Pharmaceuticals & the Poor

“Just another corporate easing their conscience & buying charity silence?”

May 10, 2013. London, United Kingdom.

One of the world’s biggest pharmaceutical companies and a global charity has announced a 5 year partnership worth more than £15 million. The two organisations are seemingly unlikely partners, given that Save the Children was one of a number of organisations who have campaigned heavily against GSK in recent years to lower their drug prices for developing countries. So what has made the partnership work? Is this green washing or is there a strategic and innovative corporate/social partnership example that we can all learn from? 

The partnership is a brave move for a charity with a credible and global portfolio of projects around the world. But it is also a clever one. Likewise, GSK have chosen their causal-marketing bedfellow well. Both have had time to consider what large scale partnership would look and feel like, having worked collaboratively on local partnerships in Africa for nearly 8 years. So taking the relationship to the next level hasn’t been the corporate equivalent of eloping in Vegas for the sake of publicity. These two have courted and campaigned and come to a mutually beneficial commitment that is both commercially clever and genuinely life changing.

The partnership will involve the training, resourcing and employment of thousands of much needed rural health workers. It will also involve product development and innovation of GSK’s existing pharma products to meet specific and life-saving needs in developing countries. The partnership will heavily focus on the delivery and provision of preventative vaccines to some of the poorest communities, initially in Kenya and the Democratic Republic of Congo, but eventually throughout sub-Saharan Africa, Latin America and Asia. The overall aim is to save the lives of over a million children who would otherwise die of preventative illness.

So what do each of these partners look to gain from such a lucrative association?

For GSK, there is a clear commercial advantage from being a first-mover in the field of large scale pharmaceutical philanthropy. Whilst they aren’t the first to give to charity or even partner with charity in their commercial space, the nature of their partnership and commitment will give them a definite advantage. GSK have drawn a line in the sand for how their business will now operate and are seeking to transform the nature of their commercial legacy in the world. The gravity of such a decision can’t be underestimated and we need to acknowledge that the lives of millions of people will be genuinely impacted by this decision. But for GSK, their presence and provision to so many emerging markets will build brand loyalty, association and a corporate reputation better than anything even the best advertising campaigns could offer. The potential future sales revenue in these emerging markets is a commercially advantageous goal to pursue and certainly one that has undoubtedly been considered, albeit alongside the altruistic motivation for their decision to partner with Save the Children. And why not? If a company can do good as well as do good business should we not applaud genuine and deeply rooted corporate social responsibility and philanthropic innovation? In a statement to announce the partnership GSK have said that a key element of the partnership is “Developing a blueprint for how businesses can deliver better social outcomes by engaging with health and development issues and pursuing joint advocacy efforts to ensure a focus on children’s health and wellbeing are maintained in global health policy discussions.”

The decision for GSK to be involved has come with the assertion that their own staff will be a vital ingredient in creating this new legacy for their company. They have encouraged their staff to raise at least £1million a year for the partnership. The engagement of their staff to increase and create discretionary effort for GSK’s overall productivity as a competitive and increasingly successful company is a smart move for their human resources aspirations as well as retention of talented and skilled workforce.

What does the partnership mean for Save The Children?

Save the Children have now become part of an exclusive club of charities that have engineered and negotiated high profile associations with multi-national companies. Most notably is the well-known example of ‘one pack = one vaccine’ by Pampers and UNICEF – an example that quite literally destroyed the commercial competition in that space, but also delivered millions of vaccines through the work of UNICEF.

Working in this high profile charity league will bring increased scrutiny for the charity of their policies and practice and indeed even their value for money. Save The Children have no doubt considered this, and to their credit have demonstrated effective fiscal transparency for some time now. But the association will potentially open new funding streams too. Corporates (justifiably in many situations) will view Save the Children as a charity that can ‘play with the big boys’ and perhaps feel safer about engaging in a corporate relationship with them too.

Such a large commitment of support will also bring a new scale of operations in the charity’s service delivery at a local level. Governance, policy implementation and missional values will need to be managed on an increasingly effective and much larger scale than perhaps they are presently used to operating. But this will also bring an increased capacity amongst staff and supporters that will serve them well for future project development. Save The Children have even been given a place on the board of GSK’s R&D unit, which gives the charity a rare and privileged opportunity to directly impact the direction of the company’s product development over the coming years.

