Recovering from a bad case of PR
Everyone agrees that Celebrex and Vioxx were great brands. They told a compelling story of how astute science brought relief to millions of patients. The competition between these two cox-2 brands simply added a bit of extra tension to the tale.
"From a pharmaceutical marketing perspective it was beautiful," admits Mike Rea, managing director of IdeaPharma, a pharmaceutical marketing firm. "This was a market waiting for a brand. The audience was sold something they didn't need but definitely really wanted. It was more than a side effect that all but killed the drugs."As far as branding is concerned, Vioxx and Celebrex both did a great job," Rea continues. "They both talked up the selectivity and how they avoided the side effects of other NSAIDS. The world believed that cox-2s were safer. And while they were talking about the GI [gastrointestinal] safety, they were not talking about the cardiovascular safety profile."According to Rea, the side effects profiles of the cox-2s were more or less the same as for older non-steroidal anti-inflammatory drugs (NSAIDS) -- only the incidence of severe side effects was lower. Furthermore, much cardiovascular safety data was also in the public domain. "But these were brands, not products," he says. "I reckon physicians would probably have still prescribed these products. I'm not sure the world was looking with open eyes."Merck and Pfizer's actions are something for the courts to decide. However, concerns about the cardiovascular safety of the cox-2s were being raised in medical publications as early as 2001. Rumors grew, concerns were voiced. Then on 30 September 2004, Merck announced that, following the analysis of three-year's worth of data in a post-marketing study, Vioxx would be voluntarily withdrawn worldwide.All hell broke out. Merck shares immediately plunged 30 percent. Other cox-2s fell under the spotlight. In December 2004 a clinical trial showed an increased risk in cardiovascular events for patients taking Pfizer's Celebrex, and the fear of a class effect from cox-2 products spread. The panic even reached non-cox-2 anti-inflammatory painkillers; trials were stopped because of a perceived increase in risk."This is one of the problems with branding," admits Jon Parton, global director of branding at pharmaceutical company AstraZeneca. "The pessimist says you shouldn't do global branding, because if it goes wrong it goes down big-style everywhere. But my belief is that you plan for success. If you have a problem you own up to it."This is a good lesson to learn, but a hard one to implement when it comes to the crunch. David Wood, chairman of Interbrand Wood Healthcare, a healthcare consultancy, says that the companies were understandably cautious in their reaction to the safety concerns. "They were slow at first. They seemed a bit more defensive, with companies assuring that their products didn't have the safety issues that were claimed. Then there appeared to be attempts to justify along the lines of 'We are doing all we can to ensure the safety of patients.' Announcements of withdrawals followed (Vioxx and then Bextra). It almost seemed as if companies were waiting to see what the competition was doing first before taking steps to withdraw."Of course, the decision to withdraw a product with annual sales of over $2 billion and a flagship brand is not made lightly or quickly. "These were enormously important, and profitable, products for each of these companies, each of which had been approved by the regulatory authorities, so quite understandably they were not going to be withdrawn easily nor without adequate evidence," says Wood."There is probably no ideal way to pull a product for safety reasons," Wood continues. "The product brand is probably scarred forever, and the corporate brand is obviously severely impacted as well. Clearly in this case Merck is continuing to suffer far more than Pfizer, since Bextra was only available through hospitals, and consequently was little known by the public at large, while Vioxx was a very high-visibility, 'public' brand."IdeaPharma's Rea believes that the situation could have been handled much better, however, and some of the corporate damage could have been avoided. "Merck acted more like Perrier did when traces of benzene were found in its water," he says. "First it denied everything, then had to keep backtracking. Sure, Merck was unlucky to have the more 'dangerous' drug, but it always seemed to be forced into communication. And the actual withdrawal was particularly badly handled?it was almost an admission of guilt in the first place." Companies should look like they are always in control. "The people who should know most about a drug is the manufacturer," Rea says. "[B]eing forced into the open by statements and data from others looks bad. Instead you need to be in front of the curve of knowledge. Pfizer seemed to be better at stating publicly the facts of research and being on the front foot by offering analyses. Pfizer seemed to know what was going on."AstraZeneca's Parton says that honesty and openness are the only options for long-term success. "If Pfizer or Merck are shown to have misled deliberately then no one will trust the company anymore, and that would affect all other brands. It is good business to be ethical. It is not in our interests to by sly and crooked. Otherwise you end up like Enron. We are not whiter than white, but being honest is best for business."Wood agrees and suggests that product brands should have a strategy for handling such events -- including their own withdrawal. His advice is to "be ready, have a plan, be open and honest, and reinforce the parent brand by being smart and responsible. Step one is to recognize that there is always the potential for issues because we work in a very difficult industry. And the fact is that no amount of clinical trial testing can truly and adequately simulate actual years in the marketplace. Also learn that safety is the number one issue for society and that is what corporate brands need to stand for. Safety and