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What Can Pharmaceutical Companies do to Feel Better About Reputation?


Pharmaceutical Executive

Reputation Institute study finds that the reputation of pharma companies is in decline and might get worse before it gets better.

Meghan Burke

The pharma industry’s reputation is in decline. According to Reputation Institute’s (RI) most recent study, the reputation of pharma companies might get even worse before it gets any better. This year, RI conducted research on the reputation of the US pharma industry among the informed general public-that is, those who identified as somewhat or very familiar with the measured companies they were asked to evaluate. The study took place in January and February of 2018. It included 22 nominated companies and was comprised of a sample based on 2,608 individual ratings.

What did the study reveal in the wake of a challenging 18 months for the healthcare industry and following recent increased scrutiny of pharma companies?

There is a significant erosion of trust, fueled by a nation and pharma industry that’s under reputational duress.

The decline in reputation of the pharma industry can be attributed to the erosion of underlying trust and a growing culture of corporate criticism. Versus the same period in 2017, the reputation of all companies among the US public dropped 3.7 points. This decline was at the same rate of decline as the US pharmaceutical industry, indicating a new era of growing scrutiny and skepticism of pharma companies. The resultant impact is a freefall in overall levels of support, with a 13% drop in trust and 14% decline in benefit of the doubt for pharma companies in the US.


But what’s a pharma company to do to turn things around, increase trust, and ultimately enhance reputation?

Here are nine prescriptive reputational insights for the pharma industry:

  • Drive depth of understanding. Only 20% of prompted respondents were familiar with pharmaceutical companies and could proceed with RI’s study. With such low familiarity, the messaging pharmaceutical companies want to convey is ineffective because purpose goes unrecognized. Instead, public perception is controlled by other forces-including the media-when judgments are made about the industry. A first step to drive depth of understanding is increasing familiarity.

  • Prioritize governance. This year, governance has moved up to the single most important driver of reputation for the pharmaceutical industry, surpassing both products/services and citizenship. And yet, pharma scores lowest on governance. If the pharmaceutical industry wants to see any reputational lift, it must focus on ethics-60% of respondents are unsure as to whether pharma companies exhibit good governance.

  • Manage profit and purpose. The pharma industry is perceived as being profitable, showing strong prospects for growth and delivering financial results better than expected; it scores highest on these attributes. However, financial performance is what the public has the least concern for when evaluating reputation; it has the lowest impact on score. In contrast, the public values good governance-behaving ethically, openness and transparency, and fair business practices-with high importance. When combined, these attributes have the largest impact on pharma reputation. Yet, this is where they continue to score the lowest. When reaping the benefits of profit, the pharma industry must understand the value of managing its purpose.  

  • Tread carefully on pricing. The attribute, “offering products/services that are a good value for the money,” weighs heavily for pharma reputation, with a 6.5% impact on score-clearly it is an important factor to the public. Willingness to buy has dropped 8% since 2017, as the price of medication continues to outweigh perceived value.

  • Celebrate your corporate brand. Purpose-driven pharma companies with enhanced brand strength have a higher reputation score than those without. Across the pharma industry, brand strength has decreased by 5.1 points during a time when being purposeful is more important than ever. Linking products to corporate brand is one way to enhance reputation.

  • Be authentic and relevant. Authenticity, transparency, and openness in pharma companies’ corporate brand communication has seen significant declines this year, averaging a 14% decrease. As these scores drop, less people find pharma companies’ messaging and purpose pertinent; only 30% of people think pharma companies communicate in ways relevant to them.

  • Seize your narrative. Owned media-any media a company releases about itself that is not paid advertising, such as newsletters, website, reports, press releases, or social media posts-has both low reach and low reputation impact. Earned media-any media a company generates from others, such as news, buzz on social media, or word of mouth by family and peers-has mid-reach but zero reputational impact. If pharma companies want to improve their corporate narrative, they must prioritize increasing reach and impact for both owned and earned communication.

  • Unlock Gen-X opportunity. Those between responders 45-64 years old, especially Gen-Xers, report the highest willingness to buy from pharmaceutical companies at 48% out of all age brackets. Yet, Gen-X has the second-lowest levels of trust and benefit of the doubt for pharma, outweighed by Gen-Z, ages 18-24.

  • Get credit for being “good.” The pharma industry creates medications that save lives-the University of California Berkeley Center of Demography reports that US life expectancy has increased 62% from 1900-1998. Much of that can be attributed to drug and antibiotic aid. Yet, 52 percent of respondents are on the fence as to whether pharma companies have a positive influence on society. Pharma companies must illustrate their role as good corporate citizens to gain recognition for the work they’re doing.


US Pharma RepTrak® 2018: How Do Companies Compare?

It’s not all bad news. There are winners and losers in the category within the US, with some pharma companies such as Sanofi, Genentech, and Celgene outperforming the competition to earn a strong reputation.

By way of example, what did Sanofi do to out-perform pharma industry competition?

Sanofi wins on ethics and good governance: CSR is integral to its purpose

Sanofi tops the list as the most reputable pharmaceutical company in 2018, with a strong score of 74.6-that’s 7.7 points higher than the pharma industry as a whole. Sanofi has the highest scores in products/services, openness/transparency and supporting good causes, which is reflected in both their public communication of their mission and in their Corporate Social Responsibility (CSR) model. Its website highlights the company’s commitment to ethics and transparency, outlining the proactive steps they are taking to decrease animal testing, introduce integrity modules and audits, and publish clinical trial results for the public to view. Its CSR model has three components: planet, people, and ethics-a progressive shift from traditional models, which highlights financial responsibility instead of ethical behavior. Sanofi’s proactive actions are delivering real reputational results.

Sanofi’s commitment to transparency and focus on ethical governance is what the top-ranked pharma companies worldwide convey in their mission. This is no coincidence. Reputation points directly to what matters most to drive positive change.


Meghan Burke is a research analyst at Reputation Institute.


RI announced it's annual US pharma RepTrak ratings here

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