CROSS BORDER

The critical role of culture in pharmaceutical operations

Marvin Bower, former managing director of McKinsey & Company –

A definition of corporate culture

“It’s the way we do things around here”

CORPORATE

Hofstede’s definition of culture:

“Culture is the collective programming of the

mind that distinguishes one group or category of

people from another.”

BANGLADESH

MODERN

CHINESE

TRADITIONAL

CHINESE

UNITED

KINGDOM

Some western cultural concepts related to disease

• A high expectation that disease can be cured or at least

“managed”

• The need to leave the doctors surgery with a

prescription.

• The belief that medicines should be powerful but free of

risk

• Belief that physical disease is separate from emotional

and spiritual dimensions

• A belief that mental diseases are not as “real” as somatic

disease.

Differences in attitudes between UK and US PhysiciansMedscape 2012

One mans meat is another mans fish (Fr: poisson)

• Co-trimoxazole suspension

– Roche product sweet, pink, cherry-flavored

– Teva’s first US generic was based on the local (Israeli)

formulation which was anise flavored

• Tylenol extra strength adult syrup

– An unpleasant bitter peppermint flavor

– A generic formulation with taste masking was rejected by

US marketing as non-equivalent

• EP/USP description of Drug substance: white to off white is

acceptable but Japan will not accept off-white as a

descriptive

• J&J’s attempt to launch a black Elastoplast as a “skin

coloured product for the African market” failed

Packaging

• Obviously the art work will reflect the appropriate cultures of the target countries

• But this can actually produce some more complicated issues as for example:-

– Different shelf life due to the US packaging (bottles with desiccant) versus the European preference for blister packs.

• “The split tablet, when stored in standard high-density polyethylene

pharmacy bottles and caps (no seal), should meet established stability

requirements for a period of 90 days at 25º +/- 2º C:60% +/-5% Relative

Humidity”.

Why do they require 90 days stability?

Europeans naturally

break one tablet, take

one half now and the

other half at the next

dosage point.

The Americans take the

whole of the prescription

and break all the tablets.

Mitigating the Risks of Ethanol Induced Dose Dumping from Oral

Sustained/Controlled Release Dosage Forms FDA meeting Oct 2005

• Palladone (hydromorphone hydrochloride

extended release) Capsules was approved by the

United States Food and Drug Administration

(FDA) on September 24, 2004,

• Soon after the approval the FDA requested

Purdue Pharma LP to withdraw the product from

the market due to serious safety concerns based

on new data showing that when Palladone was

taken with alcohol, the extended release

mechanism was harmed leading to dose‐dumping.

As a result the FDA introduced dissolution in

alcoholic media for a wide range of products

Irrespective of the fact that the label says quite clearly

DO NOT DRINK WHILE TAKINGEEEE

The FDA dissolution requirements

• Due to concerns of dose dumping from this drug product when

taken with alcohol, please conduct additional dissolution testing

using various concentrations of ethanol in the dissolution

medium, as follows:

– Testing Conditions: 900 mL, 0.1 N HCl, apparatus I (basket) @ 200

rpm, with and without the alcohol (see below):

• Test 1: 12 units tested according to the proposed method (with 0.1 N HCl),

with data collected every 15 minutes for a total of 2 hours.

• Test 2: 12 units analyzed by substituting 5% (v/v) of test medium with

Alcohol USP, and data collection every 15 minutes for a total of 2 hours.

• Test 3: 12 units analyzed by substituting 20% (v/v) of test medium with

Alcohol USP, and data collection every 15 minutes for a total of 2 hours.

• Test 4: 12 units analyzed by substituting 40% (v/v) of test medium with

Alcohol USP, and data collection every 15 minutes for a total of 2 hours.

Both test and RLD products must be tested accordingly and data must

be provided on individual unit, means, range and %CV on both strengths.

900ml of

40%

alcohol

is

almost a

full

bottle of

Vodka

Waivers for AIDD dataAn Eu regulatory responses

• Q. Concomitant intake

with alcohol is unlikely

if contraindicated in

labeling. In the unlikely

event of concomitant

intake, the

consequences are not

serious (e.g. the dose

is not different to a IR

dose).

