Price Becaomes a PR Issue for Pharmaceuticals (1993)
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Price Becaomes a PR Issue for Pharmaceuticals (1993)

When Burroughs-Wellcome introduced the first drug authorized for fight­ing AIDS in 1987 itexpected to be treated as a hero. Instead, it was accused of allowing patients to die in clinical trials, and pricing the drug at levels that exploited patients.

Paul Holmes

 

When researchers at Burroughs-Wellcome introduced the first drug authorized for use in fight­ing AIDS in February of 1987 they expected to be treated as heroes. Instead, the company was accused of stealing credit for the discovery of the drug, allowing patients to die in clinical trials, and pricing the drug at levels that exploited patients.

A month after approval, company officials were called before a hearing of the Subcommittee on Health and the Environment to answer charges of price gouging. A few weeks later, 250 members of the AIDS activist organization Act Up stormed into Wall Street, hung an effigy of Food & Drug Administration commis­sioner Frank Young in front of Trinity Church and sat down in traffic during rush hour. In October, 1,000 activists showed up to shut down the FDA itself.

"AZT's Inhuman Cost," was the headline in The New York Times, which published a series of editorials condemning the com­pany. Barron's estimated that Burroughs would make $200 million in profits off AZT in its first year. Its share price rock­eted; its reputation plummeted.

It became clear that Burroughs had not given much thought to either the human or public relations consequences of its pricing decision. "I guess we assumed that the drug... would be paid for in some manner by the patient himself out of his own pocket, or by third party payers," said then-president Theodore Haigler. "We really didn't get into a lot of that."

The company compounded its problems by refusing to answer congressional ques­tions about how much AZT had cost to develop, justifying that decision by arguing that critics would have attacked the pay of chief executives and that doing so would have created a precedent, that pharmaceuti­cal companies would have been compelled to justify their prices forever.

Nor did Burroughs have a program in place to reach out to AIDS groups: that task fell to a woman who had originally been hired to answer phone calls from AIDS patients wondering where to find AZT. It did not even promote a program to provide the drug free to patients who could not afford it, fearful that it would be inundated with requests.

Burroughs clearly did not understand the environment in which it was operating. "If we wrapped the drug in a £10 note and gave it away, people would say it cost too much," said Alfred Shepperd, retired chair­man of London-based Wellcome plc.

Yet the patient activism movement that came of age with AIDS was to a large extent a creation of the pharmaceutical companies themselves.

Julie Wang, president of Wang Associates, a specialist health care agency, worked on what is widely believed to be the first campaign for a prescription drug product, Merck & Co.'s Pneumovax, to feature direct to the consumer advertising and a PR campaign that included placing physicians on radio and television to talk about this new vaccine that consumers' doctors may not know about.

That was in the '70s. Throughout the '80s, pharmaceutical companies devoted more and more attention to consumer edu­cation, urging patients to ask more ques­tions—and better informed questions—of their physicians, to request specific treat­ments. Many doctors were uncomfortable with this development, but for drug makers it opened up a whole new realm of market­ing, and for patients it meant more infor­mation, more control over their own health.

What pharmaceutical companies did not anticipate, Wang says, was that armed with a little knowledge patients would not stop at questioning physicians about their medi­cation, but would go on to question the whole process by which drugs were brought to market, the system of clinical trials, research and development spending and pricing decisions that had traditionally been made by white men in white coats behind closed doors.

The AIDS community, facing a life or death issue, was the first to force its way into the health care public policy debate. People with AIDS were willing to assume a high degree of risk is trying experimental therapies, says Paul Oestreicher, svp at Medicus PR and a member of the Pharmaceutical Manufacturers Association task force on AIDS. They questioned every aspect of the FDA's tortuous approval pro­cess.

As the AIDS movement organized itself, it established principles promoting the idea of self-empowerment: people with AIDS should form cau­cuses to choose their own rep­resentatives to deal with the media, should be involved at every level of decision-making and serve on the boards of directors of provider organiza­tions, should be included in all AIDS forums with equal credi­bility as other participants.

"The pharmaceutical indus­try has been doing business a particular way for 20 years," says Lisa Fullam, head of health care at Fleishman-Hillard. "Suddenly, a process that was traditionally sacrosanct is now a matter of public record. Something that was the province of corporate scientists is now subject to market forces. I think it put the fear of God into them."

Access was an important issue. AIDS activists pressed for new rules that would make more information available on open trials and even set up their own trials. They also attacked the use of placebos, which the scientific establishment had traditionally argued made drug trails both faster and more reliable, pointing out that placebo trials sentenced those receiving placebos to death and were discouraging people from enrolling.

