Two examples emerged in the last few days to indicate that Big Pharma’s CEOs are unable or unwilling to control the functional departments of their companies. The first involves GlaxoSmithKline (GSK) where CEO J.P. Garnier actually instigated the problem instead of managing it.
In response to major controversy and an FDA advisory committee hearing over the safety of GSK’s diabetes drug, Avandia, Garnier launched a George Bush/Karl Rove style of PR blitz. The campaign started by blithely ignoring the empirical reality of three separate studies (by Steven Nissen in The New England Journal, GSK itself and the FDA staff) that found Avandia raised the risk of myocardial infarction by 30%-40%. Instead GSK cried that it was a political victim. In a self-righteous and self-pitying display, the company’s US Pharmaceuticals president, Chris Viehbacher claimed on June 15, "In the end science will win." Then on July 9 the company’s media relations people arranged for Garnier to give the Wall Street Journal the benefit of his successful experience at managing
through crisis. There we learned his battle tested lessons such as “fight data with data,” communicate with employees daily, and other drivel to the effect that a dog has four legs.
But the pièce d’occasion was Garnier’s micromanagement of his PR
department to place a puff piece interview with him in The Economist of
August 2. The British magazine’s interview was more typical of the
vanity profiles in Pharmaceutical Executive or the other, industry
publications than straight journalism. The Economist touted Garnier’s
of Avandia,” a characterization made despite a
nearly 25% drop of Avandia sales and a 14% decline in GSK stock since
Nissen’s NEJM article in May. “He came out swinging,” gushed the UK
rag, “accusing critics of politicising the regulation of drugs and
rebutting the study’s claims with his firm’s own data [that wasn’t
appreciably different than Nissen’s].” At least one of the writers or
editors involved in that arranged piece of claptrap must have been
positively heroic in suppressing the gag reflex when Garnier declared,
“My generation of chief executives is the first that ‘gets it,’ ” Gets
it? Gets what? Gets a $200 million termination bonus after
substantially reducing the company’s capitalization?
For a week or so GSK even supported the PR offensive with an increase
of in-person sales calls. Alas, objective reality eventually
intruded on August 13 when the London Telegraph reported the company’s
intention to cut
the sales force and other promotions in light of
Avandia’s inexorable slide.
After Garnier’s bluster and his all-hands-on-deck approach to
reviving Avandia, his maniacal bragging, followed by sudden
capitulation, make Pharma execs look like Muammar Qaddafi, Saddam
Hussein and other tinhorn dictators from the Middle East. First there
are rants about “the mother of all battles,” then a complete rout
followed by an abrupt flight. Honestly, can investors, regulators or
the general public take these clowns seriously.
After GSK’s PR ‘roid rage, Johnson & Johnson’s PR appeared to
be in a stupor when its lawyers decided to sue
the American Red Cross
for using the emblematic, red bisect. In his commentary John Mack
cited my own piece here last week about the current ascendancy of
lawyers in Pharma. Both the GSK and the J&J cases exhibit a clear
lack of corporate leadership. A fundamental element of corporate
leadership involves resolving the conflicts of functional departments
and getting them to operate in a manner that advances the
organization’s fundamental interests. At times the legal counsel, PR,
finance, marketing, sales, government affairs or clinical research can
each get carried away with itself and, in so doing, create problems.
Either the CEO or COO must harmonize them. When one department falls
asleep at its desk and allows another to seriously jeopardize the
company’s public image, it is the CEO’s responsibility to awaken the
one and slap down the other. Of course when the CEO’s narcissistic ego
and arrogance create such an imbalance, there’s no one left to restore
the equilibrium or provide the wise overview. Management must tread a
fine line between presumptuousness and self-effacement. Sadly, Pharma
leadership today is so unbalanced by shortsighted greed and lack of
vision that it seems incapable of walking such a line, preferring
instead to trudge along with one foot on either side.