nicole gray | biopharma | 10 september 2015
This article first appeared in BioPharma.
GlaxoSmithKline’s (GSK) reputation has been battered by a series of “scandals” that have made headlines and destroyed careers. Last year’s high-profile bribery scandal in China, which led to a $489 million fine, along with allegations related to a sex tape, probably put the biggest dent in GSK’s image. However, in the months since the scandal peaked, other allegations of wrong-doing have emerged in GSK’s offices in Poland, the United Arab Emirates, Lebanon, Jordan, Syria, and Iraq. And looking back to 2012, GSK’s healthcare fraud scandal in the U.S. resulted in criminal charges and a $3 billion fine.
Last week, PatientView released results from a 2014 survey, “The Corporate Reputation of Pharma—from a Patient Perspective,” detailing the views of 76 U.S.-based patient groups on which companies have the best corporate reputation based on six different factors, including integrity.
Of the 11 large, multinational pharmaceutical companies included in the survey, GSK ranked 10th out of 11 overall, and in last place with respect to integrity.
Companies get it right a lot of the time—even GSK
Recent events may lead some to believe that GSK is a hotbed of corruption, compliance breaches, and opportunism. But according to Natalia Misciattelli and Stefanie Baumgaertner, life sciences experts at PA Consulting, an international consulting and innovation firm, that snap judgment is incorrect.
"It may seem that GSK is always in hot water, but it’s not that simple," Misciattelli explains. "GSK is a large, multinational company with employees in 115 countries. The bar is high, and it’s difficult to get it right. Given the complexity of operating across so many different cultures, it’s easy to get it wrong and have compliance breaches blow up into big problems. In reality, GSK and other large pharma companies get it right more often than they get it wrong."
Good values, bad behavior
The biopharma industry is not alone in confronting corporate integrity challenges. A recent survey from the Ethics Resource Centre (ERC) reported that 45% of surveyed U.S. employees said that they had observed misconduct in the last 12 months—but one-third of them did not report it. Based on the ERC’s analysis, this represents 20 million missed opportunities to address a problem. The main reasons that employees ignored breaches in integrity were a lack of trust and accountability, fear of retaliation and the belief that nothing would be done.
Compliance breaches don’t happen in a vacuum, and usually the people involved in corporate misconduct don’t set out with the intention of breaking the rules. According to Misciattelli, "People in pharmaceutical companies are really passionate about doing the right thing, especially in R&D."
In fact, putting recent scandals aside, GSK has a good reputation in many ways. It is a highly ranked company in the Global Access to Medicines Index and has committed 20% of its profits to investing improving healthcare infrastructure in the least developed countries. It also has a reputation as a company that fosters equality and tolerance. Moreover, in the face of the corruption scandals, GSK has come out and declared zero tolerance for this type of behavior. All of this is consistent with GSK’s official mission: “To help people do more, feel better, live longer.”
Why a gift by any other name is a bribe
So how do all of these positive qualities and corporate values lead to situations in which GSK employees bribe doctors or participate in other fraudulent marketing and non-marketing activities?
According to Stefanie Baumgaertner, “Although people want to do the right thing, there are three mental switches that lead to compliance breaches—self-deception, rationalization, and disengagement. Also, people in pharma companies are operating in an intercultural environment, in which cultural biases and differing norms may pull an employee in a certain direction.”
A common example often occurs in Asian countries where business activities are relationship-based and gift-giving is the norm. However, in certain cases, the giver may be requesting something in exchange for the gift. This is where self-deception comes in.
Baumgaertner says, “If an employee has an excessively optimistic or over-confident view he or she may assume that the giver is being culturally appropriate within that country’s market and that accepting the gift is not a problem. But clearly it is, given the rules governing gifts and bribery in the pharmaceutical industry, regardless of location.”
And then there is rationalization. Employees often rationalize to their actions by saying to themselves, “I know this is wrong, but I have a good reason for doing this.” Under the pressure of short-term goals, the right thing to do can seem wrong, and the wrong thing can seems right. For example, a sales representative may justify the need to promote a drug for unapproved uses in order to meet a sales target or to provide therapeutic benefit to patients.
As Baumgaertner explains, “People adapt to a culture. They think that fitting in provides recognition. So how can you change that from a top-down perspective? It’s important to understand values, culture and how people behave. Also, appropriate behavior has to be linked to performances. You can only change behavior when there are consequences.”
Tips for enhancing compliance
Misciattelli and Baumgaertner say that the first prescription for improving compliance is being more open. “People don’t talk openly, because they don’t want to raise the topic. Once again, how you treat compliance breaches goes back to cultural values. Regardless of the cultural values, the corporate value of open communication must be implemented.”
In addition, compliance programs should be structured to work against the common problem of disengagement. “If whistleblowing happened more often, compliance programs would not fail as much as they do. Only 15% of employees know who to contact in an unethical situation. It’s important to acknowledge that mental switches are not enough. The journey needs to start with embedding values in peoples’ beliefs and actions to achieve their emotional engagement,” Misciattelli explains.
Another tip this team offers is having very visible role models, because having visible role models works well in controlled environments. “We saw a good example of this recently with a situation in which a very senior leader in oncology was talking to his team about how he believes that non-compliance affects patients’ lives. His basic point was, ‘If we had the money we used to pay fines for our bad behavior, we could have done something wonderful for patients.’ These values are communicated from the top down and they stick,” says Misciattelli.
Finally, the team cautions that it’s important to remember that one solution does not fit all. Obviously, the guidance in the U.S. will be very different than the guidance in China, but the rules are still the rules. Baumgaertner says, “When putting programs in place you need to understand the rituals of a given office culture and the internal levers.”
The role of psychology
Anyone involved with pharmaceutical compliance has seen programs that focus on developing a set of standard operating procedures (SOPs), creating firewalls in the IT system and engaging in the business transformation aspect of compliance. However, because of the complexity of managing people across cultures in various settings in an environment that is literally defined by regulatory oversight, Baumgaertner and Misciattelli emphasize that factoring in psychology is the only way to truly win the compliance game.
Even as multinational pharma companies continue to engage in what seems like an ongoing battle against internal breaches, they are engaged in the good work of creating medicines to improve the quantity and quality of life for people around the world. By taking this global perspective and cross-cultural understanding of the value of human life and applying it to a corporate setting, it is possible to get it right more often—and decrease the need to publicly apologize.