"Never before in history has the medical establishment confronted such a mobiliza­tion of angry, impatient and well-informed citizens from communities affected by a disease," said Act Up spokesman Mark Harrington. "No longer will we sit and wait for scientists and bureaucrats to proceed in a research enterprise that all too often undermines the health of those in trials. No longer will trial subjects allow themselves to be used as grist for researchers' data mills."

A community-based network of medical trials sprang up, parallel to the govern­ment-approved process, but with input from people with AIDS. They were publi­cized by newsletters like AIDS Treatment News, which swiftly became the voice of the underground treatment movement, exhort­ing people with AIDS to develop their own medical expertise and fighting to change the standard operating procedures for drug development held sacred by the network of scientists who controlled the National Institutes for Health and the Food & Drug Administration.

These are channels of communication that public relations professionals need to know about, and can tap into, says M.J. Wyatt, head of health care at Ruder Finn. "There are newsletters and informal infor­mation networks that can get information out to AIDS groups as quickly and effi­ciently as the Pink Sheet gets information out to the medical community."

Some newsletters produced by the AIDS service organizations (ASOs) come off press within a week of an AIDS conference or an analyst briefing, says Ellen Murray, a prin­cipal in health care PR firm Davies & Murray, who contrasts that with the two or three month lead time of many mainstream medical publications.

Davies & Murray produces a newsletter for the professional community dealing with AIDS issues, and while it is con­strained by Food & Drug Administration regulations on fairness and balance (unlike ASO materials), it is quick turn-around publication without the expensive produc­tion values of most corporate materials.

"These people don't want to see glossy production and four-color, they want hard information and they want it fast," says Murray. "In some respects it would be irre­sponsible to delay publication by even a day to make it look more professional."

All of this changed the public relations necessities of launching a treatment in the AIDS arena dramatically.

"What AIDS has done is redefine con­stituency relations for pharmaceutical com­panies," says Murray. "Today, companies can't just make a media announcement about a new products, for talk only to analysts and to the scientific com­munity. They need to approach patients and their families and build partner­ships, involve them in the drug development process at every step."

Public relations counsel is being called in much earlier in the drug development process than was previously the case, says Ilyssa Levins, president of health care PR agency GTFH. Many pharmaceutical compa­nies are now hiring PR firms four and five years before they expect approval, rather than four or five months.

"It's very important to manage expecta­tions, to keep activist groups and patient groups informed about what the drug might actually be capable of, to ensure they are aware of what the cost is likely to be," says Levins. "It's crucial, because any kind of hype can be very damaging."

Surprisingly, many public relations pro­fessionals who have been involved with AIDS issues believe the activist movement has been beneficial in its impact.

"In the early days, some of the AIDS health care conferences were just pitiful," says Ellen Murray. "There would be a couple of people in a booth giving out information. The big drug companies just weren't interested. They had no idea how to approach the issue. The activist commu­nity drove the issue, they galvanized the entire industry."
"They've humanized the pharmaceutical companies," says Julie Wang. "They have been forced to meet with groups like Act Up and consider them as human beings whose lives are at stake, rather than just as consumers. They can no longer pretend they don't understand the issues."

Pharmaceutical companies had been pro­tected, isolated from the patient commu­nity, for a long time, says Lisa Fullam. These companies were taken aback by the approach and the very justified anger of the activist community and need public rela­tions counsel to help them understand where those organizations are coming from and how they can work with groups like Act Up.

While many companies are terrified of activists, there are ways in which their energy and commitment can be harnessed.

"I think there is a tendency to character­ize the AIDS community as though it were one solid block, to judge the whole commu­nity by the actions of some of the louder, more controversial groups," says Paul Oestreicher. "There are hundreds of advo­cacy groups out there and they have very different agendas: political agendas, civil rights agendas, health care agendas. If com­panies develop policies towards the whole AIDS community on the basis of the most dramatic and disruptive activities they see in the media, they will miss an important opportunity."

Corporate policy cannot be made on the basis of media coverage, but rather on a thorough analysis of the market, Oestreicher says. The first role of many public relations counselors has been to broaden the scope of their companies' vision, introducing companies to AIDS groups with which they can form produc­tive alliances.

"There will always be groups that don't trust the pharmaceutical industry," he adds. "But there are groups I have heard charac­terized as crazies by one company that other companies deal with quite success­fully. You have to get people on both sides to recognize that the other side is not the enemy, AIDS is the enemy. And you have to get people to realize that profit and health are not mutually exclusive."

Similarly, Fullam says, AIDS activists have to realize that many scientists working within the business community have a real commitment to eradicating the disease.

"I have been in boardrooms where I believe there was a genuine commitment to fighting AIDS whether there is a profit in it for the company or not," she asserts. "I have seen scientists at one client company working literally around the clock on this issue, and I do not believe they are moti­vated by profit. It's an over-simplification to say business is only interested in making money out of this tragedy."

