Opinion

The Great Debate

Business must change to earn back the public’s trust

By Reuters Staff
March 17, 2010

– Jeff Kindler is the chairman and CEO of Pfizer. He has agreed to reply to readers’ responses about this opinion piece. The views expressed are his own. —

While it’s encouraging that slightly more people say they trust business and government today than a year ago, surveys show more than 70 percent of Americans and Europeans fear companies and governments will return to business as usual once the recession ends. It’s easy to see why.

In just the past year, a UK accounting scandal forced out the Speaker of the House of Commons, for the first time since 1695. The Governor of Illinois was thrown out of office for influence peddling, and a Congressman was convicted of accepting bribes and storing the cash in his freezer.

Businesses haven’t done any better, from taking reckless risks with other people’s money, to Ponzi schemes, to insider trading. Many banks and automakers now owe their existence to taxpayers, who bailed them out then paid them bonuses. My own company paid a $1.8 billion fine after some of our sales people improperly promoted a medicine for uses the FDA hadn’t authorized.

Actions like these are leading people to demand more restrictions on business. People say banks should risk less, and pay their executives less. They want oil companies to drill less, and burn less. They want drug companies to charge less, but not do less R&D. Sometimes, this criticism is warranted. Sometimes, it’s not. But when people don’t trust you, they’ll find a way to force you to change.

If leaders fail to change, the shape of things to come will not be pretty, for companies or for society. And if any business or government leader thinks they’re exempt, they are wrong.

If we fail to change, then the real and legitimate anger that people around the world are feeling will lead to policy changes that could damage our competitiveness. Over time, it will mean lost opportunities for the private sector innovation that can create jobs and rebuild the economy.

It will take a lot of time and energy to earn and maintain public trust. We have to start by letting people know, “we hear you.” This new era of responsibility starts with acknowledging where we’ve gone wrong, showing that we’re making real changes, and demonstrating that we are willing to work together to address society’s most urgent problems.

At Pfizer, we’ve begun to change. We know we need to be straight with people. No one has any tolerance for corporate spin. So, we’re disclosing more information than ever. People can go to the Web to see how we compensate doctors outside our company, the progress our scientists are making, the results of more than 1,000 trials of experimental new medicines, and the outcomes of studies of medicines that are already on the market.

We’ve changed the way our salespeople interact with physicians. The golf trips are long gone. No more fancy dinners, or tchotchkes left in the doctor’s office. Fewer representatives in the waiting room, more training, and a greater focus on providing up-to-date information about the medicines physicians prescribe.

Meanwhile, we’re doing more to help people who cannot afford our medicines. Seventy percent of the world lives on less than $3,000 a year, according to the World Bank. That’s four billion people. In the past, we’ve reached them through philanthropy. Pfizer has given away 87 million treatments of Zithromax over the past few years to treat the infections that cause blindness in poor countries, for example. This has helped eliminate trachoma, the leading cause of preventable blindness, in many places.

But philanthropy alone isn’t enough anymore. So we’ve also started a new business to expand access to generic medicines. We’ve started another that aims to create a marketplace that’s not dependent on charity, and that will provide people living in the developing world with affordable medicines in a socially responsible and sustainable way.

These are all important changes, but we know we have to do more. So we’ve asked ourselves: How can we uniquely serve the world’s health needs? What can we do that no other company can do? What responsibilities come along with that?

We’ve made a series of commitments to ourselves and to the people we serve. For example, we have committed to advancing wellness, prevention, treatments and cures, because health is one of the most important investments a society can make. It’s time to move beyond simply helping people get better after they get sick. Shouldn’t we help them keep from getting sick in the first place?

Most people try to take care of themselves first, before going to see a doctor. This often means taking over-the-counter medicines for cough and cold, or aches and pains. This usually helps people feel better. It also reduces the burdens on health systems, saving money for all of us. As a society, we have to do more to advance health and wellness at every stage of life.

That’s why we’ve also committed to setting the standard for quality, safety, and the value of medicines. In a global economy, this requires us to combat counterfeit medicines. The World Health Organization estimates that about 30 percent of all prescription drugs on the market are fake. That’s why we partner with the FBI, the Drug Enforcement Agency, and customs officials to police the supply of medicines. We do all this because when we ask people to put our medicines in their bodies, people deserve to know that they are safe, that they work, and that they are worth it.

Commitments like these go to the heart of what we do as a biopharmaceutical research company. We know our license to operate depends on doing business with integrity and keeping our commitments.

The stakes are high. We know we will be measured not by what we say, but by what we do. If we don’t do what we say we will, then we’ll lose trust even further. Then we could lose customers or face more legal problems.

This is true for all leaders, whatever industry or public office they’re in. Everyone has a role in earning back trust, even if they didn’t contribute to the problem. It’s up to all of us to do it. Our success, even our survival, depends on it.

If you’d like to question Kindler about this piece, leave a comment below. We’ll put a selection of your questions to him in the coming days and publish his responses in The Great Debate.

Comments
13 comments so far | RSS Comments RSS

I applaud your company for taking the measures you have described. However, I cannot help but be skeptical of corporations that attempt to convince our government leaders to see things their way by their intense lobbying efforts. Our great leaders owe their livelihood to those who make campaign contributions, and the bigger, the more influence that is bought. Just look at the new proposed financial reforms being proposed, for instance, after the $400 million blitz of lobbying. Same ole same ole.

