Industry urged to adopt greater CSR

A more committed approach to Corporate Social Responsibility (CSR) is urgently needed if the financial success of the pharmaceutical industry is not to go into a steep decline, say industry advisors at UK professional services firm KPMG. It blames the situation in which the pharmaceutical industry now finds itself on CSR shortcomings - in particular its lack of a listening approach - and says that many of the current problems in the areas of pricing and intellectual property would have been much reduced if the industry as a whole had implemented better CSR approaches earlier.

'Several years ago, the pharma sector could have confidently asserted that its image was excellent and that the future held few concerns. However, that was before an alliance of disparate interests brought the industry to task over price and patent concessions, particularly to developing countries,' said John Morris, European Head of Pharmaceuticals at KPMG. 'Since then, although individual companies have made some significant concessions, the industry as a whole has demonstrated an inflexible and short-term approach that has served only to weaken its own position, commercially and socially.'

But the situation is improving, he believes, with some senior corporate executives appearing to appreciate the need for more flexible and responsive global policies on issues such as pricing and intellectual property. 'Unfortunately, this shift may have come too late. There is now a well entrenched perception of pharma companies as arrogant and prepared to listen and respond only when extreme political pressure is exerted,' Morris warned.

'All major pharma companies no doubt have a CSR team, but the issue is the degree of influence these groups have on the strategic business decisions related to pricing and patents. Improving CSR is not just about throwing more money at charitable causes. The key change needed is to listen and to hear the warning signs.

'There is no doubt that the attitude of the industry towards CSR practices has improved but a lot of the damage is already done. Policies already proposed on pricing and intellectual property mean that no amount of further concessions or rearguard actions can save the industry from damage. What is important is that the lessons learned from this will stand the industry in better stead when considering its approaches to issues of social responsibility and reputation in the future,' he added.