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April 18, 2017

Biopharmaceutical crisis management

Written by Investis Digital

Benjamin Franklin said it long before corporate communications crises hit the modern world: "Failing to plan is planning to fail."

According to the Institute for Crisis Management (ICM), half of organizations worldwide lack a crisis plan, and those without a plan will fail within two years of a major crisis. And in such a highly regulated industry, biopharmaceutical crisis management should be a critical part of every drug and health care company's communication strategy.


While the failure rate is, perhaps, surprising, it's also easy to see how crisis planning could get lost in the shuffle amid the regulatory reviews, product launches, investor communications and myriad other responsibilities that make up your communication department's workload. However, with pharmaceuticals and health care listed on ICM's top-ten most crisis-prone industries, it's time to prioritize biopharmaceutical crisis management. In this high-profile, regulated industry, it's possible for a range of crises to occur — drug shortages, unknown side effects, contamination, pricing issues and FDA-related challenges — and your company's swift and strategic response is critical when it comes to mitigating user or patient impact and brand damage while preserving investor relations and the bottom line.

If your organization is among the 50 percent without a crisis plan, here's what you need to know to develop and implement an effective crisis management strategy. 

Understanding the anatomy of biopharmaceutical crisis management 

In recent years, a number of high profile crises have landed in media headlines as pharmaceutical companies have struggled with issues ranging from tampering to pricing concerns. In the face of such crises, many have failed to employ a streamlined, multi-channel crisis communications strategy, and, as a result, numerous organizations have faced a major media backlash and have lost consumer trust. In fact, the Edelman 2016 Trust Barometer shows that just 53 percent of the public trusts drug companies.


In a gold standard of crisis communication, Johnson & Johnson faced a devastating case of tampering with Tylenol that left several people dead in 1982. While Johnson & Johnson played no part in the tampering (it is believed the Tylenol was tampered with while already on store shelves), the company reacted swiftly with multi-channel communications, media and regulatory cooperation, product recalls, empathy for victims, and the introduction of tamper-proof packaging within six months. Today, this case study is still taught as a cornerstone example of effective, multi-channel crisis response around the globe. Meanwhile, Johnson & Johnson ranks among the top 20 most admired companies on Fortune's 2017 list, in part due to its commitment to effective crisis communication throughout its operations.


While the Johnson & Johnson case study is from an arguably simpler time, before the proliferation of digital communication channels, pharmaceutical companies can still learn a number of valuable lessons from this example. 

1. Form a crisis team 

Establish a crisis team before you have an incident, and ensure that everyone has defined roles and responsibilities. An effective crisis team should include representation from your C-suite, your PR, legal, product and sales teams and individuals who coordinate communication with investors, regulators, doctors, and insurance companies. Choose experienced individuals who understand the broader context of the industry so they're able to put a crisis into context and respond effectively. When a crisis does arise, have a clear process for activating the team to conduct steps such as performing a situational analysis, interfacing with regulators, communicating with the public and more. Have a handful of trained, vetted spokespeople available that can be briefed quickly and who can deliver a clear, streamlined message. 

2. Educate your employees 

Whether you're communicating with your employees, your investors or the public, developing and communicating a clear, consistent message is critical. To help maintain consistency across your organization, provide messaging training to all your employees and make sure they are clear on what has happened and how the company is responding. Creating a secure, centralized repository of supporting documents (including approved communications materials) that all your employees can access can help keep them updated, which, in turn, can help you ensure that everyone in your organization is communicating the same message. 

3. Leverage technology tools and digital communication channels for a coordinated response

When crisis strikes, the best communication plan is almost always transparent and proactive, utilizing the right technology tools in your crisis management arsenal to help you keep a pulse on the latest information so you can respond swiftly and effectively. A coordinated, multi-channel response that includes digital channels such as press releases, social media outreach, and website updates can help you make sure that a cohesive message is disseminated widely and efficiently. Examples include:

  • Leverage social media monitoring tools to better understand public response and sentiment regarding evolving events.
  • Use digital asset management (DAM) tools to provide your crisis team with the latest versions of shared documents.
  • Create an intranet for streamlined communications with employees and internal stakeholders.
  • Build a public-facing news portal that houses official responses that can be easily accessed by investors, the media, analysts and regulatory contacts.
  • Consider using interactive technology, such as a webcast with a live Q&A forum, to reach your investors. Be sure to archive any webcasts on the IR section of your corporate website.

4. Work with a trusted partner 

In a crisis, the stakes are particularly high for pharmaceutical companies. A crisis can have a negative impact on the lives and health of patients — and can expose the company to serious legal, regulatory and financial consequences. Many pharma companies, however, simply don't have the in-house expertise and bandwidth to deal with a crisis. If you're running a lean team and lack the necessary time to plan for and manage a crisis, consult with a trusted crisis communications partner. Choose a partner that understands your business, has an established reputation for effective crisis management across channels, and will focus on an integrated strategy that mitigates damage to investors, doctors, the public and patients.

Liz Alton writes about technology, marketing and business for enterprise audiences. She's a Forbes contributor and her writing has been published in Inc., USA Today, Entrepreneur, the Huffington Post, Mic, Harvard Business Review blogs and the WSJ. She holds an MBA and a BA in journalism, and is completing a masters in Journalism at Harvard.

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