A global outlook: government affairs and policy

Merck KGaA, Darmstadt, Germany’s Lynn Taylor talked to pharmaphorum about the challenges facing the government affairs and policy function, from pricing challenges, to the reputation of pharma, and the Chinese social credit system.

While many in pharma try to describe issues such as the focus on pricing and the lack of trust in pharma as potential opportunities, Merck KGaA, Darmstadt, Germany’s senior vice president, head of global healthcare government and public affairs and head of corporate and government relations USA is quite clear that these developments require companies to adapt the pharma business model.

With the business under scrutiny globally over pricing and other issues, ensuring that the industry has a productive relationship with governments across the world is becoming increasingly important, according to Taylor.

In an interview with pharmaphorum, Taylor said that the role of the government affairs and policy team is now more vital as the industry tries to work with a range of external stakeholders to ensure that drugs and treatments reach patients.

According to Taylor, this requires the function to work closely not only with players such as governments, payers, trade organisations, and patient groups, but also internally with other functions in the company such as market access.

The goal is to bring together all parties and develop policies that meet the needs of patients, government and industry.

Taylor said: “How I view the function is first and foremost as a business partner. We are both an internally focused and an externally facing function. It is a full business partner to any business strategy.

“The purpose of the function is not only to build reputation and value in the external marketplace through visibility, but also to shape public policy through these relationships to support our business, and most importantly the patients that we bring medicines to.”

Working with franchises

Over time the work of the government affairs and policy function has become more closely aligned with other areas of the business.

There are joint projects, with joint goals, and joint objectives to ensure there is a streamlined approach to their execution.

Learnings from the externally facing part of the function are transferred to projects such as product launches, at global and country level.

A recent example has been the launch of Merck’s Mavenclad (cladribine) multiple sclerosis pill.

“We ensure launch plans have robust strategies and means of execution at global, regional and local levels,” said Taylor.

She added: “We have a responsibility to understand the access environment, the political environment and the social landscape in these markets. We need to work with business partners to design a strategy to make sure the products get to patients.”

The work begins a long time before product launch however, with the team becoming involved during the drug development process as early as phase 2.

It helps inform the shape of the product, and how it will be targeted to best meet the needs of the patient, as well as appeal to payers. This involves close working with disciplines like market access.

“This extends really throughout the R&D life cycle,” said Taylor. “We are putting in place more systematic approaches that bring the patient voice and policy insights into our programme development.”

Developing global policy positions

Company policies are not just product specific. They also apply to wider social issues that are relevant to the company’s work, tying in with the goal of ensuring the company is seen as a trusted partner in a wide range of organisations at a global level.

Taylor noted Merck’s products treat diseases that have a disproportionate impact on women, and as such the company has championed their cause in the workplace.

She said: “Through an innovative public private partnership with the Asia-Pacific Economic Cooperation (APEC) we developed a platform called Healthy Women, Healthy Economies. And in partnership with all of the APEC member economies, we developed a policy toolkit that governments and the private sector can use to benchmark evidence-based policies and best practices that best enable women to enter, thrive and rise in the workforce. We know that when women can participate at their optimum level, not only are they going to benefit, but their families, communities, and the overall economy will as well. We have had tremendous success.”

According to Taylor, the work has extended to liaising with an oft-overlooked group of stakeholders – the carers who play such a key role supporting patients.

“We identified a great need to not just focus on our patients, but the carers that surround our patients. Supporting them throughout their journey is a growing public health problem. We established a partnership with leading global, regional and some country-specific carer organisations to establish a global movement that recognises the pivotal role of carers in the healthcare system – Embracing Carers.”

Overall this work is a “critical part” of the company’s “mission and ambition,” according to Taylor.

And all this means far more work with other business functions – a siloed approach simply will not work if the company is to make progress and work harmoniously with its external partners, according to Taylor.

“Certainly, at a country level but also at a global level there is a need for functions to work more closely together, and this is a critical aspect as we look to the future.”

