The Importance of Effective Media Response

Originally posted 12/31/2007; Update appended

Two drug makers are sued in a bribery probe by European regulatory officials (The Wall Street Journal article is here). Only one, GlaxoSmithKline, decides to make a public statement (the other company is AstraZeneca). GSK is quoted in the Wall Street Journal article as follows:

"GlaxoSmithKline doesn't believe that its employees or its agents in Iraq knowingly engaged in wrongdoing regarding the oil-for-food program," the company said. "In fact, GSK went to considerable lengths to cooperate with U.K. government authorities responsible for the U.K. administration of the program, and to impose anticorruption measures when dealing with intermediaries in Iraq at a time when the environment was extremely volatile and difficult."

(the full statement is prominently posted on the GSK homepage).

However this plays out, the key point is that GlaxoSmithKline was certainly ready when the reporters came-a-calling, with a response that positions the company in the best possible light.

It will be interesting to see how their public response affects perceptions as this investigation moves forward -- and also, how it affects further action by fraud probers against the various companies, actions by plaintiffs lawyers, etc. My theory is that it is the "blood in the water" that attracts the sharks: if you fumble your media response, it emboldens the other side. Conversely, if you seem like a hard target publicly, the other side will lose interest, divert resources, and perhaps even move on to prey that seems less likely to put up a fight.

I'll continue to monitor and update as this moves forward.

(As an aside, the Associated Press is reporting that three companies are actually inluded in the fraud probe, the third being Eli Lilly. An interesting development that, I'm guessing, will likely see some of these stories changes in the days to come).

UPDATE 1/2/2007: In a later version of the Wall Street Journal story, Astra Zeneca did respond in more detail to the allegations:

When the fraud-office inquiry began in February, AstraZeneca said it had sent a consignment of medicines to Iraq under the oil-for-food program but denied "any allegation of unethical behavior on our part in our trading relationships with Iraq." It said all medicines were sent with relevant U.N. and U.K. documentation.

...still no inclusion of Eli Lilly, although many other news sources have named them as the third company under investigation (see, for example, here).