2010-11
The Impact of a Pharmaceutical Company's CSR
Activities on Doctors' Decisions about
Prescription Drugs
Tomoaki Shimada Yoko Uryuhara

The Impact of a Pharmaceutical Company's CSR Activities
on Doctors' Decisions about Prescription Drugs
Tomoaki Shimada and Yoko Uryuhara

ABSTRACTIn this study, we analyze the impact of pharmaceutical companies' CSR (corporate social
responsibility) activities on doctors' decisions about prescription drugs in a qualitative approach.
In Japan, the decision-makers of prescription drugs are not patients who actually use the drugs
but doctors, as specialists, who usually select the drugs. Thus, the pharmaceutical industry has a
special structure, with its products having some characteristics of consumer products (inbusiness-to-consumer environments) and those of industrial products (in business-to-businessenvironments). Our interviews with doctors suggest that pharmaceutical companies' CSR
activities hardly influence doctors' decisions about prescription drugs directly. Instead,
usefulness (i.e., efficacy and safety) is recognized to be the most important decision-making
factor for prescription drugs in their specialized medical fields and reputation of pharmaceuticalcompanies in their non-specialized fields. The results also show that the CSR activities ofpharmaceutical companies strengthen their reputation. In addition, our interviews with patientsand their supporters reveal that the views of patients about pharmaceutical companies' CSR
activities are different from those of doctors.

Keywords:
Corporate social responsibility, pharmaceutical industry, prescription drug, qualitative data,Japan

Version: February 19, 2010
(The previous version was submitted tothe 70th Academy of Management Annual Meeting in 2010.)

1

Introduction
Recently, in accordance with increased awareness of the pink-ribbon movement in Japan,
more and more pharmaceutical companies have started to hold a mammography examination
caravan. This is a free mammography examination campaign conducted all over Japan as a partof the social contribution of pharmaceutical companies. In fact, many local governments provide
mammography examination services at only a small charge throughout the year. However,presently, those services provided by local governments are not well recognized. Instead,pharmaceutical companies' social contribution activities starting with mammography
examination caravans have stimulated the mass media to promote early detection of breast
cancer.
Then, it is natural to question whether mammography examination caravans were ameaningful activity for pharmaceutical companies, who pay for the cost of the activity. Of
course, pharmaceutical companies may not expect a direct return from mammography
examination caravans, but such activities cannot be sustained unless the situation is win-win forboth pharmaceutical companies and breast cancer patients. Thus, we decided to investigate theimpact of pharmaceutical companies' CSR (corporate social responsibility) activities on doctors'
decisions about prescription drugs.
Mammography examination caravans are exactly a part of pharmaceutical companies'
CSR activities. CSR activities are becoming a competitive factor in many industries because of
the increased public opinion based on consumers. A growing number of companies, especiallythose whose customers are consumers, invest a large amount of money in CSR activities andpropagate those activities through advertisements and their websites. However, in Japan, thedecision-makers of prescription drugs are not patients who actually use the drugs but doctors, as
specialists, who usually select the drugs. Thus, the pharmaceutical industry has a special

2

structure, with its products having some characteristics of consumer products (in B2C(business-to-consumer)

environments)

and

those

of

industrial

products(inB2B(business-to-business) environments).
In this study, we conducted interviews with six breast cancer specialists to analyze theimpact of pharmaceutical companies' CSR activities on doctors' decisions about prescription
drugs in a qualitative approach. Similarly, we conducted interviews with six breast cancer
patients and their supporters to compare their views about pharmaceutical companies' CSR
activities with doctors'.