responsibility."This is the kind of situation in which whatever you've been saying about yourself, and having your corporate brand stand for, must be mirrored in your actions," Wood continues. "Merck has long held a reputation of strong ethical responsibility with its consumers and customers, represented by their 'people before profits' mantra.? However, their lack of fast action, and demonstrated commitment to doing the right thing, were doubtless seen to run counter to the kinds of statements they had been making about themselves."Rea also notes that Merck tended to respond to developments as Merck, whereas Celebrex often came out with Celebrex press statements. "By responding badly you affect how you go forward as a company. It is not just Vioxx but Merck that is damaged now. On the other hand Pfizer has lost Bextra and may lose Celebrex, but we probably won't lose Pfizer."Wood, in contrast, suggests that such major issues should be given adequate attention from top management. "The companies could probably have used their corporate brand and top management to much better effect. The standard in handling this kind of event was set by J&J and McNeil years ago during the Tylenol poisoning, when the chairman took personal responsibility, acted fast, and communicated openly and fully with all relevant constituencies. Unfortunately top management of both companies was largely silent on this occasion," he continues, referring to Merck and Pfizer.The advice all sounds obvious, really: good behavior gets results. But does it really make much difference? Rea admits that, as with a lot of branding, it is difficult to measure, but he does think that the contrasting situations of Pfizer and Merck today may stem from their handling of the cox-2 catastrophe. Appropriate and "on brand" behavior, even in a crisis, may be enough to make the difference between failure or survival. In this case, it may have influenced the FDA's decisions when it reviewed all the cox-2 data in February 2005. "The panel was very split. It is difficult to say that the final decision was due to a difference in the molecules or marketing, but it could be a bit of both," says Rea. "Not everyone agreed that the risk profile of Celebrex was okay to leave it on the market. But maybe Pfizer just looked a bit more credible and a few votes were swayed in its favor."Nevertheless, whether Merck or Pfizer comes out of this affair intact, it has had a devastating effect on the credibility of the pharmaceutical industry as a whole. No matter how well a pharma company manages its brand, chances are its reputation will still rank lower than most tobacco companies. "It's not just the responsibility of individual companies -- the industry as a whole must make a more concerted effort to not simply counter negative publicity, but to tell its story to a public that frankly knows very little about the realities of the [...] industry," states Wood. "We need to be careful about demonizing an industry, which, ultimately, is about improving and saving human lives. But the industry must start helping itself, and these recent events have served only to set it back."
"From a pharmaceutical marketing perspective it was beautiful," admits Mike Rea, managing director of IdeaPharma, a pharmaceutical marketing firm. "This was a market waiting for a brand. The audience was sold something they didn't need but definitely really wanted. It was more than a side effect that all but killed the drugs."As far as branding is concerned, Vioxx and Celebrex both did a great job," Rea continues. "They both talked up the selectivity and how they avoided the side effects of other NSAIDS. The world believed that cox-2s were safer. And while they were talking about the GI [gastrointestinal] safety, they were not talking about the cardiovascular safety profile."According to Rea, the side effects profiles of the cox-2s were more or less the same as for older non-steroidal anti-inflammatory drugs (NSAIDS) -- only the incidence of severe side effects was lower. Furthermore, much cardiovascular safety data was also in the public domain. "But these were brands, not products," he says. "I reckon physicians would probably have still prescribed these products. I'm not sure the world was looking with open eyes."Merck and Pfizer's actions are something for the courts to decide. However, concerns about the cardiovascular safety of the cox-2s were being raised in medical publications as early as 2001. Rumors grew, concerns were voiced. Then on 30 September 2004, Merck announced that, following the analysis of three-year's worth of data in a post-marketing study, Vioxx would be voluntarily withdrawn worldwide.All hell broke out. Merck shares immediately plunged 30 percent. Other cox-2s fell under the spotlight. In December 2004 a clinical trial showed an increased risk in cardiovascular events for patients taking Pfizer's Celebrex, and the fear of a class effect from cox-2 products spread. The panic even reached non-cox-2 anti-inflammatory painkillers; trials were stopped because of a perceived increase in risk."This is one of the problems with branding," admits Jon Parton, global director of branding at pharmaceutical company AstraZeneca. "The pessimist says you shouldn't do global branding, because if it goes wrong it goes down big-style everywhere. But my belief is that you plan for success. If you have a problem you own up to it."This is a good lesson to learn, but a hard one to implement when it comes to the crunch. David Wood, chairman of Interbrand Wood Healthcare, a healthcare consultancy, says that the companies were understandably cautious in their reaction to the safety concerns. "They were slow at first. They seemed a bit more defensive, with companies assuring that their products didn't have the safety issues that were claimed. Then there appeared to be attempts to justify along the lines of 'We are doing all we can to ensure the safety of patients.' Announcements of withdrawals followed (Vioxx and then Bextra). It almost seemed as if companies were waiting to see what the competition was doing first