
  • Pfizer has had a Medical & Academic Partnership Program since 1984, sponsoring research projects and offering grants to motivated young scientists worldwide.
  • Last but not least, in 2005 Bayer teamed up with National Geographic to create the Global Exploration Fund that challenged scientists around the world to come up with solutions for protecting drinking water.

The involvement of pharmaceutical companies in sponsoring academic research might be viewed as a win-win situation on both sides: the companies automatically benefit from research results that directly concern their product research and development process. From the social point of view, education and science is promoted with the help of these programs, thus supporting the development of the society in general.

Care for employees

The care for their own employees is something most pharmaceutical companies emphasize in their corporate social responsibility policy. Pfizer, GSK, Astra-Zeneca, and Roche – all highlight employee safety measures, together with talent management and development, employee retention, professional development and learning, and employee wellbeing. Abbott, J&J and Astra-Zeneca have special employee health and wellbeing programs in place, to stimulate them to live a healthier life. All in all, the majority of global pharmaceutical companies highlight their employee care as an important aspect of their CSR policy.

Ethics and Transparency

Most pharmaceutical companies mentioned in this paper are concerned for their business ethics and transparency, as part of the corporate social responsibility.

  • Astra-Zeneca and Johnson & Johnson openly mention their ethical practices regarding research and marketing and advertising, directly on their website. They also stress the transparency of their clinical trials[5] and the strict business ethics requirements they request from their suppliers.
  • GSK publishes freely on their website complete lists of consulting fees paid to US healthcare professionals as well as lists of grants for patient group funding and charitable giving, thus emphasizing transparency in their marketing practices.
  • Merck also publishes the results of its clinical trials, the grants offered for healthcare professionals, the payments made to physicians and healthcare providers, as well as its sales and marketing practices.

This focus on ethics and transparency seems to be quite a new trend for most pharmaceutical companies, rising steadily in the last few years. Although not all companies disclose this kind of sensitive information on their websites, most of them recognize the need for transparency as a sound practice in corporate social responsibility.

The Environment

Although not the primary CSR concern for pharmaceutical companies, the environment does stand among the main topics. Most pharmaceutical companies strive to minimize their emissions to air and water, by using recycling techniques and new, greener technology that helps reduce pollution. Among the companies who actively pursue an emission-reducing policy are Novartis, Abbott, GSK, Pfizer, J&J and Astra-Zeneca. Other companies are actively involved in reducing their energy and water consumption, using green energy and reducing their waste. Some examples are: Johnson & Johnson’s and Astra-Zeneca’s 10% water use reduction plan, Pfizer’s and Abbott’s “Green Buildings” and Merck’s Smart Energy program for reducing the energy consumption.

The failures

Nevertheless, despite the global responsible efforts and CSR success stories we have seen until now, there are also social responsibility failures, some of them followed by major lawsuits and scandals.

  • In the first years of the 21st century Merck had a prestigious arthritis drug on sale in the US called Vioxx. Studies revealed that the drug increased heart disease risk by as much as 2.6 times. As a result, by 2004, when Merck pulled Vioxx from the market, more than 40% of the patients who took the drug had suffered severe heart problems, resulting in as many as 35,000-55,000 estimated deaths. According to David Graham, a FDA (Food and Drug Administration) official, it was “maybe the single greatest drug-safety catastrophe in the history of this country”. Following major lawsuits that lasted until 2007, Merck settled 3,468 claims from a $4.85 billion settlement fund. However, despite hard evidence, Merck never admitted that their drug caused heart injuries.
  • Another case of failure for corporate social responsibility is Pfizer’s Nigeria scandal. In 1996 Pfizer conducted a clinical trial on 200 sick children during a meningitis epidemic in Kano, Nigeria. The trial tested the new drug called Trovan, which was already approved for use in the US, but only for adults. As a result, 5 children died after taking the medicine and others were left blind, deaf or brain-damaged. The Nigerian officials filed criminal charges that were concluded upon only much later in 2009, with a $75 million settlement in favor of Nigeria. Later research on the drug revealed that it was associated with liver damage and deaths, so the drug was banned on the European markets in 1999.
  • The subject of clinical testing has since become a very hot issue, emphasized by other scandals such as the unethical HIV drug clinical trials on orphans, done illegally by GlaxoSmithKline in 1995 in the UK. Another example is the Russian vaccine scandal from 2005, involving GlaxoSmithKline in a series of allegations about illegal clinical testing on infants and small children.

Cases of bad CSR practice were encountered in all pharmaceutical companies in the last 20 years, most of them concerning unethical or illegal marketing and sales tactics and unethical or illegal clinical testing. This is perhaps the reason why so many of the global pharmaceutical companies have learned that transparency of this information is important and necessary. However, even if corporate websites now contain this information, it does not mean this will stop future failures in corporate social responsibility for pharmaceutical companies.

Conclusion

In the case of pharmaceutical companies, it seems that being responsible for people’s health and safety poses a hard edge in the balance between people, planet and profit. It is clear that for this industry the main balance that needs to be achieved is between people and profits, because these areas are much more delicate and more important than the third component. Most cases of bad CSR practice came to light when profit weighted more than the society and people, in the eyes of the company representatives. However, the risk of scandals, bad publicity and reputation damage is so great that most of today’s pharmaceutical companies seem to re-evaluate this balance and the importance of the society component in the equation. Hopefully, they have learned that they need to keep their balance on this hard edge, in a constant effort to keep the shareholders’ greed at bay while delivering safe and effective solutions for people’s health.


[1] Abraham H. Maslow, 1943 – “A Theory of Human Motivation”

[2] John Elkington, 1998 – “Cannibals with forks: the triple bottom line of 21st century business”

[3] malaria is caused by the bite of Anopheles mosquitoes

[5] testing of medicines on human subjects

 

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