CSR Activities in the Pharmaceutical Industry
Since there are some differences in the definition of CSR among Japan, the US (UnitedStates), and EU (European Union) countries, those by two representative business groups ofJapan are introduced as follows: The definition of CSR by the Japan Business Federation(Nippon Keidanren) is "to understand economic, environmental and social aspects
comprehensively to make them sources of competitiveness and improve corporate values"(Nippon Keidanren, 2004). Furthermore, CSR "should be executed not by government
initiatives but by the voluntary efforts of industry." On the other hand, the Japan Association of
Corporate Executives (Keizai Doyukai) positioned the year 2003 as "the first CSR year inJapan" and CSR management as "a management system to develop both companies and society
synergistically, considering various stakeholders (customers, shareholders, employees, people ofthe next generations, local communities, etc.) widely and to harmonize the benefits for bothcompanies and society at a high level based on current social needs" (Keizai Doyukai, 2004).
Therefore, CSR is to be "not merely a social contribution or compliance but an investment
which should be positioned as the core of business and an active challenge to obtain future3competitive advantage."
Almost all companies are more or less engaged in CSR activities due to the influence of
public opinion. In recent years, many companies have made use of CSR activities strategicallysince consumers are likely to favor products of companies which are enthusiastic about CSR
activities. For example, Volvic supports UNICEF's (United Nations Children's Fund's) activities
to dig and maintain wells to secure drinking water in Africa, using a part of their proceeds fromthe sales of Volvic water under the concept of the "Drink 1, Give 10" program. Of course, thisdoes not necessarily mean that exactly 10 liters of well water is supplied in Africa for every 1
liter of Volvic water sold. However, this is a mechanism by which consumers can feel that they
are supporting African people who are suffering from a shortage of drinking water bypurchasing Volvic water, and Volvic can increase their sales while contributing to society at thesame time.
As for pharmaceutical companies' CSR activities, according to the latest ranking of
global companies, which is announced by Newsweek Japan every year, no less than three of the
top ten companies in CSR scores were pharmaceutical companies (AstraZeneca, Bayer, andNovo Nordisk) (Nakamura, 2008). However, no pharmaceutical company was included in the
top 50 Japanese companies in terms of CSR scores (Kishimoto & Nakamura, 2008). The CSR
score consists of four items: corporate governance, employee care, social contribution, andenvironmental action. Companies are ranked based on the total of a financial score out of 50
points and the CSR score out of 50 points. In fact, Astellas Pharma, a Japanese pharmaceuticalcompany, was ranked 35th in the ranking of global companies, which was the highest among
Japanese companies. However, their very high financial score, the 7th in the world,compensated for their rather low CSR score. In a way, large-scale Japanese pharmaceuticalcompanies tend to have low CSR scores in comparison to their high financial scores. This4

suggests their efforts toward CSR activities are not very aggressive, compared to their financial
power. In addition, another ranking of Japanese companies rated by Toyo Keizai indicates asimilar tendency, in that the total score of Takeda Pharmaceutical Company, whose financialscore had been the top for the past three years, fell to 97th after adding their CSR score, and thetotal score of Astellas Pharma, whose financial score was 8th, decreased to 56th with their CSR
score (Toyo Keizai, 2009). The ranking of companies rated by Toyo Keizai was also determinedbased on the total of the financial score out of 50 points and the CSR score out of 50 points.
However, Toyo Keizai determines CSR scores based on a CSR survey conducted by itself, while
those by Newsweek Japan are based on a CSR survey by EIRIS of the UK (United Kingdom).

Literature Review
Theme of whether a mammography examination caravan, one of the CSR initiatives
conducted by a pharmaceutical company, can contribute to the pharmaceutical company isrelated to that of whether high CSP (corporate social performance) leads to high CFP (corporate
financial performance). There have been many studies on the causal relationship between CSP
and CFP, that is, CSR activities and financial performance, and various interpretations have been
made for the relationship: There is no relationship between CSR activities and financial
performance, CSR activities better financial performance, CSR activities lower financial
performance, good financial performance enhances CSR activities, etc. This debate started in the
1960s and has continued until today. The following is the main body of literature discussing therelationship between CSP, which represents CSR activities, and CFP, which represents financial
performance, introduced chronologically.
Cochran and Wood classified 13 research papers published between 1972 and 1980,
which investigated the relationship between CSP and CFP, to report that nine showed positive5

correlations, three showed no correlation and only one showed a negative correlation (Cochran& Wood, 1984). Although Cochran and Wood's study itself suggested a positive correlation
between CSP and CFP, one of the reasons for inconsistent results in the early studies was thatthe definitions of CSR varied and the indices of CSP were not unified. Therefore, Aupperle andCarroll excluded profits-related CSP and investigated the relationship of CSP only related tosocial matters (laws, ethics, and charity) with short-term (one year) ROA (return on assets) andlong-term (five years) ROA, to find no correlation with ROA on either a long term or short termbasis (Aupperle & Carroll, 1985). Ullmann assumed that the reason for the inconsistent resultson the relationship between CSP and CFP derived from different extensiveness of information
disclosure for CSR activities conducted through manual reporting to shareholders (Ullmann,
1985). He proposed an analytical framework, considering the interactions between three factors:
CSP, CFP, and social disclosure.
McGuire et al. compared CSP with both CFP before the commencement of CSR
activities and CFP after the commencement, to find that CFP before the commencement of CSR
activities had a stronger relationship with CSP than that after the commencement (McGuire etal., 1988). This implies that when CFP is good, CSP thereafter becomes better, rather than thatwhen CSP is good, CFP thereafter becomes better. Waddock and Graves recognized the two-way
causal relationship between CSP and CFP, and explained each relationship with a different
theory (Waddock & Graves, 1997). Since companies with good CSP are supposed to conduct
good business management, excellent business management may improve CFP thereafter. On
the other hand, since companies with good CFP often have slack resources in their organizations,
CSP may be improved by allocating the slack resources to CSR activities thereafter.
McWilliams and Siegel asserted that the reason for the positive relationship between
CSP and CFP, which was observed in many of the previous studies, was overestimation of CFP,6

