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Drugmakers try to recast lagging image

Tired of seeing his profession beaten up, Eliot Ohlstein has stepped out of the laboratory and onto the front lines of a battle to save the drug industry's reputation.

His biggest weapon? Himself. The heart-drug researcher is appearing in a TV commercial meant to burnish the image of his employer, drugmaker GlaxoSmithKline. It is part of a broader, newly emerging public relations effort being waged by drugmakers.

"We save as many lives, if not more, than firemen and policemen -- millions, if not hundreds of millions, of people," Ohlstein said in an interview. "But I'm never in a situation where someone says, 'He works for a drug company,' and the room breaks into applause."

In fact, these days Ohlstein might get booed.

The chasm resonates loudly in Massachusetts, where the world's biggest drug companies, including Merck & Co. and Novartis AG, are hiring thousands as they open up laboratories to tap the region's medical brainpower.

What's driving a backlash against the industry is the high cost of drugs. Despite scoring key victories in Congress with a $534 billion, taxpayer-funded Medicare prescription benefit with no government price controls, the industry is being cast as a corporate villain by Republican and Democratic politicians alike. Members of both the House and Senate, as well as the governors of New Hampshire, Minnesota, and Wisconsin, are backing the importation of low-cost prescription drugs from Canada -- something the drug industry is fighting vigorously.

Federal investigations and lawsuits continue into alleged fraudulent pricing schemes, and some drug companies have paid huge fines. The trial of TAP Pharmaceutical Products got underway last month in US District Court in Boston, where current and former employees are accused of defrauding the government by bribing doctors, health plans, and hospitals to prescribe the company's drugs. While those cases unfold, Americans are experiencing rapid health-care cost hikes, with growth in drug costs leading the way with a 15.3 percent increase in 2002, according to government statistics.

With all that, the industry's reputation is declining. These makers of potentially lifesaving medicines find themselves just a few rankings higher than cigarette companies on a nationally recognized measure of public opinion produced by Harris Interactive Inc. On a scale of 1 to 10, pharmaceutical makers are in seventh place, having slipped from fifth place in 2002. (Tobacco is in 10th place.)

Just 29 percent of the public surveyed last year gave pharmaceutical companies a positive rating, while 49 percent viewed the industry negatively, said Joy Marie Sever, a Harris senior vice president and analyst of corporate reputation. She said the industry faces fundamental problems. In particular, consumers believe drug companies are putting profits before public health.

"Their products are not perceived to be a good value for the money -- they are too expensive," Sever said, "and there is a sense that they should be doing more to help people that need their products."

Indeed, the US drug industry is among the nation's most profitable, with profit margins consistently in the 20 percent range and as high as 30 percent for Merck & Co., according to the closely watched Fortune 500 list released last month.

But politicians and advocates have long complained that many people who lack prescription drug insurance coverage have trouble getting critical medications. The industry has estimated that 13 million Americans, most of them seniors, have no prescription drug coverage of any kind.

With the criticism on the rise in the last year or so, frustration runs deep from the drug industry's corporate office towers to its laboratories. In Massachusetts, the pharmaceutical industry employs about 12,000 workers and the biotechnology sector, which conducts drug research, employs another 30,000 -- numbers that are expected to grow, according to industry estimates.

During a recent tour at AstraZeneca's glistening, $150-million research laboratory in Waltham, Jeff Hanke, vice president for cancer research, lamented that the public thinks money is what drives many into his line of work.

"As a scientist, it worries me, because most of us go into this business because we feel this is the best place to truly impact disease," Hanke said. "We got into it for the right reason."

To improve its image, AstraZeneca is getting ready to follow GlaxoSmithKline's lead with corporate TV spots, but it won't release details.

"Given what's happened over the last couple of years, the industry has taken a hit," AstraZeneca US chief executive David R. Brennan said in a telephone interview. "We are looking to get out some of these messages about affordability, and access, and meaningful, lifesaving drugs."

Industry leaders issued dire warnings and an industrywide call to action at last month's annual meeting of the Washington-based Pharmaceutical Research and Manufacturers of America, the industry's main lobbying arm.

"Unless we restore faith and trust in our industry and what we do, we can never truly be successful," PhRMA's departing chairman, Wyeth chairman and chief executive Robert Essner, told the gathering.

PhRMA is planning to reinvigorate the industry's "patient assistance programs" by providing a simpler application form on its website for people with low incomes, who are eligible for free drugs direct from drug companies.

Pharmaceutical executives also believe the Medicare benefit is being unfairly defined by opponents of industry as a bad thing. As a countermeasure, PhRMA is coordinating an informational campaign about the Medicare prescription benefit; it says 80,000 pharmaceutical sales reps will be asked to deliver Medicare information brochures to physicians' offices across the country.

The Medicare benefit "has somehow been cast in a negative light in the political battle that is going on," Essner said in an interview. "It's been terribly misunderstood."

Pharmaceutical makers have sponsored corporate advertising before, including Pfizer Inc., now the world's largest drugmaker, and Novartis. Advertisements for those companies have focused on the production of lifesaving medicines.

What's new in the GlaxoSmithKline commercial is that it wades directly into controversial waters and attempts to answer criticism over pricing -- the hot-button issue in drug regulation. The commercial is paired with a 30-second spot that draws attention to GlaxoSmithKline's Orange Card, a corporate discount card for seniors who do not have health insurance.

Reaction to the advertising campaign illustrates how steep an incline the pharmaceutical industry must scale. The California-based AIDS Healthcare Foundation, for example, criticized GlaxoSmithKline's image-buffing effort, saying that the hundreds of millions the corporation spends on advertising would be better used on providing HIV medication to needy patients around the world. The foundation's president, Michael Weinstein, said all drug companies should recognize that helping people obtain medication is the best way to improve their public standing.

"They do various things to destroy their image as companies, and to put these drugs beyond the reach of many, many people," he said, "and then they run expensive slick ads to tell people they are really not that bad. It's a silly waste of money."

The GlaxoSmithKline commercials began airing in March on NBC's "Today" show and on "The Apprentice," a highly-rated prime-time show with Donald Trump.

The company would not say how much it is spending on its corporate advertisements. But the intent is clear -- to put a human face on drug research and industry arguments about the high cost of drugs.

Ohlstein, 49, is shown in his suburban Pennsylvania office with his electric guitar and schematic drawings of molecules. He said he was not paid any extra for his appearance in the ad.

Ohlstein tells viewers how long it took for him and his colleagues to develop Coreg, a drug that reduces blood pressure and makes the heart pump better. There are pictures of Ohlstein's son, first in diapers and then as a rollerblading teenager, to illustrate the 15-year period from initial discovery of the Coreg compound to market approval.

In the ad, Ohlstein says the cost of bringing a new drug to market is higher even than a space shuttle mission. A portion of profits from marketed drugs, he says, is rolled into new research "down the hall" into other diseases, such as Alzheimer's.

"Some people say drug research is too expensive," he says in the commercial. "I say it's worth every penny."

Christopher Rowland can be reached at crowland@globe.com. 

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