To state the obvious, health care is a complicated business.
Every health-related topic is at once a financial matter for the companies involved, an economic issue for society, and an intensely personal topic for patients and their families.
A survey of US investors conducted by Brunswick Group underscores this point, while also suggesting how successfully navigating this complexity creates opportunities and minimizes executive headaches.
This is the second year Brunswick Group has conducted this survey, and the trend is clear: Pharmaceutical companies must better communicate and justify their pricing models, or they will face backlash from both regulators and investors.
Here’s a deeper dive into the numbers:
- 24% of investors believe that health care is innovating too slowly and needs to move more quickly. This is five (5) points greater than last year.
- 80% agree that “currently, the health care industry is lagging behind companies in other industries when it comes to developing and marketing meaningful innovations.” This is a six-point increase.
- 87% agree that “unless companies in the pharmaceutical sector can better justify their drug pricing models, the industry will face harsh regulations that will harm innovation and profitability.” This represents a seven-point increase from last year’s survey.
- The vast majority of investors (85%) believe that “when a pharmaceutical company is being scrutinized over its drug pricing, it makes me less likely to consider investing in that company.” This high percentage remains consistent with the prior survey.
- In the sharpest increase from last year’s survey, 65% believe that the Trump administration will implement stricter regulation on drug pricing. This represents an 11-point jump in investors’ views of the issue.
Looking ahead to the presidential election, Brunswick Group asked a first-time question about its impact on the life sciences sector, and 52% of investors believe the 2020 election will produce more intensity on drug pricing and pharmaceutical regulation than past elections.
Taken together, these survey results describe a sector in which communications clarity is a business imperative. In this environment, telling a compelling story around the process and benefits of innovation, as well as the price and value of therapies, is every company’s responsibility.
There are no words that will address all your critics’ concerns. Nevertheless, that’s why data-driven messaging delivered through consistent stakeholder engagement will help companies achieve the optimal position, for investors and other stakeholders.
Investors are just one stakeholder group in the health care landscape, but their concerns are important to register and address. Often, they’re a leading indicator of other critical parties’ concerns, such as lawmakers and regulators.
For a complete copy of Brunswick Group’s survey, or to contact Brunswick’s healthcare experts, please click here.