as investment in research and development was not controlled (McWilliams & Siegel, 2000). It
was shown that when investment in research and development was added as a control variable,
CSP rarely affected CFP. In addition, Ruf et al. focused on variations in CSP and found apositive relationship between variations in CSP and those in CFP (Ruf et al., 1998).
The relationship between CSP and CFP was also analyzed from the viewpoint of SRI(socially responsible investment), which shows whether an investor invests in companies
conducting CSR management preferentially. By using modern portfolio theory and stakeholder
theory, Barnett and Salomon found a curvilinear relationship, showing that when CSP was low
or high, CFP was high, and when CSP was medium, CFP was low (Barnett & Salomon, 2006).
This is because a SRI fund manager invests in companies with low CSP by setting milder
conditions for the purpose of diversification from the viewpoint of modern portfolio theory, andalso invests in those with a good relationship with their stakeholders, which means high CSP,
from the viewpoint of stakeholder theory at the same time. Therefore, when CSP is shown on
the x-axis and CFP on the y-axis, the curve becomes U-shaped.
The review study which covered the largest number of studies on the relationshipbetween CSP and CFP is the one conducted by Margolis and Walsh (Margolis & Walsh, 2003)
They analyzed 127 studies published between 1972 and 2002. Of the 127 studies, 109 studies
examined the impact of CSP on CFP, and 54 of them reported positive influences, 7 reported
negative influences, 28 reported insignificant influences, and 20 reported mixed influences.
Unfortunately, no study on the investigation of CSP and CFP in Japan was included in the 127
studies. However, Nakao et al. focused on the environmental performance of Japanesecompanies in CSP and found that environmental performance had a positive impact on CFP(Nakao et al., 2007).
Orlitzky et al. conducted meta-analysis of the relationship between CSP and CFP based

7

on the results of 52 studies, to find that CSP had a stronger relationship with account-based CFP
such as ROA and ROE (return on equity) rather than market-based CFP such as stock prices(Orlitzky et al., 2003). In addition, it was also indicated that reputation-related indices in CSP
had a stronger relationship with CFP than any other indices. In fact, many scholars haveinvestigated the interactions between reputation and CFP (e.g., Roberts & Dowling, 2002).

Decision-Making Model of Prescription Drugs
As shown in the conceptual model in Figure 1, if mammography examination caravans, apart of CSR activities, influence doctors' decisions about prescription drugs, no direct causal
relationship can be easily thought of, so that it can be assumed that the reputation of apharmaceutical company may mediate CSR activities and doctors' decisions about prescription
drugs. Then, other than CSR activities of a pharmaceutical company starting with amammography examination caravan, what factors are related to the reputation of pharmaceuticalcompanies? We thought of "a pharmaceutical company's product information before use", "apharmaceutical company's product support after use", "personal trust in a pharmaceuticalcompany's sales staff", "time length of business relationship with a pharmaceutical company ortime length of the use of a pharmaceutical company's products", and "pharmaceutical company
size". Similarly, other than "a pharmaceutical company's reputation", what factors influence
doctors' decisions about prescription drugs? We thought of "quality of drugs/usefulness (efficacy
and safety) of drugs", "opinions of specialists in drugs", and "prices of drugs".
Furthermore, in this study, CSR activities were considered to consist of three pillars:"sound management", "environmental activities", and "social contribution activities". Amongthe three pillars, especially, social contribution activities are aggressively practiced in theJapanese pharmaceutical industry and these are roughly categorized into "contributions to8therapeutic areas", "contributions to arts, sciences, and sports", "contributions to local
communities", and "philanthropic programs". For example, according to the above-mentioned
ranking of global companies announced by Newsweek Japan, Takeda Pharmaceutical Company,
which had the highest CSR score among Japanese pharmaceutical companies, has provided
antidiabetic drugs for low-income patients in the US for free (contributions to therapeutic areas),
provided grants for scientific and technological research and cosponsored a marathon(contributions to arts, sciences, and sports), repaired buildings and houses in low-income
residential areas of Chicago (contributions to local communities), and aided disaster victims andsupported the United Nations World Food Program (philanthropic programs) (Takeda
Pharmaceutical Company, 2007). Mammography examination caravans should be categorized
into "contributions to therapeutic areas".
FIGURE 1
Decision-Making Model of a Product ChoiceSound Management

