How a brand is perceived matters. It matters to its employees, its customers and its shareholders. Brand reputation is more than a five-star rating on a customer satisfaction survey or likes on a social media posting.
It’s not destroyed by a brief Twitter storm, or a rogue employee. But a bad reputation can spread – from an isolated incident to corporate policy, from a single business to whole sectors.
And when you’re looking at broader reputations, the pharmaceutical industry has taken a beating for some years. It’s not quite been up there with the tobacco or gambling sectors for toxicity, but the general impression has been one of greed and exploitation with constant media scrutiny of ‘rip-off’ drug prices taking their toll on the sector’s reputation. These companies that extend and save lives, do not get the credit they deserve, because of their own missteps.
In the US controversy over exploitative drug prices are seen as proof of a failing private model and contributing to the problems of this increasingly expensive and inefficient system. Over-patenting has been cited as a strategy used by some pharma companies to maintain monopolies on medicines, and so remove competition in terms of pricing.
It’s not surprising that some US politicians – particularly among the Democrats – are calling for new legislation to be brought in to rein in pharmaceutical company greed. The recent opioid crisis in the US further cemented its reputational problems. This has centred on pharmaceutical companies reassuring the medical community in the late 1990s, that their opioid pain relievers were not addictive for patients. The resulting increased prescribing by healthcare providers led to widespread misuse of both prescription and non-prescription opioids. A public health emergency was announced in 2017 when the full extent of how addictive the medicines were became clear.An estimated 40% of opioid overdose deaths involved a prescription opioid.
But the coronavirus crisis has changed the landscape. A health crisis like no other, it has given pharmaceutical brands the opportunity to recast themselves from pariahs to champions. Capitalising on this opportunity to regain trust will require pharmaceutical companies to shift their balance from profit to people, provide more transparency in all they are doing, and speak as one brand, not just a collection of individual corporate products.
As the world searches for a vaccine and effective treatment for COVID-19, governments have leaned on pharma brands, giving them the chance to demonstrate the best of themselves. Innovation and exploration have meant pharmaceutical, biotech and life science companies are at the vanguard of helping the world come out of this healthcare emergency.
There has never been an equivalent rush to find a vaccine in our generation, one that has engaged most pharmaceutical brands in collaboration and partnerships with universities, governments and each other.
The recent news pointing to the so far successful trials of a vaccine being developed by Oxford University and AstraZeneca has been particularly promising. But this is just one of many studies taking place around the world to try and counter the devastation of COVID-19. This collective endeavour has the potential to show just how pioneering the sector is and the positive brand value of that innovation.
The potential for this crisis to reset the reputation of brand pharma has not escaped the businesses themselves. Eli Lilly’s chief executive, Dave Ricks, said at the company’s first-quarter results conference in April that the industry had a “once in a generation opportunity to reset” its image.
Jeremy Levin, chairman of the industry association BIO and chief executive of Ovid Therapeutics, echoed similar sentiments in the Financial Times: “We went from having been a political piñata in January to a recognition, at least in the minds of many policymakers, that this is an industry that we must support.”
And this isn’t just about vaccines, hundreds of businesses are also looking at antivirals and other medicines that might prove to be viable treatments.
For instance, Gilead’s antiviral drug remdesivir – initially developed to treat Ebola although it ultimately proved unsuccessful – was quickly repositioned and used as a therapeutic treatment for coronavirus patients with promising results.
At the start of the pandemic in the US, Gilead’s chief executive, Daniel O’Day, announced that the company would give 1.5 million doses of remdesivir free to patients for compassionate use. As time went on, and its usefulness as a treatment became evident, O’Day addressed head on, the thorny issue of setting the price for the drug.
He said the company would set the price below what would have normally been determined with its existing pricing policy, which is based on the value the treatment provides. This was in part, to ensure it remained affordable for countries with lower purchasing power and avoid country by country price negotiations.
This level of transparency will be an important step in helping brand pharma’s reputation – but Gilead’s pricing plan immediately drew fire from advocacy groups saying the $2340 price tag for a five-day course was too expensive.
Balancing investor pressure and public expectations is a dilemma many sectors experience, but it’s never been more critical than in the pharma industry right now. In terms of public approval, the industry is improving considerably. According to a survey from The Harris Poll in mid-May, 40% of Americans have a more positive view of the industry than they did before the pandemic began.
Seventy percent of those surveyed said the main reason for their positive feelings were the vaccine development work (58%) followed by their efforts to develop and find treatments (56%).
Positive sentiment toward pharmaceutical brands was highest among urban dwellers (49%), and Gen Z and millennials (44% each). Among those who viewed pharmaceutical brands negatively – about 16% of Americans – it was most likely because of the affordability of drugs (53%).
Brand reputation is also important for shareholder value and the turnaround for brand pharma has had an impact. Investors currently view pharmaceutical companies positively and while many businesses have seen their share prices plummet over the past few months, pharma has done better. The S&P 500 pharmaceuticals, biotech and life sciences index has outperformed the broader S&P 500 index this year, while the Nasdaq biotech index has done the same.
There is no doubt that the coronavirus pandemic has created an opportunity for pharmaceutical brands to recast themselves. The public views them as important allies in responding to the crisis – pharmaceutical companies were cited as second most important, after national government, in responding to the crisis.
Pharma can begin a new conversation with the world – including consumers, payers, regulators and healthcare professionals.
The race for COVID-19 treatments means they can regain their equity as inventors and innovators, solving the world’s biggest problem. Instead of being cast as greedy corporate giants, out to exploit the ill and infirm, they are currently closer to being seen as a national service, able to show the positive value of innovative thinking.
Whether the pharmaceutical companies can maintain this positive brand reputation momentum remains to be seen. A lot will depend on both their success in finding treatments and a vaccine – but possibly more will depend on their pricing. For instance, Johnson & Johnson has said if its vaccine proves successful, it will be produced on a not-for-profit basis.
Pricing will remain the thorniest of issues – especially as countries take on huge debt to keep their economies afloat through this crisis. The work pharmaceutical brands have done to overcome an inherent scepticism toward them must be nurtured and built on, for if countries’ health services are crippled under the weight of huge drugs bills they will lose all that they have gained in terms of reputation.
By: Barry Silverstein
Source: Pharma Times
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