Please note: This post was originally published on 10/12/07
A colleague pointed me to an article on the new plan launched by several pharmaceutical companies to take a “pay-for-performance” approach in countries where the healthcare system is government run. Because many healthcare systems abroad are state run, it’s easy for governments to squeeze pharmaceutical companies out of the country entirely.
This is exactly what happened when Johnson and Johnson introduced a blood cancer drug last year in the U.K . Officials made the proclamation that the drug was too expensive and did not warrant the strain it would put on the British healthcare system. In response, JnJ came up with an innovative scheme—we’ll pay you if the drug doesn’t work. Talk about accountability!
My first instinct upon reading this article was to applaud the prescription-drug industry for being bold enough to stand behind its products. Why should a patient (or government in this instance) be forced to pay for a drug that failed? The pessimists of the world will be quick to point out that this is nothing more than a calculated business decision on behalf of the pharma companies. Offering to pay back the government in the instances when a drug does not live up to its promise is certainly less of a revenue drain than getting entirely squeezed out of a market. True enough. But the fact remains that only a few companies have stepped up to the plate and taken responsibility for their product.
But of course, I then questioned how this move could potentially impact PR. My gut reaction was that the profit of the company would no longer depend on how people PERCEIVE the product anymore—it will be all about the reality of if it works or not. In essence, I wonder if this business model has the potential to cut out the middle man (i.e. PR)? Is the message still important if ultimately, the success is a clearly defined, cut and dry result?
After kicking it around a bit, I think the message is every bit as important, if not more. The part of me that worries about PR getting cut out of the process if more companies adopt the “pay-for-performance” business model is the part of my brain that still focuses on traditional media as the primary target of PR. In actuality, that model has long since fallen by the wayside. In this case, the public has broadened to include traditional media, emerging media, governments and customers. Despite the fact that consumers will ultimately determine the fate of the drug companies in this model, there are steps that can be taken to engage in the process.
In this new model, it will be imperative for drug companies to engage with the end consumer. This could mean providing a blog that discusses disease areas, or engaging via social media forums such as Twitter to discuss openly and honestly as much as regulatory bodies will allow. In short, public relations’ strategies will need to change course and focus at educating the public. In the end, this type of strategy does not cut out the middle man; it makes the middle man ever more important.