CSR Activities

Quality/
Usefulness

Environmental
Activities
Social Contribution
Activities Contributions to
Therapeutic Areas
 Contributions to Arts,
Sciences, and Sports
 Contributions to
Local Communities
 Philanthropic
Programs

Product Information
Before Use

Company's
Reputation

Product Support
After Use
Personal Trust in
Sales Staff

Product
ChoiceSpecialists'
Opinions

Length of Business
RelationshipPricesCompany Size

Research Methodology
In this study, we conducted exploratory research in a qualitative approach. We

9interviewed doctors to construct a basic theory on the impact of pharmaceutical companies' CSR
activities on their decisions about prescription drugs. As a pre-test before the interviews, theopinions of an employee of a pharmaceutical company and a doctor were obtained to draw up adecision-making model for product choice, shown in Figure 1. Although the conceptual modelin Figure 1 contained factors that some interviewees did not consider at all or did not containthose that an interviewee considered (e.g., advertisements as a factor leading to the reputation of
the company), all the interviewees basically agreed that the model is appropriate as a common
model for product choice. Interviews were conducted in a semi-structured form, and open
questions, multiple-choice questions, and questions to be answered with only numbers wereprepared in advance. According to the contents of the actual answers, some extra questions wereadded. The number of questions asked of all the doctors was 12 in total, and the questions andanswer forms are shown in Table 4 of the Appendix. Although the same interviews wereconducted for both doctors and patients/their supporters, some of the questions were omitted forpatients/their supporters, as they were irrelevant to them. The interviewees for each question are
also shown in Table 4.
The interviewees were six breast cancer specialists and six patients/their supporters.
Among the six specialists, three doctors went on the air or appeared in the newspapers toadvertise mammography examination caravans or became a lecturer on the day of the caravans,
and another three doctors were not related to any of such events. Five of the six doctors werebreast cancer specialists approved by the Japanese Breast Cancer Society, and all of them were
working at a hospital or had worked at a hospital until recently. On the other hand, two patientsof the six had breast cancer, and all of the four supporters regularly worked for cancer
patient-support organizations and were either family members of the patients or healthcare
professionals at the same time.

10For doctors, interviews were conducted in five different situations by showing Figure 1:(1) when selecting general consumer products (drinking water or PCs (personal computers)) as aconsumer, (2) when selecting OTC (over-the-counter) drugs as a consumer, (3) when selecting
prescription drugs in specialized fields as a doctor, (4) when selecting prescription drugs in
non-specialized fields as a doctor, (5) when selecting prescription drugs five years ago in
specialized fields as a doctor. Regarding the last situation, although memories of five years ago
should have been easily recalled, we have to note that the answers may have lacked precision.
However, since the questions were made as a comparison with the current situation, the answers
should be useful for relative comparison. In addition, not only the ratio of factors for productselection in Figure 1 but also reasons for the ratio and interviewees' evaluation of the conceptualmodel itself were asked interactively through the interviews.
Additionally, as shown in Table 4, both doctors and patients/their supporters were asked
whether the CSR activities which pharmaceutical companies are engaged in have improved thereputation of the company. The answers were evaluated for each activity with a 5-point Likert
scale: "strongly agree" (5 points), "somewhat agree" (4 points), "neither agree nor disagree" (3points), "somewhat disagree" (2 points) and "strongly disagree" (1 point). Furthermore, therelationship between CSR activities and selection of prescription drugs, evaluation of a specific
CSR activity (i.e., a mammography examination caravan) of pharmaceutical companies, andevaluation of a specific CSR activity ("Drink 1, Give 10" program of Volvic) of consumer
product manufacturers were also asked with a 5-point Likert scale in a similar way.