• A: Where incompatibility

with alcohol is evident, it

is currently sufficient to

address safety or other

concerns by the inclusion

of appropriate warnings in

the product literature

unless serious concerns

are raised with respect to

efficacy and safety

Cultural issues are of ever increasing importance

CRO &

CMO

COST

SAVING

CONSOLIDATION

ACQUISITION

ALLIANCES

MERGERS

CULTURAL

ISSUES

Schein’s model of organisational culture

Artefacts, Creations

Technology, Art

Visible and Audible behaviour patterns

Values

Basic Assumptions

Relationships to the environment

Nature of reality and truth

Nature of human nature

Nature of human activity

Nature of human relationships

Three levels of culture

Visible, but not always

obvious, recognized initially, or

associated with values

Generally a higher level of

awareness of what is valued in

the organization

Invisible, not usually stated,

taken for granted

Cultural influences

National

culture

Professional

subculture

Organisation’s

History

Organisationals

ubculture

Generation

culture

How corporate cultures are created

Philosophy of

organisation’s

founders

Philosophy of

organisation’s

founders

Staff

selection

criteria

Staff

selection

criteria

Top

management

Top

management

Social

interaction

Social

interaction

ORGANISATION

CULTURE

ORGANISATION

CULTURE

STRONG

CULTURE

MODERATE

CULTURE

[STABLE]

WEAK

CULTURE

MODERATE

CULTURE

[INTENSE]

STRONG

STAFF

COMMITMENT

TO VALUES

WEAKLOW %age of staff sharing values HIGH

CULTURAL STRENGTH MATRIX

Know what you

are up against

Corporate cultures

• Strong Characteristics

– Conduct business according to a clear, widely-understood philosophy

– Considerable time spent by management communicating and reinforcing values

– Values are widely shared and deeply rooted

– Have a well-defined corporate character, reinforced by value statements

– Careful screening/selection of new employees to be sure they will “fit in”

• Weak Characteristics

– Lack of a widely-shared core set of values

– Few behavioral norms evident in operating practices

– Few strong traditions

– No strong sense of company identity

– Little cohesion among departments

– Weak employee allegiance tocompany’s vision and strategy

Culture change is one of the toughest managerial tasks

Organisational approaches to cultural differences

Minimise frictions from

cultural differences, often

associated with ethnocentrism.

Ignore cultural differences

associated with ignorance.

Identify, appreciate

and utilise

cultural differences.

IGNORE IT

LIVE WITH IT

USE IT

SEMIOTICS-The study of cultural signs

• How is the space allocated?

• Where are the offices located?

• How much space is given to

whom?

• Where are people located?

• What is posted on bulletin

boards or displayed on walls?

• What is displayed on desks or

in other areas of the building?

– In the work groups?

– On lockers or closets?

• How are common areas

utilized?

• What do people write to one

another?

– What is said in memos or email?

– What is the tone of messages

(formal or informal, pleasant or

hostile, etc.)?

– How often do people

communicate with one another?

– Is all communication written, or do

people communicate verbally?

• What interaction between

employees do you see? How

much emotion is expressed

during the interaction?

Take a walk around the building, and look at some of the physical signs of culture.

Cultural Blindness

New partners and new regions

Why cultural factors are frequently considered unimportant

• Globalisation

– McDonalds can do it so anyone can

• Lack of appreciation by Management

– Focus on the merger

– Managers are global and special so don’t see it

– Or they are local and don’t see it

• Cultural blindness

– It is only recently beginning to attract serious attention

Actually McDonalds couldn’t do it

INDIA

• The original launch was in line with a

strategy of “product identity”

• Instantly recognizable with repeat of

previous successes in new

geographies

• A failure until they removed beef and

concentrated on chicken and lamb,

increased dramatically the vegetarian

option-introduced separate cooking

and purchasing for “pure” vegetable

sources

Leadership Across Cultures

• Leadership styles may vary among different

countries or cultures.

– European managers tend to be more people-oriented

than American or Japanese managers.

– Japanese managers are group-oriented, while U.S

managers focuses more on profitability.

– Time horizons also are affected by cultures.

• U.S. firms often focus on short-run efforts and results.

• Japanese firms have a longer-run perspective.

• European firms fall somewhere between the U.S. and

Japanese orientations.

Cultural Blindness

• Cartwright “the rationale as to why Anglo-American

researchers appear to have attached less significance to

national culture than their European colleagues isE.

