Despite blistering criticism over its pricing, the pharmaceutical industry managed to improve its reputation last year, albeit very slightly, according to a new survey released this week. Using a formula that relies on ranking several different attributes, the industry received a passing grade of 67.6, a modest two-point improvement.
“These results show that the industry is not perceived as badly as many industry insiders think,” said Kasper Ulf Nielsen, an executive partner of The Reputation Institute, a consulting firm that conducted the ranking, in a statement. But he also noted perceptions are “very polarized,” since one-third of those asked said drug makers have an excellent reputation, but another third view their reputation as weak or poor.
Indeed, the findings are released amid ongoing controversy over the cost of prescription drugs, an issue that has caused outrage in the United States and become a talking point in the presidential campaign. The turmoil has served as a stark counterpoint to the upbeat headlines about innovative new therapies that can combat such hard-to-treat diseases as hepatitis C and some cancers.
Despite the uptick, the results also mark the fourth consecutive year that the largest drug makers earned only an average rating, which was based on seven attributes – innovation; leadership; performance; governance; citizenship; workplace; and products and services. Moreover, the pharmaceutical industry is also falling behind other industries when it comes to reputation.
Of course, there are variations among countries. Industry reputation was highest in the US. The survey, which was conducted earlier this year, queried more than 23,000 people in 15 countries that represented a mix of the largest economies and emerging markets, including the US, the United Kingdom, France, Germany, Italy, Russia, Canada, Spain, Brazil, China, Mexico, South Korea, Japan, India, and Australia.
Overall, consumers thought the companies were doing better when it comes to the quality of products and services, as well as financial performance. But an industry weak spot is being a good corporate citizen, which is another way of describing a company that behaves ethically and is transparent in its dealings. These rankings mirror the results of 2014’s survey, by the way.
“When industry insiders read the news, they think everyone is out to get them,” Nielsen told us. “But actually, stakeholders see a more mixed picture… One problem is there’s a disconnect on citizenship. The companies talk about being patient-centric, but it’s a corporate communications program and may not make them stand out as companies that want to engage.”
While all of the companies are perceived rather similarly, the highest ranking went to Bayer (BAYRY), which commanded the top spot last year, as well. However, it is worth noting that less than five points separates the German drug maker from Pfizer (PFE), which ranked last among the 14 large drug makers that were included in the survey. The previous year, Novartis (NVS) garnered the worst reputation.
Pfizer was ranked last when respondents were asked which drug makers were honest, sincere, trustworthy, and socially responsible. These results may reflect the many negative stories about Pfizer’s desire to avoid paying corporate taxes in the US, a motivating factor in its failed effort to acquire Allergan (AGN). The US Department of Treasury changed its rules, which caused Pfizer to ends it plan.
At the same time, most respondents did not view Pfizer as arrogant, aggressive, and selfish. But more than a fifth of those queried did describe Merck, Sanofi (SNY), Allergan, and AbbVie (ABBV) that way.
Overall, 14 drug makers were selected for the survey. Besides those already mentioned, the list included Allergan; AstraZeneca; Bristol-Myers Squibb; Eli Lilly; GlaxoSmithKline; Novo Nordisk (NVO), Roche (RHHBY), and Sanofi. We should note Johnson & Johnson was not included in the survey because consumers identify the health care giant as much more than a company that sells prescription drugs.