before taking steps to withdraw."Of course, the decision to withdraw a product with annual sales of over $2 billion and a flagship brand is not made lightly or quickly. "These were enormously important, and profitable, products for each of these companies, each of which had been approved by the regulatory authorities, so quite understandably they were not going to be withdrawn easily nor without adequate evidence," says Wood."There is probably no ideal way to pull a product for safety reasons," Wood continues. "The product brand is probably scarred forever, and the corporate brand is obviously severely impacted as well. Clearly in this case Merck is continuing to suffer far more than Pfizer, since Bextra was only available through hospitals, and consequently was little known by the public at large, while Vioxx was a very high-visibility, 'public' brand."IdeaPharma's Rea believes that the situation could have been handled much better, however, and some of the corporate damage could have been avoided. "Merck acted more like Perrier did when traces of benzene were found in its water," he says. "First it denied everything, then had to keep backtracking. Sure, Merck was unlucky to have the more 'dangerous' drug, but it always seemed to be forced into communication. And the actual withdrawal was particularly badly handled?it was almost an admission of guilt in the first place." Companies should look like they are always in control. "The people who should know most about a drug is the manufacturer," Rea says. "[B]eing forced into the open by statements and data from others looks bad. Instead you need to be in front of the curve of knowledge. Pfizer seemed to be better at stating publicly the facts of research and being on the front foot by offering analyses. Pfizer seemed to know what was going on."AstraZeneca's Parton says that honesty and openness are the only options for long-term success. "If Pfizer or Merck are shown to have misled deliberately then no one will trust the company anymore, and that would affect all other brands. It is good business to be ethical. It is not in our interests to by sly and crooked. Otherwise you end up like Enron. We are not whiter than white, but being honest is best for business."Wood agrees and suggests that product brands should have a strategy for handling such events -- including their own withdrawal. His advice is to "be ready, have a plan, be open and honest, and reinforce the parent brand by being smart and responsible. Step one is to recognize that there is always the potential for issues because we work in a very difficult industry. And the fact is that no amount of clinical trial testing can truly and adequately simulate actual years in the marketplace. Also learn that safety is the number one issue for society and that is what corporate brands need to stand for. Safety and responsibility."This is the kind of situation in which whatever you've been saying about yourself, and having your corporate brand stand for, must be mirrored in your actions," Wood continues. "Merck has long held a reputation of strong ethical responsibility with its consumers and customers, represented by their 'people before profits' mantra.? However, their lack of fast action, and demonstrated commitment to doing the right thing, were doubtless seen to run counter to the kinds of statements they had been making about themselves."Rea also notes that Merck tended to respond to developments as Merck, whereas Celebrex often came out with Celebrex press statements. "By responding badly you affect how you go forward as a company. It is not just Vioxx but Merck that is damaged now. On the other hand Pfizer has lost Bextra and may lose Celebrex, but we probably won't lose Pfizer."Wood, in contrast, suggests that such major issues should be given adequate attention from top management. "The companies could probably have used their corporate brand and top management to much better effect. The standard in handling this kind of event was set by J&J and McNeil years ago during the Tylenol poisoning, when the chairman took personal responsibility, acted fast, and communicated openly and fully with all relevant constituencies. Unfortunately top management of both companies was largely silent on this occasion," he continues, referring to Merck and Pfizer.The advice all sounds obvious, really: good behavior gets results. But does it really make much difference? Rea admits that, as with a lot of branding, it is difficult to measure, but he does think that the contrasting situations of Pfizer and Merck today may stem from their handling of the cox-2 catastrophe. Appropriate and "on brand" behavior, even in a crisis, may be enough to make the difference between failure or survival. In this case, it may have influenced the FDA's decisions when it reviewed all the cox-2 data in February 2005. "The panel was very split. It is difficult to say that the final decision was due to a difference in the molecules or marketing, but it could be a bit of both," says Rea. "Not everyone agreed that the risk profile of Celebrex was okay to leave it on the market. But maybe Pfizer just looked a bit more credible and a few votes were swayed in its favor."Nevertheless, whether Merck or Pfizer comes out of this affair intact, it has had a devastating effect on the credibility of the pharmaceutical industry as a whole. No matter how well a pharma company manages its brand, chances are its reputation will still rank lower than most tobacco companies. "It's not just the responsibility of individual companies -- the industry as a whole must make a more concerted effort to not simply counter negative publicity, but to tell its story to a public that frankly knows very little about the realities of the [...] industry," states Wood. "We need to be careful about demonizing an industry, which, ultimately, is about improving and saving human lives. But the industry must start helping itself, and these recent events have served only to set it back."
posted by Chris Placitella at 11:08 AM
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