Images: Anthony Blass

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Elizabeth Hernandez tellsMARK O’BRIEN that global pharmaceutical companies must reach out to governments if they are to deliver the right solution to Asia’s healthcare ills

When GlaxoSmithKline, the global pharma-ceutical company, went looking for a

government affairs specialist to head up its Asia operations, it recruited Elizabeth Hernandez, a US-educated Filipino who joined a “modest team with ambitious goals”.

“When I came on board four years ago,” she says, “it was virtually a team of one. I was the first dedi-cated government affairs specialist in Asia Pacific for GSK. By contrast, we now have over 20 professionals in our regional government affairs network.”

At that time, she reveals, most of GSK’s government affairs work in Asia was handled by executives who came from other functions within the company, such as communica-tions, legal or regulatory affairs. “They inherited the government affairs portfolio,” she adds.

When Hernandez arrived in 2005, GSK stepped up its dedicated govern-ment affairs in Asia, investing heav-ily in the function at the regional headquarters in Singapore as well as in its country offices. Hernandez joined from the US-ASEAN Business Council, a Washington DC-based trade organisation. As she got into the role, GSK began expanding the team further by recruiting some of its best internal commercial talent and putting them through rigorous train-ing in stakeholder management and advocacy. The company also recruited outside candidates who added critical public policy or public affairs exper-tise to a fledgling discipline.

Hernandez lists her experience negotiating with Asian governments and NGOs as crucial to her role – but also identifies strong communica-tions skills and proven management expertise as key. She says the ability to develop a virtual team across a very diverse region is critical for a compa-ny seeking to build consensus around an emerging function in Asia Pacific.

“Government affairs is an uneasy

commitment for many companies,” she says, “because the results are of-ten difficult to itemise or measure, at least in terms of P&L impact. One of my first challenges internally was to demonstrate to our general manag-ers that proactive government affairs helps ensure market access, minimises risks and supports the company’s business objectives.”

Whilst she admits it took time, Hernandez eventually won over her colleagues and reinforced the management’s commitment to the function. She credits both of her regional vice presidents – Thyagi Thy-agarajan, who hired her, and Christo-phe Weber, who replaced him upon his retirement – for recognising the threats and opportunities associated with Asia’s diverse and changing political land-scape. Both, she says, understood the critical role government affairs would play in GSK’s future in the region.

“Thyagi understood the need for strong influencing skills,” she says. “He encouraged the general manag-ers to become actively engaged with governments directly and through the local industry associations.”

In an unusual move, Thyagara-jan in 2005 took all of the GSK gen-eral managers from South East Asia for a week long trip to Washington DC, where he set up meetings with a variety of officials, including the US trade representative and congress-men. They learned about intellectual

property rights and free trade agreements and the value of direct engagement. “It really opened their eyes,” Hernandez says, “and they be-gan to see how government affairs could contribute to the business”.

Weber, she says, has taken GSK’s government affairs commitment to a new level. As the former CEO of GSK in France, where the govern-ment was its number one customer, Weber needed no convincing about the importance of proactive engage-ment. “When we first met, he told me that in France he spent about 40 per cent of his time in meetings with government officials and politicians.”

Hernandez says he continues to make himself available for govern-ment meetings, even when other commitments appear to be crowding his diary. In August 2008, for exam-ple, GSK was invited to speak at an ASEAN meeting on pandemic flu in Siem Reap, Cambodia. It was a tech-nical meeting with CDC directors. GSK’s medical director was confirmed as a speaker, but, Hernandez says Weber understood the importance of “face time” in Asia and re-arranged his travel schedule to be on hand, even though he had no specific role. “He interrupted his family holiday just to be there,” she says.

Hernandez insists her boss’s com-mitment goes well beyond face time, however. The most visible contri-bution to government affairs is his

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GSK’s Elizabeth Hernandez: Good people and on-goingdevelopment are central to public affairs success

sponsorship of GSK’s Asia Pacific Mastery Programme for Government Affairs, an 18-month executive education pro-gramme that Hernandez developed in partnership with the Centre for Corporate Public Affairs in Australia and the Lee Kuan Yew School of Public Policy in Singapore. “It’s an inten-sive programme with 15 different modules, and a significant investment for the company,” she says.