– Both are individualistic cultures [minimum government

interference]

– Unlike many of the countries in Europe the US and UK do

not have multiple land borders, nor have they seen these

boundaries change significantly over time

– As multicultural societies they are regarded as having

successfully assimilated and absorbed into their

membership individuals from a variety of different national

and cultural backgrounds

Cultural attitude to quality

• An IBM firm in Windsor, Ontario, ordered a shipment of

components from a Japanese firm, specifying the Acceptable

Quality Limit as three defective components for every 10,000

parts.

• In a covering letter from the Japanese supplier to the IBM firm

that accompanied the order the Japanese company explained

how difficult it was to produce the defective parts and said:

– “We Japanese have hard time understanding North

American business practices but the 3 defective parts per

10,000 have been included and are wrapped separately.”

“Hope this pleases.”

Human error behavioural approaches

• Conventional approach

– Processes and SOP’s

– Training

– Environment

• At risk cultures [risk believed to be

insignificant or justified]

– Remove incentives for at-risk

behaviour

– Create incentives for healthy

behaviour

– Increase situation awareness

• Reckless cultures [disregard of

unjustifiable risk]

– Remedial action

– Disciplinary action

An example-Global QA

If you have a global approach

to quality assurance and in

particular QUALITY RISK

MANAGEMENT you cannot

expect to use the same tools

for companies (countries)

that have different risk cultures

Insensitivity to cultural issues

• Executives

– Tend to be international

– Negotiate with other Executives

• Managers

– Professionally experienced but not exposed to other cultures

– If dealing with cross-border alliances this can even affect professional

issues [cGMP US, Eu, WHO, Russia]

– Greatly influenced by local upbringing

• US-perception and individualism

• CEE-Centralisation

• China-Conformity

Some examples of cultural issues during negotiations

• Cancellation of meetings with no apology or explanation

• Failure to understand the sense of time management that

different cultures have

• The habit of communicating with others in a local language;

misinterpreted as a sign of mistrust

• Lack of documentation—most things are kept in the head

Japanese regard the contract only as the beginning of a business

relationship during which the terms of the contract are open for renegotiation

In USA this attitude appears to be completely unethical

The Japanese regard the USA approach as unethical in that they try and

enforce a contract although the circumstances have changed

Communication

Intent v. Impact

SENDER RECEIVER

INTENT IMPACT

Culture,

Gender,

Age,

Education,

Skill,

Experience,

Knowledge,

Style,

Perceptions,

Attitudes,

Culture,

Culture,

Gender,

Age,

Education,

Skill,

Experience,

Knowledge,

Style,

Perceptions,

Attitudes,

Culture,

Communication

• LINGUISTIC– Although the negotiating

language may be common

often it is not the natural

language for either of the

parties

– Sentence construction in

one language can give the

wrong meaning in another

even though the translation

is correct

– Be careful of idiomatic

sayings

• CONSTRUCTION– Direct, clear and precise

• US, German?, Israeli

– Indirect, diplomatic and

reserved• Japanese, British, Indian

– Complex• Slavic

Please

revert

Please send back

your changes,

revisions and

comments

Cultural issues and language

• Training is a prerequisite

of all cGXP systems

• The regulatory authorities

are asking the question

“trained or really trained?

• But what about training

via translation-are you

translator friendly

• Obviously language is significant.

– The return trip (almost uniquely UK

English)

– SOP’s in English in Puerto Ricoh

– Colloquial expressions

– Jokes

• How do you check that your audience

really understands?

– Beware of judgments derived from

observation of physical reactions

• Smiling and nodding are not the same in

all cultures (India, Bulgaria)

MS Word now lists 17 different types of English

Oops

• An advertisement for the

new Executive Director of

the EMA resulted in the

process being delayed

because the translation in

German used the word

Physiker instead of Arzt.

• In a clinical trial on

arthritis in the quality of

life questionnaire

“Shampoo your hair” had

to be changed to “wash

your hair” because both

soap and shampoo were

commonly used in the

country where the trial

was being conducted

Silence

• Japan – acceptable as a moment for serious thought

• Europe – produces a feeling of discomfort

• USA – a sign of disagreement

Significant silence [the call center issue]

It is not just language

• Many western presenters

are told to make their

presentations interactive-

get audience participation

– But actually not all

cultures respond well to

this and forcing this may

well destroy the

atmosphere needed for

effective training

• For example I have found

that in CEE simulations

and role play are not well

received (a possible hang

over from the communist

era)

• “We are very happy to have you and we are excited about your session.”

