Ethical Performance
inside intelligence for responsible business


‘Philanthropy fatigue’ cuts into drug sector reputation

October 2008

Public attitudes are hardening against the pharmaceutical industry, a study by a Geneva-based agency suggests.

Research by Covalence has found the industry has dropped from first to third in its annualized ranking of ten industries’ ethical reputations, which is compiled by measuring the positive and negative media and online coverage of companies.

Covalence believes a significant reason for this ‘flattening of ethical reputation’ has been the onset in the past year of ‘philanthropy fatigue’, with journalists, broadcasters and compilers of non-governmental organizations’ websites becoming inured to the social value of drug donation campaigns. ‘Media coverage of drug donations has reduced lately [and] such stories seem to have lost part of their news worth’, it concludes.

Media coverage of risks from pharmaceutical products has further eroded confidence and there has also been a rash of lawsuits, class actions, fines and concerns about a number of drugs, among them CellCept, Paxil, Trovan/Kano, Vioxx, Vytorin and Zyprexa.

A further factor, according to Covalence, is that pharma businesses are generally more effective at tackling social issues – and, given today’s preoccupation with climate change and green issues, ‘showing their positive contributions to society is [therefore] difficult’.

The industry remained relatively high in the ranking because the overall assessment is based on several years’ figures. However, the sector did badly in the year to July 2008, when it ranked eighth out of ten. ‘This raises questions about the future of the industry’s public reputation and its global licence to operate,’ Covalence says.

The highest-ranked industry sector is now automobiles and parts, which received considerable positive media coverage during the year for tackling environmental issues. The technology and hardware sector was second in the ranking.

Covalence | Global | Reputational Risk

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