One of the companies that has done a good job of reaching out to the AIDS com­munity in recent years, after its initial mis­steps, is Burroughs-Wellcome.

"When Burroughs-Wellcome brought AZT to market it was the first approved treatment for the disease," says Nancy Rueth, head of health care at Burroughs PR agency Ogilvy Adams & Rinehart. "The AIDS activist community was just coming into its own. Both sides were learning the rules as they went along. Since then, Burroughs-Wellcome has done an incredi­ble job of building a relationship with those groups."

For one thing, the price of AZT is now down to $2,200 per year. For another, Burroughs has contributed more than $5 million over the past five year to HIV­related services and programs, including a recent $1 million grant to the American Foundation for AIDS Research for commu­nity-based trials. It also formed an advisory board of AIDS community groups to help it better understand the needs of people with AIDS.

"We felt we had some repair work to do," says Burroughs-Wellcome corporate and consumer affairs manager Lisa Behrens. "It was important for the com­pany to realize we were recognizing a new partner in health care."

Activities have included a series of one­day seminars for counselors of people with HIV, a Living with HIV consumer infor­mation campaign, and special initiatives to extend the use of treatment newsletters to wider audiences. Special programs have tar­geted women, IV drug users, people of color and adolescents.

Bristol-Myers Squibb is a company that clearly learned from Burroughs' mistakes. Prior to the introduction of videx, a drug approved for HIV-positive people who are resistant to AZT, the company met with Act Up activists and gave them a role in the clinical trial process, and made videx avail­able without charge to around 23,000 patients who did not qualify for clinical trials and offers a assistance program to help patients find third-party payers to cover the cost of treatment.

"This is a perfect example of a company that said: `We want to work with you,"' says Wayne Kawadler, executive director of the People with AIDS Health Group. The group criticizes other companies, however: Astra Pharmaceuticals, maker of foscavir, which can prevent blindness in AIDS patients, has been targeted over the "outra­geous cost" of the product, and a boycott is being organized; Janssen Pharmaceuticals faces similar criticism over its anti-fungal sporanox; and Hoffman La-Roche has been accused of restricting access to clinical trials.

And AIDS activism has not only affected pharmaceutical companies. When Northwest Orient Airlines announced it would not allow people with AIDS to fly on its airplanes, Act Up responded with a "phone zap", a telephone campaign that flooded the airline with protest calls and phantom reservations, and demonstrated in front of the company's New York head­quarters office.

This kind of patient activism is unlikely to be restricted to the AIDS issue.

"We just saw the tip of the iceberg with AIDS," says Kathy Hyett, head of health care PR at Creamer Dickson Basford. "The gay community had a tremendous ability to mobilize on this issue, because it was unusually affluent and very politically savvy. But what AIDS activists did was pro­vide a blueprint that other groups can now follow."

Paul Oestreicher says one market where developments are beginning to parallel those in the AIDS community is the alzheimer's market, the major difference being that here companies are dealing with care givers—children and spouses of patients—rather than with patients them­selves. Alzheimer's activists are becoming more vocal, providing input into the way clinical trials are developed and serving as clearinghouses for patient enrollment. The Alzheimer's Association recently held a four-day conference in Washington, D.C., which had twin objectives: education and a demonstration of potential lobbying muscle.

Meanwhile, more radical cancer patients have formed a group called Can Act (Cancer Action), which is modeled after Act Up, and breast cancer groups in particular are taking a more active role, pointing out that the dis­ease kills more people each year than AIDS. Some women's groups have taken to wear­ing pink ribbons that draw on the image of the AIDS movement's red ribbons.

"Women's health issues are going to take on a new importance over the next few years," says Hyett. "Baby boom women are beginning to reach menopause, and baby boomers are a very demanding group. Now they are demanding attention."

Ellen Murray agrees that women have been "totally understudied" in research trials, a problem she attributes to the fact that in most cases it has been men doing the research. In fact, she says, most research has concentrated on white men, excluding minorities, despite the fact the black men are more likely to suffer from hypertension, asthma and other conditions.

While minority groups are not yet as politically coordinated on the health care issue as some other groups, Murray suggests it will not be long before the racial composi­tion of clinical trials becomes an issue, and says smart pharmaceutical companies should be considering that likelihood today.

And the elderly, who have been active participants in the health care debate for years are also becoming more active, with the American Association of Retired Persons (which some consider to be the most effective special interest group in Washington) supplemented by newer, more radical groups.

"We believe it's important to sit down with these groups and find out how we can help them meet their needs," says Ruder­Finn's M J. Wyatt, whose agency now has a specialist Mature Markets group to deal with older audiences on issues such as this one. "Rather than coming to them with a package and asking them to put their names to it, we believe it is more constructive to consult with them and come up with pro­grams that meet our client's needs and theirs."

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