It will be interesting to watch the nature and tone of Save the Children’s campaigning to see if there is any evolving change in tone and tenacity when it comes to issues that are impacted by companies like GSK. Save the Children were considerably vociferous in their campaigning against GSK around issues of provision and pricing of HIV/Aids medications and general pricing on drugs and their availability to poorer countries in recent years. Justin Forsyth, Save The Children Chief Executive said “Many years ago I used to campaign against GlaxoSmithKline and press them to lower Aids drugs prices, and we gave them quite a hard time, but GlaxoSmithKline has changed enormously and under [Sir Andrew Witty’s] leadership is leading not just the pharmaceutical sector but actually the private sector in terms of setting a standard for how a company moves beyond just corporate responsibility and philanthropy to how its core business can be transformative in terms of children,” he told the Guardian newspaper.

Save the Children also look to gain thousands of new advocates in the engagement of GSK’s global workforce. As GSK’s staff become more aware of the work of Save The Children, they will inevitably also be inspired to do more and perhaps even give in a personal capacity both in time and money to the charity, beyond the expectations of the employee engagement programme. Globally, the impact of this engagement is likely to be prolific for the charity in all of the corresponding countries as the GSK/STC partnership is rolled out.

What can we learn from the example of this partnership?

1. CSR is much more than asserted and aspirational goals and objectives. Truly effective and genuine CSR emerges from the core of commercial business and manifests in altruistic, commercially viable and ideally advantageous implementation. The better you do at business, so long as it is done ethically, the greater good you can deliver via your charitable partners.

2. Philanthropic partnership does not give companies a licence to gag their charity partners with a bought silence on issues of efficacy and justice. Effective partnerships can actually allow for each partner to become ‘critical friends’ who are able to create common and impactful good, whilst maintaining and continuing to do what they each do best.

3. Innovation is key in effective causal relationships between charities and companies. In this example we see how GSK have committed to innovate their existing commercial products to meet specific humanitarian needs identified through the work of Save the Children. In addition to this they are also embarking on a process of collaborative product development which brings the charity and its own expertise into the very core of GSK’s business of pharmaceutical innovation. That kind of direct link between product innovation and end user of those products (either purchasing consumer or beneficiary consumer) is rare in any business and will inevitably bring a commercial insight that will undoubtedly be advantageous for the wider business.

4. The profile of such partnerships is equally beneficial to both charity and business. For the charity, it brings a new level of trustworthiness from an often sceptical corporate world and opens up new funding streams in an economically barren funding landscape. It also gives the charity access to a whole new market of potential supporters and individual donors who are not only exposed to the charity through their work, but encouraged to be involved with the company’s chosen charity partner. For the business, the partnership redeems a company who were previously villainised by the charity and sends a clear message to hundreds of thousands of engaged campaigners and Save The Children supporters that GSK is now an ethically good company rather than an oppressive capitalist tyrant. That kind of endorsement can never be achieved by simply auditing and publicising your latest CSR audit. It takes your CSR audit and due diligence processes and explodes them into a living, breathing force for good.

The partnership between GSK and Save The Children has created a new high waterline in causal marketing and CSR implementation. The partnership is undoubtedly possible due to the substantial profits and turnover of a global commercial giant. So what does all this learning mean for companies who are not yet ending their financial year with a profit of more than $9 Billion?

The principles actually remain the same. The only potential difference is that an SME wanting to engage in an innovative and genuinely ethical partnership with a charity can leverage the influence and power of the charity brand to a greater degree than GSK perhaps need to. If the charity brand is bigger than yours, the benefits of driving footfall, endorsement marketing and credible recommendation will serve a company well.

Whether your company is large or small, asking Charities to quantify and qualify the specific return for wider society and your business in exchange for significant donations is something that should become much more standardised in philanthropic relationships. It increases transparency and accountability for both company and charity and ensures that CSR moves beyond green-washing or window dressing into genuinely life changing commercial and sustainable change.

Ultimately, the greater and ethical good that can come from effective corporate charity relationships is undoubtedly life-changing. When these relationships are taken to scale, the impact can become world-changing.


To find out how your company or charity can be part of an effective causal relationship click here


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