CSR and big pharma: Pfizer's McKinnell says CEOs should take corporate social responsibility very seriously.
Hank McKinnell, chief executive of Pfizer and chairman of the Business Roundtable Business Roundtable (BRT), an association consisting of the chief executive officers of major U.S. corporations that was founded in 1972 through the merger of the three preexisting business organizations. , argues that CEOs are increasingly committed to social responsibility because it is linked to their profitability. Here are excerpts from a conversation originally conducted for The New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times:
Q: We've heard about corporate social responsibility for decades. Is something really changing?
What's changing is a recognition, at least among the larger companies, that we can't behave as if we had only one group of stakeholders, which are our shareholders. Obviously, they're still No. 1. But rather than being seen as part of the problem, there's increasingly a recognition that in health care and in the community, we have to be seen as part of the solution.
Q: You think the social and political environment around you affects your ability to make money?
If we're seen by the community as providing goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. that enable people to live a happy, long life, society will want us to succeed. Otherwise, society will hope that we will fail. If we continue to be disrespected, it makes us a target. People will say, "regulate them."
A Gallup survey asked the public about who they respected. Large organizations like mine came in very low. My view is that unless we rebuild public respect, regulation and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
When a person begins a civil lawsuit, the person enters into a process called litigation. will affect all aspects of our business.
Q: Is the perception problem one that all of corporate America faces or just the pharmaceutical industry?
The pharmaceutical industry is a little different. We have recognized that this is a major issue for us, regaining public trust and public appreciation. For politicians, bashing the pharmaceutical industry gains votes. We've done considerable research on this. We're starting to use what little legislative muscle we have to improve the situation by working on the Medicare prescription benefit package. Those people can now get access to the medicine they need.
Q: The pharmaceutical industry was highly respected a few years ago, but it seems to have lost ground. What happened?
One factor was our direct-to-consumer advertising direct-to-consumer advertising Drug industry The use of mass media–eg, TV, magazines, newspapers, to publicly promote drugs, medical devices or other products which, by law, require a prescription, which targets consumers, with the intent of having a Pt . We didn't do enough to strengthen and reinforce the importance of the doctor-patient relationship doctor-patient relationship,
n in-teraction between a physician and a patient. . It was a consequence of our success that we created visibility for products and many people in the public said, "That would be nice, but we can't afford it."
Q: Did you see the movie The Constant Gardener, which alieges that drug companies test products on unsuspecting Africans?
I saw it. It was a good movie. The cinematography cinematography: see motion picture photography.
Art and technology of motion-picture photography. It involves the composition of a scene, lighting of the set and actors, choice of cameras, camera angle, and integration of special was beautiful, but it had nothing to do with the real pharmaceutical industry.
Q: If you're concerned about your image, wouldn't the simplest thing be to lower prices?
Someone has to pay for the research. So there's a limit on what can be reduced. A better approach is to provide significant discounts and provide free drugs to those who need them. The next challenge is that we're going to have to do something about the more than 40 million Americans who don't have health insurance.
Q: So what is Pfizer doing in terms of social responsibility?
In 2004, we established the Infectious Diseases infectious diseases: see communicable diseases. Institute in Kampala, Uganda, with infection disease specialists from the U.S. and Canada. It targets HIV/AIDS HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome , malaria and tuberculosis. Basically, we train 350 doctors and 250 health care professionals from many African countries. They then go home and train others. This has enormous leverage in sub-Saharan Africa.
In South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , we decided to give away Diflucan, which is a medicine for fungal infections Fungal infections
Several thousand species of fungi have been described, but fewer than 100 are routinely associated with invasive diseases of humans. that a lot of patients with advanced HIV HIV (Human Immunodeficiency Virus), either of two closely related retroviruses that invade T-helper lymphocytes and are responsible for AIDS. There are two types of HIV: HIV-1 and HIV-2. HIV-1 is responsible for the vast majority of AIDS in the United States. suffer from. We decided to give it away for free. We're now doing that in 44 countries.
When it came to relief efforts for the Southeast Asian tsunami, we donated $10 million in cash and $40 million in medicines, and sent in experts on supply chains and water quality. That made a real difference in the aftermath.
Q: One other example you'd like to mention?
The one I'm most proud of is the Global Health Fellows program, in which volunteers from Pfizer serve up to six months in very difficult geographies working against HIV, TB and other diseases. We've sent out 92 fellows and we're sending the next blast. It's a great way to get our people to understand what's happening. They come back more motivated by what we do.
Q: And you met with President George W. Bush, along with executives from Citibank, General Electric, UPI UPI
United Press International and Xerox, to talk about earthquake relief in Pakistan.
Yes, the president called on five CEOs, including me, to help increase awareness of the magnitude of the disaster. His emphasis was that Pakistan is a friend in the war on terror This article is about U.S. actions, and those of other states, after September 11, 2001. For other conflicts, see Terrorism.
The War on Terror (also known as the War on Terrorism . The five companies set a goal of raising $100 million and we've raised $104 million, the last time I looked. We've distributed $5 million. We will now be engaging in the reconstruction of a large number of these schools and clinics. Hopefully, the people in Pakistan will appreciate it. If the international community had not stepped in, the door might have been opened for more radical Islamic influences.
Q: How much altogether does Ptizer give away?
Over $1 billion a year.
Q: And what percentage of your time, personally, is involved?
Between the Pakistan effort and the Infectious Diseases Institute in Uganda, which I chair, it's probably 5 percent to 10 percent of my time.
Q: Are these efforts improving the pharmaceutical industry's image?
A survey by Harris Interactive Harris Interactive (NASDAQ: HPOL) is an American market research company that specializes in public opinion research using both telephone and surveys on online panels. The company is the product of a 1996 merger between the Gordon S. Black Company and Louis Harris & Associates. in April 2005 showed a rise over the previous year in the number of people who say we are doing a "good job," to more than 50 percent.
Q: Will all these efforts have an impact on the public perception of CEOs in general?
The scandal and criminal misbehavior in the mid- and late 1990s hurt all of us. But I'm pretty sure the perception is moving up now. In Congress, there's a recognition of that. I'm disappointed in how long it's taking to bring some of the people to justice. Ultimately, this will be seen as a sad piece of business history that's past us.