• “I'm so pleased. Is there anything in particular you would like to discuss tomorrow?”

• No, that is up to you, only, please don't walk in and tell us that you are interested in hearing what we have to say. One of your colleagues from the U.S. always does that.

• We are tired of talking to each other. We want to take advantage of your presence and hear what you have to tell us.

Hofstede’s Dimensions of National Culture

Geert Hofstede™ Cultural Dimensions- http://www.geert-hofstede.com/

PDI-Power distance ratio

The degree to which the less powerful

members of a society accept and expect that

power is distributed unequally. People in

societies exhibiting a large degree of power

distance accept a hierarchical order in which

everybody has a place which needs no

further justification

IDV-Individualism v collectivism

A preference for a loosely-knit

social framework in which individuals

are expected to take care of themselves

and their immediate families only rather

than a preference for a tightly-knit

framework in society in which individuals

can expect their relatives or members of a

particular in-group to look after them.

MAS-Masculinity v femininity

A preference in society for achievement,

heroism, assertiveness and material reward for

success. Society at large is more competitive.

UAI-Uncertainty avoidance

The degree to which the members of a

society feel uncomfortable with uncertainty

and ambiguity.

LTO-Long term orientation

People believe that truth depends very much

on situation, context and time. They show an

ability to adapt traditions to changed conditions,

a strong propensity to save and invest,

thriftiness, and perseverance in achieving results.

0

10

20

30

40

50

60

70

80

90

100

PDI IDV MAS UAI LTO

UK

USA

0

10

20

30

40

50

60

70

80

90

100

PDI IDV MAS UAI LTO

RUSSIA

USA

0

20

40

60

80

100

120

PDI IDV MAS UAI LTO

CZECH

SLOVAK

Hofstede comparisons

0

10

20

30

40

50

60

70

80

PDI IDV MAS UAI LTO

GERMANY

INDIA

0

10

20

30

40

50

60

70

80

90

100

PDI IDV MAS UAI LTO

CHINA

USA

Switzerland

0

10

20

30

40

50

60

70

80

PDI IDV MAS UAI

GERMAN

FRENCH

US training Russian FDA on GMP

• A US partnership made up of Lilly, the Chao

Center and the Parenteral Drug Association

(PDA), has been formed to spread global

manufacturing standards throughout Russia.

– Training will aim to improve Rozdravnadzor’s

[Russian FDA] understanding of good

manufacturing practices

• Officials from Rozdravnadzor and the

Russian Inspectorate will attend hands on

training sessions at manufacturing

simulation facilities at Lilly, the Chao Center

and the PDA in the US.

0

10

20

30

40

50

60

70

80

90

100

PDI IDV MAS UAI LTO

RUSSIA

USA

HOW BIG IS THE PROBLEM?

• How different are the cultures?

• What is the commonality of purpose of the two

companies on the project?

• How non conflictual are the partners?

• How time critical is the project?

And remember both

sides are part of the

cultural divide

KNOW YOURSELF

REMEMBER

IN ANY CONFLICT BETWEEN

CULTURE AND STRATEGY,

CULTURE WILL ALWAYS WIN

How many people can I offend

in the last 5 minutes?

Every nation

has a book to write

about the Elephant

The French book-

1000 ways to cook Elephant

The English book-

Elephants I have shot on Safari

The American book-

How to Make Bigger And Better Elephants

The Japanese book –

How to Make Smaller And Cheaper Elephants

The Greek book –

How to Sell Elephants for a Lot of Money

The German book –

A Short Introduction to Elephants, Volumes 1-6.

The Swiss book –

The Country Hannibal Went Through With His Elephants

The Canadian book –

Elephants: A Federal or State Issue? The Swedish book –

How to reduce your taxes with an elephant.

A stereotypical summary

Heaven– The French are cooks

– The lovers are Italian

– The Police are English

– Everything is

organized by the

Swiss

Hell– The English are cooks

– The Swiss are lovers

– The Police are French

– Everything is

organized by the

Italians

THANK YOU FOR YOUR ATTENTION