Results
Before presenting Figure 1, we asked the doctors to freely give the decision-making
factors for their choice of prescription drugs. With regard to the choice of drugs in their11specialized fields (i.e., anticancer drugs), four of the six doctors mentioned the effects (i.e.,
efficacy) and two mentioned usefulness (i.e., both efficacy and safety) as the decision-making
factors. The interviews also revealed that all six doctors relied on EBM (evidence-based
medicine). In other words, they use objective evaluations based on clinical trial results as thecriteria to determine the usefulness of drugs. Meanwhile, regarding drugs in their
non-specialized fields (e.g., antihypertensives, antibiotics, etc.), all responded that they choose
drugs that they "have used before" or that they "know", and no one mentioned the effects as adecision-making factor. Of course, they choose drugs that they "have used before" not only
because of the experience of using them but also because of the positive effects as a result ofusing them. The drugs they "know" specifically meant the well-known drugs that have beenused widely for a long time, or that were advertised frequently in medical journals orcommercial media, as well as the drugs about which information had been provided by MRs(medical representatives) of pharmaceutical companies. Some said that they consult with aprofessional pharmacist in that specific field to select the most appropriate drugs. In short,doctors tend to choose the drugs they consider as the most useful based on their knowledge
when they have sufficient professional expertise about the disease, while they select drugs thatthey have used before, drugs that are widely known, drugs about which information has been
provided, or drugs recommended by a specialist in that field when their knowledge is not
sufficient.
Next, we showed Figure 1 to the doctors and asked them to give a percentage to each of
the decision-making factors for their choice of prescription drugs in their specialized medical
fields, drugs in their specialized fields five years ago, and drugs in non-specialized fields fromthe standpoint of doctors. We also asked them to give a percentage to each of thedecision-making factors for their choice of drinking water, PCs, and OTC drugs from the12standpoint of consumers, just for reference. The percentages shown in Table 1 are the meanvalues for the six doctors. The characteristics of each product (i.e., time of decision-making,prices, and periods of use) are also evaluated on four levels since the product characteristics may
influence the product choice. When choosing a drug in their specialized fields, doctors placed
the highest emphasis on usefulness based on their own specialist knowledge without asking forothers' opinions. The interview results, however, also show that they consider the prices of
products depending on the medical or economic situation of patients. For instance, when apatient suffers recurrence of cancer or requires a long period of medication, they present theamount of money estimated to be needed, ask the priorities of the patient, and then choose adrug taking into account the prognosis, together with the patient. When choosing a drug indoctors' non-specialized fields, meanwhile, because their knowledge is poorer than that in their
specialized fields, they place the highest emphasis on the pharmaceutical company's reputation,and opinions of a specialist in that field also have a great influence on their decision-making. As
shown in Table 1, percentages given to doctors' decision-making factors for drugs in their
non-specialized fields were similar to those of OTC, rather than those of drugs in their
specialized fields. Needless to say, the specialists for OTC drugs mean pharmacists.
As to doctors' choice of prescription drugs in their specialized fields five years ago,emphasis on usefulness and prices is lower while pharmaceutical company's reputation is higher
compared to the figures for choices made now. Except for one who gave exactly the same
percentage to prices now and prices five years ago, all of the other five answered that they did
not consider prices five years ago. Since the concept of EBM was not very common five years
ago, doctors made decisions based mostly on pharmaceutical companies' reputation that was
mainly affected by availability of product information before use and doctors' personal trust in
MRs. Moreover, the concept of "living with cancer" was not widely known five years ago and it

13

was not common in Japan for patients to decide by themselves their way of life or treatment
method. Focus was placed only on treatment of the lesion, based on which necessary drugs wereselected, and prices of drugs were rarely considered. Furthermore, few patients talked with theirdoctors about the cost of drugs in those days. The change over the past five years seems to havebeen brought by a social consensus that the drug cost should be considered, which has been
formed due to the recent rise of generic drugs, and the social awareness that patients should playa central role in medical treatment.
TABLE 1
Percentages of Each Decision-Making Factor of a Product Choice andProduct Characteristics

72.5%

Prescription
Drugs inSpecialized
Fields (5years ago)
62.5%

19.2%

36.7%

38.0%

47.5%

26.7%

27.5%

0%

0%

23.0%

0%

20.0%

29.2%

8.3%
Relatively
Long

0.8%
Relatively
Long

35.0%

22.5%

16.7%

Short

Long

Short

Prices

High

High

Low

High

Periods of Use

Long

Long

5.0%
Relatively
Short
Relatively
High
Relatively
Long

Short

Long

Decision-Making
Factors of a
Product Choice
Quality/Usefulness
A Company's
Reputation
Specialists'
Opinions
PricesTime ofDecision-Making

Prescription
Drugs inSpecialized
FieldsPrescription
Drugs in
Non-Specialized
FieldsDrinking
Water

Personal
Computers

OTC
Drugs

34.0%

17.5%

30.8%

26.7%

Relatively
Low
Relatively
Short

As Figure 1 shows, various factors including CSR activities contribute to the improved
reputation of a company, which will influence doctors' choice of drugs in their specialized fields.
However, the company's reputation rate as a contribution to the choice of drugs is less than 20%
as shown in Table 1, and the CSR activities rate as a contribution to a company's reputation is
below 10% as shown in Table 2. This means that the rate of a company's CSR activities