Posted by hoodypls | Report as abusive
 

I think the business climate has changed. Companies have developed internationally and are not able to sort out the influence of international corporate management. Some of these people have learned in a no rules environment both in school and on the job. They have put profits above integrity and that is a deadly combination. All the rules and regulations written will not fix this problem

Posted by fred5407 | Report as abusive
 

Business is inherently immoral or at least lacking in any morality that doesn’t enhance the bottom line.
Obviously, the only solution is careful regulation (wouldn’t want to shoot us in the foot now)
“It is harder for a rich man to enter the kingdom of heaven than for a camel to pass through the eye of a needle”

Posted by solarae | Report as abusive
 

” People can go to the Web to see how we compensate doctors outside our company”

1) This was mandated by a court settlement, was it not? It seems that this, and other regulatory measures mandated by court settlement, are overseen by Pfizer officials. Do you feel these court mandated, but self-supervised, measures add to the distrust your company faces?

2) By mention of these court mandated actions taken, you seem to imply a sense of pride in them and their ability to rebuild consumer trust. Does this mean you would be willing to cooperate in further court and/or government regulation?

Thank you and I look forward to your answers.
P. Moon

Posted by PMoon | Report as abusive
 

Hi, Mr. Kindler Question -are you willing to see that Pfizer opts out of protection as a “person” under the first amendment ? Bet you won’t.

Posted by gramps | Report as abusive
 

With patent protections going soon isn’t the sudden focus on generic drugs as much out of necessity than a conscious corporate decision? But with patent protections going how much would R&D be affected at a big company like Pfizer?

Posted by Rambler | Report as abusive
 

Mr. Kindler. I applaud you willingness to take questions. The problem here is that between management and investors, nobody cares about anything other than money. If a company does “the right thing” it’s because they have to, or because they were caught with their pants down. There is nothing wrong with profit. It just shouldn’t be higher on the priority list than actually caring about people.

Can you give an example of any time your company, or any company for that matter, has ever TRULY gone against the bottom line to do what is right?

PS: Your giving away zithromax is very commendable, but I don’t count that. It’s a very low cost drug, and giving it away was a great PR move and probably costs less than a good ad campaign. Ever give anything really expensive away?

Posted by mok | Report as abusive
 

Hi Mr. Kindler, I understand that you are trying to reduce costs of R&D but maintain the same level of research done within your company. Have you looked at open innovation where you could partner with other research firms to accelerate your drug development? I know that Sanofi and Merck are converging to that model where partnerships are going to be important in future research.

Posted by rajp | Report as abusive
 

Given the PR issues are there any initiatives underway to rebrand? For example: http;//Refreshes.com

Posted by refreshesdotcom | Report as abusive
 

Hi Jeff, firstly well done on the transparency I think this is really marking the start of a new era within business in particular pharma which is still struggling at times in engaging their patient consumer base.

I agree with your points on counterfeit drugs Jeff, unfortunately these tend to be a problem in 3rd world countries where money and education is not readily available for innovator or even generic alternatives. I realise that companies like Pfizer, Novartis, AZ, Novonordisk and Sanofi etc have set up some amazing programmes in Africa & Asia which should in no way be downplayed. But counterfeiting is a massive problem what can we all be doing to stop this problem?, do you feel pharma as a whole are making free drugs more readily available in these counterfeit hotspots to bring down the price of drugs as a whole? And are there enough outreach programmes to educate isolated communities on the dangers (or lack of effect) of counterfeit drugs as well as the diseases these drugs will treat. Is enough being spent? What are your thoughts on this.

Many thanks for your time and your candid interview.

Michelle Petersen

Posted by MPetersen | Report as abusive
 

solarae: Morals = the juristic person, ethics = society.

Jeff, this is all about numbers and money. Please could we have feedback on cancer research and the % of your R&D and for that matter, of the Health Bill and all the drama surrounding it.

Is it curable or are we chasing our tails and do we throw in the towel ? I know it is about quality of life etc. but that is talk, ultimately we will all hang on to dear life,is there a way to make it more ‘pleasant’ ?

Posted by Ghandiolfini | Report as abusive
 

Mr. Kindler, as you may already know, the recent health care reform legislation will end up benefitting the health insurance companies and drug makers like yourself. Nothing wrong with that. It only puts more pressure on you to realize your expressed intention to realy provide true healthcare to us ordinary folks.In this regard, you must also know the recent health care legislations will only influence the health insurance industry and not the provision of healthcare itself.

To do your part you must move beyond what your company does and what your shareholders expect of you. You must set benchmarks beyond just being a pharmaceutical company. I suggest you use the impending increase in your revenue to diversify your company’s portfolio into other aspects of healthcare. A good start will be the establishing of a network of non-profit or No-Frills hospitals and centers for primary care. This will help reverse the profit orientation of current private hospitals through their ridiculous construction of 5-Star hospitals that rival luxury resorts, catering for rich and sick people.( Do you really notice the piped in sound of bird songs amidst gushing fountains when you are lieing in your sick bed recovering from your heart surgery? These luxury hospitals are like expensive funeral parlors. They provide services that can only be appreciated by the relatives and friends of the dead and dying.) Unfortunately,they have set the standard of greed in the healthcare industry.

Posted by donjohn | Report as abusive
 

Thanks for your questions. Jeff Kindler has responded to a selection of them here: http://blogs.reuters.com/great-debate/20 10/04/08/pfizer-ceo-responds-to-your-que stions/

Posted by RichardBaum | Report as abusive
 

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