Pfizer's Fickle Philanthropy

In a series of announcements in the aftermath of the tsunami that swept that swept through East Asia and parts of Africa on December 26, 2004, Pfizer committed itself to contribute a total of $20 million in cash and $60 million worth of medicines. Pfizer's staff chipped in a further $2 million.

On its U.S. website, Pfizer listed its tsunami response as an example of its commitment to corporate social responsibility.

However, at a recent drug industry marketing conference in Sydney, Pfizer Australia's Manager of Government Affairs, David Miles, said that the company would have been better off being less generous. "We would be better off giving five million and shutting up," Miles said, only a little jokingly. "As soon as you get into big numbers people think you can double or triple it."

Miles made the comments during a panel on "reputation management" at the Australian Pharma Marketing Congress. He also argued that in Australia, "people have a discomfort with the combination of healthcare and the profit motive." (I don't doubt that his assessment is accurate, but the concern is global.)

To illustrate his point, Miles cited the industry's response to tsunami, which the World Bank estimates killed approximately 300,000 people and destroyed the homes and livelihoods of a further 2 million.

Miles told the conference that the general view amongst drug companies in Australia was that contributions to the tsunami appeal would not be publicized. Then, he recounted, callers to talk-back radio programs in Australia demanded to know what the industry was doing. After the drug industry trade association Medicines Australia publicized various company contributions via two media releases, Miles said talk-back radio callers argued that even more should be contributed. According to him, the reaction was, "Well, if you can give $60 or $70 million, why can't you give $100 million? Or why can't you do $120 million?"

It was at this point that Miles said Pfizer would have been better off giving less and "shutting up."

Miles' comment provides a small window into how some industry movers and shakers view "corporate social responsibility." What is presented to the public as public-spirited generosity is actually viewed internally as a line item measured against the same self-centered "return on investment" criteria used to evaluate selling drugs. Also notable was that Miles' tasteless comment went unchallenged by others at the Australian conference.

Nor are the talk-back radio callers who expect Pfizer to do more unreasonable. Pfizer – which had global sales of $52.5 billion with net income of $11.3 billion in 2004 – is ranked in the 2005 Financial Times Global 500 Index as the world's seventh largest corporation.

While $20 million may sound like a lot, it is worth bearing in mind that in 2004 Pfizer's Chairman of the Board and Chief Executive Officer, Hank McKinnell, was paid $6.23 million in salary and bonuses alone, with millions more in stock and other benefits. Similarly, the $45 million worth of medicines is calculated on wholesale prices – on which the company still makes a profit – not on the much lower cost of production.

While Miles thought the talk-back callers' reactions were unjustified, he had a taste of how little the public thinks of the drug industry before he even started working for Pfizer.

Earlier in the panel session, Miles recounted how, in the period between accepting his job as Pfizer's Australian lobbyist and his first day of work, he tallied the comments people made to him about his career choice. According to Miles, 90 per cent of the feedback consisted of comments such as "You are going to join the dark side" or "the evil empire."

Miles was especially bemused that the people he spoke with who were critical of the drug industry also acknowledged that it developed life-saving medicines.

Miles' puzzlement reflects an expectation that the industry's production of some "life-saving drugs" should be sufficient to swamp any concerns citizens have about potentially dangerous side effects, high drug prices or questionable PR and lobbying campaigns.

Nor did Miles appear to appreciate the contradiction between his expectation that the industry be loved for its "life saving" drugs and his suggestion that Pfizer would have been better off giving less to the two million tsunami victims desperately in need of assistance.

As Miles' comments on the level of Pfizer's support for the tsunami reconstruction efforts demonstrate, it is little wonder that the drug industry has a reputation problem.

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