China challenges

Certain geographic areas have their own challenges – and Taylor admits that public distrust of pharma is still an issue.

Doing business in certain territories will in the future be affected even more by the external perception of a company’s behaviour.

No more so than in China, where some pharma companies have come under scrutiny in past years in a series of bribery scandals.

Taylor said that being a good “corporate citizen” will be increasingly important as it adopts its “social credit” system, a government-backed scheme that rates the performance of companies and individuals and determines the opportunities they are given – or denied – on the basis of their score.

It’s unclear how the system will apply to companies, Taylor said. There are already reports from pilot schemes that individuals have been fast-tracked to the front of doctors’ queues because of a good rating or denied plane flights because of perceived transgressions.

According to the reports, individuals have seen their score suffer because of personal choices such as long hours playing video games, or seen their score increase because of taking part in family activities.

Quite how the Chinese authorities will decide to rate companies is unclear, but Merck is watching closely to see how the situation develops, said Taylor.

However, there is potential for it to influence many areas of a company’s activity, such as recruitment of staff.

Taylor said: “The social credit system is just being instituted. We are trying to understand how it is going to work and how it is going to impact the company. We potentially have a government that is coming up with a mechanism to rate the company’s behaviour, not just holistically, but individuals in the company, and will increase or reduce advantages for a company based on this score - this may or may not be transparent.

“How do we live with an evolving government, an evolving view of the role of the private sector and our obligations to be good corporate citizens? How will a corporate citizen be defined and how will we be allowed to function in the market place?

“This is an area where we are still tracking it and identifying ways we can ensure success and prosperity in an evolving world and a social credit system in China.”

Global debate on pricing

Whilst not every country will take this extreme approach, the ongoing focus on pricing in the rest of the world will continue and will influence activities of pharma policy teams for the foreseeable future.

Taylor said “The debate in the US is not unique, it really is a worldwide debate. Many countries are looking at the topic of drug pricing. It is all inter-related.”

With pricing now a global issue, policy teams will be expected to deal with the issue on a global basis, instead of focusing on particular hotspots where pricing is a vexed issue.

Teams will have to be able to be aware of how pricing decisions in one country may affect another, according to Taylor.

“Our role is to be part of the dialogue across boundaries,” she concluded.

ABOUT THE INTERVIEWEE

Lynn Taylor is an accomplished global corporate affairs executive, bringing over twenty years of experience in the healthcare industry.  She is an experienced and dynamic leader, known for effectively navigating and succeeding in the corporate, trade association, policy, advocacy, and political realms.  Lynn has a passion and proven track record for building, transforming, inspiring, and leading teams on a global basis to bring value to patients, governments, civil society, and business.

Lynn serves as Head of Healthcare Global Government & Public Affairs and Head of Corporate & Government Relations, USA.  In her role as Head of Healthcare Global Government & Public Affairs, Lynn positions the healthcare sector as the partner of choice to ensure new medicines are brought to patients around the world to help create, improve and prolong life.  Lynn and her team work on a global basis to shape government public policies, enhance the company’s reputation and build relations and partnerships with key external stakeholders, including with patient groups and professional societies.

Lynn joined the company in 2005 as Executive Director of US Government Relations, became Vice President of US Government Affairs and Head of the Washington, DC Office in 2006, and assumed the role of Senior Vice President and Head of Global Government Affairs and Policy for the Healthcare sector in 2013.

Lynn joined the biopharmaceutical industry in 1997. She began her industry career in the field of health outcomes research working at MEDTAP International (currently UBC – An Express Scripts Company). She then took a variety of roles of increasing scope and responsibility in the areas of strategy, health policy, and government relations at the Pharmaceutical Research and Manufacturers of America (PhRMA), DEKA Research and Development, and Millennium Pharmaceuticals (currently Millennium: The Takeda Oncology Company).

Lynn serves as Chairman of the German American Business Council (GABC) of Washington, DC.  Lynn is also a member of the Board of Governors of the Bryce Harlow Foundation and the Board of Directors of Healthy Women.