14

affecting the choice of drugs through the improved company's reputation is less than 2% (= 20%
x 10%). Thus, a pharmaceutical company's CSR activities contribute little to doctors' decisions
about prescription drugs in their specialized fields.
TABLE 2
Percentages of Each Factor Affecting a Company's Reputation
Patients/
Patients'
Supporters

Doctors
Factors Affecting a
Company's Reputation
CSR Activities
A Company's Product
Information before Use
A Company's ProductSupport after Use
Personal Trust in a
Company's Sales Staff
Time Length ofBusiness Relationshipwith a Company (Time
Length of the Use of aCompany's Products)
Company Size

Prescription
Drugs inSpecialized
FieldsPrescription
Drugs in
Non-Specialized
Fields

Personal
Computers

OTC
Drugs

OTC Drugs

8.4%

3.8%

10.0%

2.0%

13.0%

37.0%

26.3%

25.0%

4.0%

24.0%

15.4%

8.8%

24.0%

4.0%

10.0%

26.4%

21.3%

0%

0%

0%

8.4%

5.0%

10.0%

2.0%

12.0%

4.4%

35.0%

31.0%

88.0%

41.0%

As shown in Table 2, among the factors that may influence the reputation of apharmaceutical company, doctors place higher emphasis on the company's product information
before use and personal trust in the company's sales staff (i.e., MRs) rather than on thecompany's CSR activities, when they select drugs in their specialized fields. Since MRs provide
doctors with information about prescription drugs, information provided by a company before
use and personal trust in a company's sales staff are closely related to each other. According to
the respondents, elements that constitute trust in an MR include: honest attitude such as keeping
promises, flexible actions that match the doctors' situation, rich medical knowledge not only

15

about his/her own company's products but also about the disease as a whole, practical ability inorganizing events, etc.
Meanwhile, in doctors' choice of drugs in their non-specialized fields, while a company's
product information before use and personal trust in a company's sales staff are considered to beimportant factors that lead to an improved reputation of the company, greater emphasis is placedon the size of the pharmaceutical company. If a company is large, it is unlikely to go bankrupt
and therefore doctors can feel relieved that a stable supply of drugs is ensured, and more
importantly, advertisements for such a company or its products are often seen, which enables
consumers to recognize the product names visually, resulting in an improved reputation of thecompany. This tendency of greater emphasis on company size is particularly strong for the
choice of OTC drugs. From the viewpoint of doctors, company size seems to be the only factor
that leads to the improved reputation of a company. The view of patients and their supporters,
however, is a little different from each other. They place a rather high emphasis on CSR
activities as a factor contributing to a company's reputation, though they see company size as themost important factor in the choice of OTC drugs.
While

doctorsandpatients/patients'

supporters

evaluate

CSR

activities

bypharmaceutical companies differently as shown in Table 3, what both parties strongly want
pharmaceutical companies to do is to contribute to therapeutic areas. Doctors do not have strong
opinions about what sort of CSR activities pharmaceutical companies should be engaged in.
Some are not even interested in CSR activities by pharmaceutical companies. As the reason forsuch lack of interest, mostly they said that since doctors are responsible for patients as
professionals, their choice of drugs should be based on usefulness and should not be affected by
the CSR activities of pharmaceutical companies. Some doctors said, however, that if they obtainmuch information about CSR activities through MRs, it may affect their decisions about the16choice of drugs.
TABLE 3
Evaluation of CSR Activities that Gain Pharmaceutical Companies' Reputation
Types of CSR Activities

Doctors(Out of 5 Points)

Patients/Patients'
Supporters(Out of 5 Points)

4.3

5.0

3.2

4.0

5.0

5.0

3.2

2.3

3.7

3.3

3.5

3.7

Sound Management
Environmental Activities
Social Contribution Activities:
Contributions to Therapeutic Areas
Social Contribution Activities:
Contributions to Arts, Sciences, and Sports
Social Contribution Activities:
Contributions to Local Communities
Social Contribution Activities:
Philanthropic Programs

On the other hand, patients and their supporters said that they strongly believe thatpharmaceutical companies should place higher emphasis on contributions to therapeutic areas
rather than on general contributions and support for developing countries. There was also an
opinion that companies should use their profits to satisfy unmet medical needs instead of using
them for CSR activities. The mammography examination caravan, a disease awareness-raising
campaign, is highly appreciated not only by patients/patients' supporters but also by doctors, nomatter whether they participated in the caravan or not. Some patients, however, said sinceactivities like the mammography examination caravan, which they highly appreciate, can be
conducted by local governments, they want pharmaceutical companies to conduct the type of
CSR activities that only pharmaceutical companies can do.

