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Executive Summary

PMA COMMUNICATIONS TO GENERAL PUBLIC HAVE BEEN "THOROUGHLY INCOMPETENT" from the perspecitive of conveying the industry's message, Rhone-Poulenc Rorer Pharmaceuticals Group President Randy Thurman declared at a Sept. 12 Bear Stearns meeting in New York City. Thurman reproved the association for "the position that they've taken to educate the public on the quality of life delivered by the pharmaceutical companies." Thurman, a relatively recent recruit to the drug industry, said that creating a better public image for the drug industry "is a task that the pharmaceutical industry has to . . . [take] more seriously." Thurman acknowledged that the PMA has become more readily visible in the area. "I even noticed in USA Today this week on the inside of the front cover, the PMA ran an advertisement on just this issue," he said, "so I think that the association . . . is going to take this on more seriously." Thurman, 41 and an executive at RPR and its predecessors for the past six years, maintains that the new generation of leaders in the industry will be less bashful about communicating to the general public on behalf of the industry. Thurman was brought to the company by RPR Chairman Robert Cawthorne. Thurman previously was an exec with Pepsico. "A lot of the leadership that has been in this industry will be turning over in the next five years," Thurman observed. "I think you'll see a new generation of leadership in this industry that's going to be out there communicating in a very forceful way." Upjohn President William Parfet, 45, who succeeded to the office on Jan. 1, agreed with Thurman: "There is a new generation of managers now in this industry; we're prepared to present our story and present it in a very forceful way." The public "attack" on the perception of excessive industry profits is the major challenge, Thurman told Bear Stearns. As an example of the cost of failing to get the message out, Thurman alluded to the negative effect of the recently enacted rebate legislation for Pennsylvania's Pharmaceutical Assistance Program for the Elderly (PACE). Thurman noted that the pharmaceutical industry is the fastest growing industry in Pennsylvania; but, he said, "all the tax breaks" go to the troubled steel industry. Thurman implied that the rebate program can be viewed as a masked tax on the drug industry to help support the state benefit program. PACE Director Thomas Snedden told the same meeting that Pennsylvania will be looking at stricter cost containment measures next year ("The Pink Sheet" Sept. 16, p. 15). The industry's strongest selling point, Thurman said, is the cost savings generated from drug therapy. He cited a Battelle study sponsored by Schering-Plough as evidence of the savings generated by pharmaceuticals ("The Pink Sheet" March 11, T&G-7). To justify its profits, the industry must "get across to the consumer such issues as the relationship between the costs of drugs and the cost of innovation" and "the relationship between scientific innovation and healthcare savings." PMA's role in communicating to the general public has been a recurring issue for the association. At its 1988 annual meeting, for example, PMA budgeted $ 2.5 mil. to help "shift the focus" of the cost-containment debate. The outside public relations firm Burson-Marsteller was hired to help ("The Pink Sheet" May 2, 1988, p. 7). Rhone-Poulenc Rorer is becoming a more active participant in public forums. Thurman's presentation to Bear Stearns marked the company's second consecutive appearance at that financial seminar. At last year's meeting, RPR Chairman Robert Cawthorn represented the company ("The Pink Sheet" Oct. 1, In Brief). At that meeting, Cawthorn discussed RPR's attempts to license Maalox, which have since been abandoned. (NEW LINE) (NEW LINE)[Editor's Note: The Pink Sheet" (Aug. 19, p. 7) incorrectly characterized RPR's proposed deals with Maalox as attempts to "sell" the product. In an Aug. 22 letter to "The Pink Sheet," Thurman pointed out that the firm did not intend to transfer the product ownership but to license marketing rights. "Maalox was not then, and is not now, for sale," Thurman explained. "The arrangement with Procter & Gamble would have left the ownership of Maalox with RPR and merely granted to P&G the rights to market the product in the U.S."]

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