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Big Pharma Seeks an Image Cure

Where's the love for Big Pharma? Fewer than half of U.S. consumers have a favorable view of the drug industry -- and according to the latest Reputation Quotient study, only tobacco ranks lower in the public's estimation. Even druggists are sour on it. A survey released in December showed just 52% of the nation's pharmacists have a positive view of drug companies, and 80% say prices are too high.

The industry's reputation could suffer even greater damage next year when filmmaker Michael Moore is set to release his cinematic assault on the American health-care system, which will focus in part on how drugs are marketed. The proposed title says it all: Sicko.

LESSONS FROM JAPAN. In the face of all that animus, U.S. drugmakers are scrambling to resuscitate their collective reputation -- and they've got a lot of room for improvement. Just look at Japan. There, more than 70% of the public believes its pharma industry is trustworthy.

It's not hard to see why there's a perception gap, says Hatsuo Aoki, chairman ofTokyo-based Astellas Pharma. Patients in Japan don't have to deal with sky-high drug prices because the costs are covered by universal health care. What's more, Japanese drug companies don't produce the high profits that their U.S. counterparts are known for, and their top executives aren't similarly compensated.

"The idea of the corporation in Japan is different than in the West," Aoki says. "We don't only serve investors. The public and our employees are considered just as important."

While U.S. pharma executives aren't rushing to cut drug prices or take big salary reductions, they're trying a number of other tactics to woo a hostile public. For one, companies are starting to tone down the hard sell in consumer advertising that many people find offensive. Plus, the pharmaceuticals are expanding programs that subsidize drugs for the poor and uninsured.

NOVEL APPROACH. Many patients are concerned that "the medicines we make will not be available to them," says Billy Tauzin, formerly the influential chairman of the U.S. House Commerce Committee and, since January, the president of the Pharmaceutical Research & Manufacturers of America (PhRMA), the industry's main lobbying group. "That plays a significant role in the loss of trust that afflicts the industry," Tauzin says. His solution: educate patients about the importance of the Medicare drug benefit, though he's short on details for guaranteeing access to those ineligible for Medicare.

Then there are the wackier efforts. Early in 2005, a PhRMA employee commissioned two writers to pen a thriller focusing on the dangers of smuggling prescription drugs from Canada. A few months later the book was rejected as badly written, and the writers, Kenin M. Spivak and Julie Chrystyn, decided to turn their manuscript into a completely different thriller about an evil drug company that poisons Canadian-sourced drugs. The Karasik Conspiracy, published by Phoenix Books, was released on Dec. 1.

Other attempts hold more promise. The industry is pinning a lot of home on an overhaul of direct-to-consumer advertising. Merck's (MRK) Vioxx debacle appears to have delivered the message that it's not such a good idea to persuade millions of people to take a drug they may not need. So there's a slow shift away from ads that push a particular brand of drug to those that raise awareness of specific diseases.

SEX SYMBOL? The hope with such strategies is that viewers who think they have a particular ailment will check out the advertiser's Web site and learn about treatments. "There is a real sense that the branded ads were selling too hard," says Fariba Zamaniyan, vice-president of the pharmaceutical division of IAG Research, which measures advertising effectiveness.

Disease-awareness ads can be hard sell, too, however. Bayer HealthCare, a unit of Bayer (BAY) and the maker of Levitra, has drawn a lot of attention in recent days -- not all of it flattering -- for hiring Jerry Hall, the model and ex-wife of Mick Jagger, to encourage more openness about erectile dysfunction. She is leading Bayer's "Strike Up a Conversation" campaign.

Hall, 49, is often quoted for her prescription for a happy marriage, uttered while still married to Mick: "You have to learn to be a cook in the kitchen, a maid in the parlor, and a whore in the bedroom. And I would rather hire the first two and do the last bit myself." Says John Mack, publisher of Pharma Marketing News: "So much for a wholesome image that should, in a more perfect world, be encouraged in spokespeople for pharmaceutical products."

"BE PROACTIVE." Some in the drug industry are making more serious attempts to address the image problem. Bristol-Myers Squibb (BMY) has decided that it will wait at least a year after the launch of a new drug before it starts mass-media advertising, giving doctors a chance to familiarize themselves with the medicine before patients start demanding it. It also plans to disclose the results of all clinical trials, even the failed ones. "In a climate of suspicion and misgiving, we must be proactive in rebuilding confidence and respect," Bristol-Myers CEO Peter Dolan said in November.

The industry could just learn to live with the enmity, of course. Drugmakers still have plenty of political clout, given that the industry donated almost $30 million to political campaigns in 2002. On the other hand, "they need employees who are highly motivated, and morale is pretty bad in the industry right now," says Mack. One suggestion for those demoralized workers: Steer clear of The Karasik Conspiracy.

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