The programme kicks off in Shanghai in late January with 18 candidates from Asia Pacific. “These candidates are already some of our best talent at GSK,” adds Hernandez. “We want to raise their game even further.”

In some companies, Hernandez believes, government af-fairs is synonymous with crisis management, about putting out fires and mitigating turmoil. But she insists that GSK has placed value on day-to-day vigilance, long-term planning and pro-active engagement in the policy environment. “It’s not just lip service with them,” she says. “They recognise there is a price to pay, an investment in personnel and a commitment beyond the latest quarterly results.”

She repeats the words of CEO Andrew Witty who believes that engaging with governments and other stake-holders, and to earn their trust, is part of GSK’s “license to operate”. When Witty took the top role in 2008 one of his key themes was building trust with society. Hernandez insists that the Asia Pacific leadership team has been quick to adopt the trust agenda.

“Our corporate leadership in Europe knows that growth in our industry, particularly in Asia, is not always about hir-ing more sales people or developing a new blockbuster drug, although that certainly helps,” she says. “But in order to en-sure growth, you need to make certain you don’t backslide in areas where you have already established a beachhead and that requires vigilance in government affairs.”

Hernandez notes that nearly 99 per cent of all GSK rev-enues in Asia are directly or indirectly controlled by individual governments. “They decide the rules and set the standards,” she says. “They determine what is allowable and what is not allowable. If we don’t engage pro-actively and professionally, our business is imperilled. We have to get it right.”

Part of GSK’s strategy is to build up its team of talented insiders, people who have worked with and for government ministries around the region. These are people, she says, who understand the nuances of country-specific issues and who offer an insider’s perspective that has helped shape GSK’s public affairs agenda.

“We now have a combination of resources that we rely on,” she says. “We have seasoned professionals with global experience and ministry veterans with an insider’s view. It’s an invaluable combination, and it helps GSK form policies

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and objectives that guide us for the long-term. We are much less reactive than we used to be.”

Since Hernandez joined the pharma giant, she says GSK has adopted a public affairs model in Asia which relies on a regional strategy, with an emphasis on local execution. It is based upon the leadership example of the global management, but it also needs people on the ground. Hernandez points to Charlie Butcher, as one of the most important hires during her GSK tenure.

She says Butcher’s skill set is unique to GSK in Asia. He brings a combination of public and private sector ex-perience in government affairs, beginning his career as a press secretary and policy adviser to politicians in Aus-tralia during the 1990s before joining the public affairs firm Burson-Marsteller. Butcher brings to GSK govern-ment affairs experience in Singapore, Beijing and Hong Kong, among other outposts.

“Charlie works closely with our country teams on prod-uct advocacy strategies and implementation,” Hernandez says. “At many companies in Asia, government affairs is still

a part-time function, handled in the margins by communi-cations or regulatory folks. We have the luxury of devoted professionals such as Charlie to expand our advocacy work.”

Despite the deep bench at GSK, key challenges remain. “The Asia Pacific region is widely diverse,” says Hernandez. “From country to country, the issues are radically different, even though there are issues, such as access to medicines that are common to all countries. But there’s no ‘one-size-fits-all’ approach that will accommodate the needs of everyone, so we rely on our local specialists to do the heavy lifting, to provide guidance to us at the regional level and to enhance our dia-logue on the ground with individual governments.”

One major challenge, she says, is to articulate mean-ingful alternatives when governments adopt or threaten to adopt policies that GSK believes are counter-productive to a country’s long-term health care regime. Often these issues are politically sensitive and are spearheaded by groups “with populist agendas”. In order to influence policy in these situ-ations, Hernandez says it is often critical to secure the sup-port of a local advocate, such as the health ministry, a key hospital, a patient-advocacy group, or even an NGO.

“Successful public affairs begins with good people, a com-mon goal that is mutually beneficial and a full understand-ing of the issues, from all perspectives,” she says. “That’s the price of admission. From there, we expand our stakeholder base. We identify the people or groups who have a stake in the outcome and we include them in the dialogue.”

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Elizabeth Hernandez was in conversation with PublicAffairsAsia’s vice president Mark O’Brien

“Successful public affairs begins with good people, a common goal that is mutually beneficial and a full understanding of the issues. That’s the price of admission”