Discussions and Conclusions
In this study, with the aim of finding an answer to the question of whether the17

mammography examination caravan makes any contributions to a company, qualitative analysis
was conducted to determine the impact of CSR activities on doctors' decision-making onprescription drugs. Like many other countries, it is rare in Japan for patients, despite being theconsumers of drugs, to actually choose the drugs themselves, and the choice is usually made by
doctors, who are the specialists. In US hospitals, doctors specify generic names of prescription
drugs instead of their product names for promotion of wider use of generic drugs, and thedecision to select a specific drug is made by pharmacists working at an out-of-hospital
pharmacy or the patients. Like many other countries, in Japan, the financial cost of drugs is
ultimately borne by patients, or consumers, though by means of national health insurance or
private insurance in most cases. In short, in Japan, unlike the system for general consumer
products, the system for prescription drugs is unique in that doctors decide the products topurchase on behalf of patients using their specialist knowledge while patients just pay for thecost of the products. In this sense, prescription drugs have the characteristics of both B2C andB2B.
This seems to be the reason why large Japanese pharmaceutical companies' CSR
activities are not very active compared to their financial capacity. According to CSR scorespresented in the company rankings by Newsweek Japan and Toyo Keizai, B2C companies
generally receive higher CSR scores than B2B companies. This means that B2C companies
place higher emphasis on CSR activities than do B2B companies. Of course, B2B companies aremaking efforts to satisfy the environmental standards required by their client companies. But
they are probably not making the kind of efforts that B2C companies are making to enableconsumers, who are their customers, to be aware of their social contribution activities. In otherwords, B2C companies are actively engaged in CSR activities while the CSR activities by B2B
companies are rather passive.

18

With this in mind, this study conducted an investigation to find answers to the following
questions: In the prescription drug industry, which has the characteristics of both B2C and B2B,
do CSR activities have an influence on doctors' decisions about drug selection? If they do, what
are the other influential factors and what kind of CSR activities are recommended? Or if CSR
activities have no direct impact on doctors' decisions about the choice of drugs, what are themediating factors between CSR activities and doctors' decisions about drugs? Are there any
differences in doctors' decision-making factors for the choice of prescription drugs in their
specialized medical fields and in their non-specialized fields? Are the decision-making factors
different from those of five years ago when the concept of EBM was not as well-known? And
are such decision-making factors also effective when doctors choose a general consumer
product such as drinking water, PCs, or OTC drugs at a pharmacy, as consumers?
The answer to the question of whether the CSR activities of a pharmaceutical company
have an influence on doctors' decisions about drugs is: Although no direct relationship was
found, there appears to be a slight indirect relationship in that a company's CSR activities
contribute to improving the reputation of the company, and a better reputation influences
decision-making about the choice of drugs. Improving a company's reputation requires along-term strategy and it may be too early to conclude at this point that CSR activities have little
influence on doctors' decisions about prescription drugs directly or indirectly. Since CSR
activities include many elements other than advertising, it is more appropriate to think about
what kind of CSR activities are effective than to think about how many CSR activities should be
carried out. It is therefore necessary to listen to the opinions about CSR activities from doctors,
who actually select drugs, and patients/patients' supporters, who are the users of drugs. The typeof CSR activities that were supported by all those interviewed was contributions to therapeuticareas. This demonstrates that the mammography examination caravan as a CSR activity satisfies

19the needs of customers.
[2010.2.22 961]

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20

Appendix
TABLE 4
Questions in the Interviews
Question Items

Questions

Q1: Decisionmaking factors ofprescription drugsin specialized
medical fields
Q2: Decisionmaking factors ofprescription drugs
in non-specialized
medical fields
Q3: Decisionmaking factors ofdrinking water as a
general consumer
product
Q4: Decisionmaking factors of apersonal computer
as a general
consumer product

What factors do you consider when selecting
prescription drugs (i.e., anti-cancer drugs) inyour specialized medical fields (i.e., breast
cancer)?

Q5: Decisionmaking factors of
OTC drugs

AnswerForms
Open

Doctors

What factors do you consider when selecting
prescription drugs in your non-specialized
medical fields (e.g., antihypertensives,
antibiotics, etc.)

