MANAGING PHARMACEUTICAL BUSINESS WITH ETHICAL & CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN

Abstract

Corporate Social Responsibility (CSR) is a phenomenon that evolves from charity and stewardship principle reflects about business and society relationship over time. The concept of CSR entails unilaterally and voluntarily adoption of socio-environmental policies of good governance that accommodate socio-moral and ethical concerns. The underlying rational behind the concept of CSR is that, since the business rely on the society to operate and could not exist or prosper in isolation, therefore in recognition of dependence, the business is obliged for rendering mutual benefits to the community as well. CSR is a value added decision making process of identifying and meeting the needs and welfare based obligations of the internal and external (direct& indirect) stake holders. CSR is industry’s response to reassure society, community, population, customers, consumers, investors, and public administration that the business firms are sensitive to the socio- environment concerns, their managerial practices are transparent and meeting all criterion of good governance, they comply with government rules and their business practices are ethically and morally governed. Therefore, the concept today encompasses a wide range of CSR initiatives including: moral and ethical concerns, good governance, socially responsible investments and inventions, ensuring well being of the society including environment, care and respect for human rights and affirmative action to law so as to legitimize their work processes. The concept has wide range adaptability world over and none of the business across globe, baring Pakistan, can think to operate without integrating CSR in its corporate business agenda. , A glance over Pakistan’s business landscape one finds CSR at its very nascent stage of development and dismal record of its practices. In Pakistan the concept seems to be very slow in gaining grounds and today very few businesses stand out with v their vision of CSR beyond philanthropy and donations model. The irony of the fact is that even those multinational companies which have very promising record of CSR in their home countries have mostly failed to adhere their CSR related obligations in Pakistan. Some of the activities claimed in this regard are mostly restricted to philanthropic activities for humanitarian or religious reasons or with the aim of gaining tax rebate, marketing and promotion gains and public relations. Amongst the industries being criticized on having under performed in CSR sector in Pakistan does include Pharmaceutical sector that has otherwise very important role to play in increasing availability of medicines to the marginalized and underprivileged groups. The phenomenal relationship between pharmaceutical industry and the human life where business and the health interests run parallel, called for an in-depth investigation to measure true impact of CSR related obligations fulfilled by the pharmaceutical industry in Pakistan. Seeing the importance of CSR and critical relevance of many ethical concerns for the pharmaceutical industry the research earned added significance especially for country like Pakistan where:  People living below poverty line and illiteracy don’t have the purchasing power to buy drugs or make the informed choices. The consequences of non availability or non access to drugs are question of life and death.  Purchase of drug can not be left to the patient’s choice. Patients’ purchases of the medicines are based on the professional opinions of the doctors or the pharmacists. With this background in view the research was undertaken to unearth true perspective of CSR practices of the pharmaceutical industry in Pakistan with a view to formulate a proper response that is fully socially driven and leading to the ultimate well being of the society. Hence, the research study was aimed at exploring and describing the level of knowledge, degree of attitude and practices with regards to corporate social responsibilities and ethics being practiced by the pharmaceutical industry in Pakistan. The research revolved around the sources of information that included the strategic management of multi-national and national pharmaceutical firms operating in Khyber Pakhtunkha, work place management dealing with the work force, practicing doctors and chemists/ druggists. The main stay of research data was the information collected through three different set of questionnaires served to the management, medical practitioners and the chemists. The quantitative data obtained during the research was analyzed using the SPSS software package. The qualitative data received through open ended questions about the socially responsible practices, knowledge and attitude amongst the pharmaceutical firms was analyzed manually using the inductive content analysis method. The research analyses arrived at following finding that could be grouped as follows:  Strategic dimensions of CSR practices  Functional / tactical dimensions of CSR practices  Customer perspective about the CSR practices from the medical practitioners  Customer perspective about the CSR practices from the chemists & druggists A substantial number of the local pharmaceutical firms either don’t have written statement of their mission and / or vision or their mission / vision statement (if any) don’t integrate any aspect of CSR or ethical dimension. This speaks of the ignorance of their management about the basic management lesson that a clear and astute strategic vision / mission are prerequisite to effective strategic leadership and promising corporate performance. Without a clear and well articulated vision or mission the managers at all level have no prescription or road map to competitive advantage, no recipe for satisfying customers or inspiring employees. The importance of United Nations Global Compact and the principles it has laid down can not be over looked. The research revealed that hardly few multinationals and none of the national pharmaceutical firm is the signatories of UN Global Compact. This state of response is very alarming and