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Restoring Pharma's Reputation


A 2019 study reveals further marginal decline in the pharma industry's reputation. Sven Klingemann suggests some "recovery solutions".

Sven Klingemann

It’s no secret that in today’s regulatory and political climate, pharmaceutical companies in the US face a wide variety of challenges, not the least of which is building and maintaining a strong reputation with customers, investors, regulators, and influencers-the people who matter most for their growth and prosperity. 

According to the results of the Reputation Institute (Ri) 2019 US Pharma RepTrak® study, here’s a glance at what the US pharma industry must manage and mitigate on a daily basis:

  • Continued public and regulatory scrutiny regarding highly publicized drug costs.

  • The media’s attachment to the role and responsibility of pharma companies in the opioid crisis and its perceived focus on profit vs. societal benefit. 

  • Financial pressure in China to US trade tariffs.

  • Widespread workplace diversity gaps.

How has the US pharma industry fared in 2019 from a reputation perspective? 

After a steep decline in reputation-the emotional connection that stakeholders share with companies-from 2017-2018, most industries have experienced a recovery, though not a return to previous reputation highs. 

From 2018 to 2019, Ri saw a partial industry-wide reputational recovery with an average industry reputation increase of 2.2 reputation points, resulting in a 2.9% increase in strong public support, especially with respect to intending to buy from or recommend companies as well as consider them as potential employers and investment opportunities.

The pharma industry, by contrast, has seen a further marginal decline in 2019, losing an additional 0.6 reputation points. Pharma and automotive are the only two industries to experience a reputation decline. 


Change in US Industry Reputation Scores from 2018-2019


From a company-perspective, our results reveal that only two pharma companies, Bayer AG and Roche, earned a “strong”reputation score in 2019. Most companies fall into the “average”range, with only one earning a “weak” reputation score. On average, non-US-based pharma organizations were ranked higher, including the two ranking at the very top of the industry in 2019. 

So, now what? Reputational recovery solutions for pharma

As the industry will continue to be under the microscope of the general public, as well as investors and legislators, we only expect pressures on pharma companies’ reputations to grow. Every single step or misstep may come under increased scrutiny. But what can the industry do to start turning around its fortunes and build a buffer against future reputation risks?

Historically, pharma has suffered from some of the lowest familiarity levels across all industries-something that we also see in 2019. To address this, industry players must become more successful at reaching key audiences across a wide variety of channels. This is critical in order to (a) take control of the dominant industry narrative; (b) convert stakeholders who are undecided on whether to fully support pharma companies; and (c) to ultimately increase reputation.

US pharma companies need to continue leveraging improved performance perceptions about their products, innovative efforts, and financial performance and stability while highlighting the direct importance and relevance these have for consumers.

Finally, the biggest opportunity for US pharma companies is to educate and convince stakeholders that pharma is acting in an ethical and transparent way not merely for its own benefit, but for the good of individuals and society at large. This is especially relevant as companies’ perceived performance has declined on these strong drivers of reputation year-over-year, contributing to a stalled reputation recovery for the industry as a whole.

Sven Klingemann, Ph.D, is a Research Director at Reputation Institute.

US Pharma RepTrak® Methodology

This year’s US Pharma RepTrak® Study-conducted annually by Reputation Institute (Ri)-is based on close to 1,900 individual ratings across the largest and best-known pharma companies in the US. To be included as part of the study, which was conducted from January-February, respondents had to be familiar with the pharma companies they were asked to evaluate and to have an informed opinion regarding the state of their reputation. 


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