Open

Doctors

In Figure 1, what percentage does each of thefactors, "quality/usefulness", "a company's
reputation", "specialists' opinions" and"prices", affect your product choice ofdrinking water as a general consumer?
In Figure 1, what percentage does each of thefactors, "quality/usefulness", "a company's
reputation", "specialists' opinions" and"prices", affect your product choice of apersonal computer as a general consumer?
Regarding "a company's reputation", whatpercentage does each of the factors, "CSR
activities", "product information before use","product support after use", "personal trust insales staff", "time length of business
relationship (or product use)" and "company
size", affect the product choice?
In Figure 1, what percentage does each of thefactors, "quality/usefulness", "a company's
reputation", "specialists' opinions" and"prices", affect your product choice of OTC
drugs as a general consumer? Regarding "acompany's reputation", what percentage does
each of the factors, "CSR activities","product information before use", "productsupport after use", "personal trust in sales
staff", "time length of business relationship(or product use)" and "company size", affectthe product choice?

Percentagesof eachfactor to
make 100%in total
Percentagesof eachfactor to
make 100%in total

Doctors andPatients/
Patients'
Supporters

21

Percentagesof eachfactor to
make 100%in totalInterviewees

Doctors andPatients/
Patients'
Supporters

Doctors andPatients/
Patients'
Supporters

Q6: Decisionmaking factors ofprescription drugsin specialized
medical fields

Q7: Decisionmaking factors ofprescription drugsin specialized
medical fields(5 years ago)

Q8: Decisionmaking factors ofprescription drugs
in non-specialized
medical fields

Q9: Relationshipbetween CSR
activities and acompany's
reputation

In Figure 1, what percentage does each of thefactors, "quality/usefulness", "a company's
reputation", "specialists' opinions" and"prices", affect your product choice ofprescription drugs (i.e., anti-cancer drugs) inyour specialized medical fields (i.e., breast
cancer)? Regarding "a company's
reputation", what percentage does each of thefactors, "CSR activities", "productinformation before use", "product support
after use", "personal trust in sales staff","time length of business relationship (orproduct use)" and "company size", affect the
product choice?
In Figure 1, what percentage does each of thefactors, "quality/usefulness", "a company's
reputation", "specialists' opinions" and"prices", affect your product choice ofprescription drugs (i.e., anti-cancer drugs) inyour specialized medical fields (i.e., breast
cancer) 5 years ago? If the percentages ofeach factor are different from now, why are
they different?
In Figure 1, what percentage does each of thefactors, "quality/usefulness", "a company's
reputation", "specialists' opinions" and"prices", affect your product choice ofprescription drugs in your non-specialized
medical fields (e.g., antihypertensives,
antibiotics, etc.)? Regarding "a company's
reputation", what percentage does each of thefactors, "CSR activities", "productinformation before use", "product support
after use", "personal trust in sales staff","time length of business relationship (orproduct use)" and "company size", affect the
product choice?
Do you think CSR activities that a
pharmaceutical company is engaged in gain
its reputation? Please answer, according toeach of the following categories:
・Sound management
・Environmental activities
・Social contribution activities: Contributions
to therapeutic areas
・Social contribution activities: Contributions
to arts, sciences, and sports
・Social contribution activities: Contributions
to local communities
・Social contribution activities: Philanthropic
programs

22

Percentagesof eachfactor to
make 100%in total

Doctors

Percentagesof eachfactor to
make 100%in total

Doctors

Percentagesof eachfactor to
make 100%in total

Doctors

5-point
Likert Scales(DisagreeAgree)

Doctors andPatients/
Patients'
Supporters

Q10: Relationshipbetween CSR
activities and a
product choice

Do you want to purchase products ofcompanies that are positively engaged in
CSR activities?

5-point
Likert Scales(DisagreeAgree)

Doctors andPatients/
Patients'
Supporters

Q11: Evaluation
for specific CSR
activities ofpharmaceuticalcompanies

Regarding "Mammography Examination
Caravan", (1) do you think the reputation of acompany that is engaged in this program wasgained? (2) Do you want to choose a drug ofa company that is engaged in this program?
(3) Do you want to choose an anti-cancer
drug of a company that is engaged in thisprogram?
Volvic implemented "Drink 1, Give 10"
program. (1) Do you think the company's
reputation was gained? (2) Do you want topurchase Volvic water because of thisprogram?

5-point
Likert Scales(DisagreeAgree)

Doctors andPatients/
Patients'
Supporters

5-point
Likert Scales(DisagreeAgree)

Doctors andPatients/
Patients'
Supporters

Q12: Evaluation
for specific CSR
activities ofconsumer productmanufacturers

23