indicates very low priority of the industry towards CSR in Pakistan. The research found that some of the pharmaceutical companies are committed to ethical, responsible, principled and patient focused marketing practices in line with the standards set by the governments. However, some of the companies are following unethical marketing practices like; advertising through famous medical journals through paid article to influence/ manipulate prescriptions by the physicians, to market directly to physicians and other healthcare providers (Physicians-targeted promotions), direct- to-consumer advertising, recruitment of physicians or sponsoring education of medical students, forward integration of retail pharmacies and stores etc. The research concludes that pharmaceutical industry’s marketing tactics like; doctors-targeted promotions or unethical recruitment of doctors, direct-to-consumer advertising, data manipulation or biased research trials etc are against the parameters of social responsibility. Doctors focused promotion or doctors’ recruitments etc are indirect ways of influencing doctors’ prescription patterns. The research finding suggests that the pharmaceutical firms’ financial influence on the doctors posing serious threats to the reliability of medical care and reputation / morality of the industry. The research finds that there is lot of room for improvement of clinical trials. There exist lot of grey areas like; transparency and fairness of research, human rights violations of the subjects placed under clinical trials, pre trials posting of trials criteria, publishing of post trial reports and making trial data and other information available to public etc. This results in to mistrust amongst the society, doctors and the patients on the accuracy and viii reliability of trials outcome. Though Pakistan’s Ministry of Health has already laid down rules to regulate clinical trials in its soil but these rules / procedure need further scrutiny in line with the rules and procedures designed by the World Health Organization. Community / Social Sector Development: After going through different set of findings above the research arrived at the conclusion that the most frequently addressed areas in community initiatives are in education, health and water & sanitation sectors. A lion share in these initiatives is owned by the multi nationals and a trivial part belongs to national firms. The salient features of these community development initiatives in Pakistan are:  Organizations are running schools, primary education schemes, educational trusts, scholarships, free dispensaries, health camps, hospital set-ups, tube wells and tankers to provide drinking water and sanitation projects etc.  The research did not encounter any initiative being taken by the Pakistan pharmaceutical industry to improve citizen rights or redress environmental deterioration.  The most important areas for sustainable development like technology research and human capacity building have the lowest priority. The research suggests that the government of Pakistan must design its National Pharmaceuticals Policy with the basic aim to ensure that people of Pakistan have free and fair access to good quality medicines at affordable price and at all times and spaces. The policy shall also ensure that the physicians, while treating their patients, are morally and legally bound to prescribe the minimum of required drugs –without any influence of the sponsoring firm. The policy shall set for creation of a Feaderal Precurement Agency (FPA) that should be the only body to channel all imports and production of pharmaceuticals. All the firms and health care sector shall obtain these medicines or the raw materials as per thyeir requirement from the FPA. The FPA shall relook the current practices in the pharmacuetical industry and realingened them as per the needs and bounds of Pakistani society. The research study also offers some recommendations to facilitate FPA work as follows:  Pharmaceutical firms operating in Pakistan, irrespective of their multinational or national status, shall craft or modify their vision, mission and strategic intent in line with the preview of CSR and business ethics.  The industry in its totality is advised to integrate the principles of UN global compact in their strategic and operational policy framework. Strategic integration of all of the ten principles of the UN Global Compact in to the firms’ corporate philosophy would definitely advance universal principles on human rights, labour, environment and anti-corruption drive.  All the firms shall ensure to have their exclusive code of conduct guiding for ethical practices at all level of their operation. The ethics code of conduct shall conform to national and international standards that are set by Pakistani government, UN Global compact, and other relevant bodies, institutions and the forums in this regards.  The industry shall ensure that engagements/ arrangements between physicians and the pharmaceutical companies are open and transparent, and shun ongoing culture of providing grand dinners, receptions and free food to doctors in conferences and symposia. Medical practitioners should adopt policy of rejecting gifts even those of nominal value and access of drug company representatives’ to students and health services should be limited to the need bases.  The firms shall modify their existing organizational structures and re-align their authority responsibility relationship in accordance with the dictates of the CSR and the code of ethics. The restructuring shall ensure horizontal and vertical coordination of CSR activities on one hand and reporting / communicating the outcome to the stakeholders on the other. There is also a dire need to create strategy supportive culture in the firms to achieve desired outcome.  Firms must fulfill their ethical and CSR obligations in welcoming marginalized people in firm’s ranks and file at appropriate cadres and shun away their prevailing discriminating practices in this regard.  Medicines promotion plans and practices shall be inconsonence with etical and CSR norms –taking care of stakeholders benefits -especially the patients.