Social Media and Inherent Risks in the Pharmaceutical Industry


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What we understand today as “social media” has been with us for about a decade now. And the use of Facebook, Twitter, YouTube, and LinkedIn, to name but a few, has been embraced by enterprises for various business purposes from the very beginning. Besides research and development, human resources, and sales, one of its major areas of application is marketing. Big companies from many sectors benefit from building strong customer relations and, thus, brand recognition by means of social media.

Present Use of Social Media and its Risks

While many industries like consumer goods or banking have been making extensive use of social media for some years now, the pharmaceuticals sector lags behind for the most part. Thus, forgoing a powerful tool to boost their businesses. With the rapid spread of mobile internet devices such as smartphones and tablet computers the importance of social media applications as a major source of information for consumers is bound to grow.

By now, hundreds of millions of people and businesses around the world have connected via social media applications and built huge networks at low cost. They generate, share, and consume content that is spread in the twinkling of an eye. Such social dynamics can gain huge momentum and are hard to control. Once a piece of content goes viral, one better hopes it rebounds to one’s advantage. Particularly, since the internet doesn’t forget.

This inherent reputational risk is not the only risk in social media engagement enterprises need to take into account when developing a successful social media strategy. Those risks are manifold and can be divided into risks of a corporate social media presence itself and risks induced by the use of social media by employees.

Among the former, there is the risk of data leakage and identity theft by means of viruses and malware introduced into the corporate network. Likewise, customers or the enterprise can get publicly exposed through a hijacked or fraudulent organizational presence. This may result in adverse legal actions, customer backlashes, phishing attacks on the concerned parties and reputational damage. Poorly defined content rights to posted information pose the risks of the company’s loss of control and legal rights of the posted information. Moreover, a move to a digital business model can increase customer service expectations possibly leading to customer dissatisfaction with the responsiveness in the introduced social media channels. Fines and regulatory sanctions as well as adverse legal actions are risks posed by mismanagement of digital communications, which can be effected by retention regulations or electronic discovery.

In addition to those risks of a corporate social media presence, there are a number of risks posed by the use of social media by employees, which need to be taken into account when building up an integrated social media risk management. Among those are the risks of privacy violations, damage to corporate reputation, and the loss of competitive advantage, in case personal accounts are used to post work-related information. Employees who publish content, which relates them to the company, can pose one more potential source of damage to the brand or corporate reputation. Likewise, the risks of network utilization issues, productivity losses and increased exposure to viruses and malware can arise through the excessive use of social media applications in the workplace. And furthermore, the access of employees to social media with company-supplied mobile devices can pose the risk of infections, data theft and leakage, and the circumvention of company controls.

Those are a lot of risks, one may argue. But there is one more significant risk that every enterprise faces, which tinkers with the idea of missing out on taking advantage of this powerful instrument, and that is the risk of opportunity costs. The question is not whether or not to engage in social media. The question is which tools from this versatile set of social media applications best support the business purposes, and how it can be managed in a manner that guarantees that potential risks are being outweighed by material benefits.

Social Media in the Pharmaceutical Industry

For several years enterprises from various sectors have gained experience in this area. In collaboration with research institutions, associations, and consulting agencies, they have developed specific safeguards. Such measures include corporate strategies, frameworks, policies, as well as awareness trainings communications for employees, vendors, and customers, which address and mitigate potential risks. And, thus, empower enterprises to profit from engaging in social media.

The relative reluctance of the pharmaceuticals industry may have prevented it from some teething troubles or other in the past. But it definitely prevents enterprises in the sector from taking huge opportunities.

Of course, the pharmaceuticals industry is different from other sectors. Safety and quality management, risk management, marketing, and other areas of operations play a more crucial role than in other sectors. And the enterprises are object to strict laws and regulations and close monitoring. Some of this relative reluctance in the application of social media is certainly due to the legal and regulatory environment. In this field of regulatory compliance in the US, for instance, further clarification on the use of social media in the sector may facilitate a catching up. The US Food and Drug Administration (FDA) made a move in addressing this by its January 2014 publication of a Draft “Guidance for Industry Fulfilling Regulatory Requirements for Postmarketing Submissions of Interactive Promotional Media for Prescription Human and Animal Drugs and Biologics” (for comment purposes only).

This draft FDA guidance is “intended to describe FDA’s current thinking about how manufacturers, packers, and distributors (firms), that may either be the applicant or acting on behalf of the applicant, of prescription human and animal drug and biological products (drugs) can fulfill regulatory requirements for postmarketing submissions of interactive promotional media for their FDA-approved products.

While such initiatives towards further clarification in the area of regulatory compliance are welcome and may be helpful, not all enterprises have waited to engage social media applications for their business purposes. A couple of enterprises are pioneering. Among them is big fish – realizing the huge potential of this dynamic set of tools.


To allow for such engagement to fully and sustainably strengthen the company’s competitive position and satisfy stakeholder interests it is crucial to adequately address and prioritize inherent risks, develop an integrated social media strategy, and implement effective and efficient safeguards.

 Guest Author


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