Peter Claude underscored the fact that, although the industry has insisted that its pricing is necessary to support R&D, only 14 percent of the public had an accurate idea of how much it costs to develop new drugs. “What that says is that the industry is talking, but the public isn’t listening,” he said.

And he suggests that that is the fundamental reason why it is so important to improve the reputation of the industry - so that people will start to pay more attention.

Also troubling was that 97 percent of the consumers surveyed thought that the share of health care costs related to prescription drugs was vastly higher than it was. “Our hypothesis is that this disconnect is because consumers bear more of that cost directly on a day-to-day basis,” Claude said. “This creates an issue with the payers over reimbursement. It also drives public reaction to pharmaceutical prices, assuming that it must be taking away from the hospitals. And no one is listening to the value proposition - that if you take your hypertension or cholesterol drugs you can defer 30,000 or 50,000 heart attacks and the accompanying quality of life effects.”

Claude also noted a more fundamental discrepancy between the industry and the public in the definition of progress. “The public tends to have a more simplistic view of innovation. They use words like cure, while the pharmaceutical companies have a broader definition. They know that having a statin that will not be metabolized in the liver but in the small intestine is real innovation. The public looks at it as just another statin, whereas the medical community will say, you know, I have this patient who has liver issues and high cholesterol, and now I can give him something to treat his condition. Or an injectable becomes a once-daily pill, which improves compliance and quality of life.

“It is a difficult topic to get across to the public that finding cures per se is not necessarily in the job description. Industry has been focused on the chemistry, whereas the biology of disease, which may ultimately suggest a cure, is still unknown. How do you make a tumor actually go away? How do you cure diabetes? This is still extremely difficult.”

“People tend to expect medicines that can treat all patients, but the reality is that the process of drug discovery is more evolutionary than revolutionary,” said Tauzin.

“Issues with certain drugs, issues with the price disparities between the US and Canada obviously have not helped public perception,” Peter Claude added, “which may skew some of these statistics toward the negative. People look at Canada and say you’re just trying to preserve your profits while charging us high prices, when the actual level of the burden as percentage of health care costs is not as high as they think. It is also true that Americans are bearing an inordinate percentage of the cost of research and development because the rest of the world has imposed price controls in different forms.”

But, according to Claude, the biggest eye-opener was the influence of reputation on the overall sustainability of the industry. Among the general public, almost 80 percent said that a company’s reputation was important to them when deciding whether or not to use a new drug. The industry’s general assumption had been that, for prescription pharmaceuticals, an individual company’s brand identity and image was not an important factor.

“The pharmaceutical industry is like no other,” Claude explained. “People look to it for help in deferring their own mortality. It has a role in our lives almost no other industry has.”

Claude suggested that part of the current misconception stems from the industry’s tremendous success, which led to pressure from the investing public and Wall Street to continue double-digit growth. But in recent years, pharma’s fall from grace had been so severe that executives began to worry about whiplash. “There once was a time when PhRMA had a great deal of influence in Washington,” Claude said. “It became difficult for them to gain access to power, because no one wanted to be associated with them.”

“As a former member of Congress, I can tell you, there was a hardening of attitude toward the industry,” Tauzin added. There were more and more pressures to pass legislation such as foreign drug importation and a great deal of political animosity growing. You could see it in state legislatures. You could see it in initiatives that were being offered, all of which were designed around the notion that the industry had lost its connection to patients and was now just another set of entities connected to Wall Street. That was a poisonous atmosphere in which bad policy decisions were being contempla”

Negative perceptions also threatened to deter consumers from participating in clinical trials, prevent doctors from deciding to prescribe certain products, and spur payers to decline reimbursement for them.

The most severe signs of damage from the industry’s loss of reputation were its growing vulnerability to government price controls and increased regulatory control over its products, which struck to the heart of its business model.

After January 2006, the industry was, for many, epitomized by an actor on television throwing a football through a target to promote an erectile dysfunction drug. Since that time, PhRMA’s new face has been talk show host Montel Williams, touring the nation on behalf of the Partnership for Prescription Assistance. That effort to provide help for those unable to afford the cost of their prescriptions was the brainchild of a special working group within the industry, embraced by Tauzin and PhRMA.

“Direct-to-consumer advertising established a direct relationship with patients,” Tauzin explained. “We established a new contact point, which, unfortunately, created a lot of the bad feeling about the industry. Without the PPA program as an ancillary to this direct relationship with patients, the only thing people heard was that we had these great new products ?and, by the way, they’re pretty expensive. We did not have that second message - that if you cannot afford this new product, we will help you gain access to it. It looked like we were simply pushing that expensive product, without having the heart or conscience enough to recognize that there were people who could not afford them.”

For Tauzin, the solution was obvious: “We had to focus on that contact point between the American people and the industry on television. We not only had to have the PPA, but we needed to make it much more conspicuous.”

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