About a year ago, there was no business sector as disliked in the US as the pharmaceutical industry.
According to a yearly Gallup survey conducted in September 2019, 58% of Americans held a negative view of the sector. Only the federal government, disliked by 52% of those interviewed, was anywhere close. This was the worst perception of the pharma industry ever recorded since the annual survey was introduced in 2001.
At the time, Gallup suggested there were two causes of such public antagonism to pharmaceutical companies—their role in the opioid crisis, and high drug prices. Addressing those issues, the firm said, would be key to building back any lost reputation.
But when the same survey was administered this September, the results were quite different. The percentage of responders with negative views of pharmaceutical companies fell to 49%, and 34% expressed a positive view, up from 27% in 2019.
It could hardly be otherwise—if the world is going to make it out of the Covid-19 pandemic that has stolen 2020, it’s going to be because of the work of pharmaceutical companies. Approval of drugmakers has likely gone up throughout the rest of the world, too, and even more so since the announcement of the first successful vaccine candidates in November.
“With the world in dire need of Covid-19 drugs and vaccines, the biopharmaceutical industry has a once-in-a-generation opportunity to reset its reputation,” said Eli Lilly’s CEO, Dave Ricks in April, during a second-quarter earning’s call.
Indeed, in the span of a year, the reputation of pharmaceutical companies has gone from being primarily associated with ruthless entrepreneurs, or money-hungry executives, to being providers of health, savers of lives.
According to data shared with Quartz by RepTrak, formerly the Reputation Institute, a Boston-based reputation intelligence firm collecting over a million ratings a year, as of Sept. 30, pharmaceutical companies climbed in several indicators of brand reputation compared to last year.
For an industry that invests enormously in marketing—in the US, more than on research and development—Covid-19 vaccines have provided a unique opportunity. According to brand reputation specialist firm Caliber, which publishes a yearly Global Pharma Study tracking public perception of pharmaceutical companies in 17 countries, Covid-19 is reminding the world why we need drugmakers.
Through the year, the firm has tracked the consumers’ “trust and like” score, which CEO Shahar Silbershatz says is the best overall proxy of how consumers will behave toward a brand. It found that after an initial improvement, the scores declined in the middle of the year, as the public grew impatient waiting for a vaccine and disappointed in other treatments available. It picked up again significantly, however, as companies got closer to delivering a vaccine, and then when announcements of successful trials were announced last month
The first and obvious benefit will go to makers of the vaccine. Think about Moderna, for instance, a little-known, relatively new company that rose to global fame in association with its mRNA vaccine for Covid-19. Being associated with a revolutionary drug (or vaccine) can have a long-term benefit on establishing a brand, although that is much more likely to happen for ubiquitous goods that consumers use in their daily lives. Aspirin, for example, was instrumental in making Bayer the giant it is now.
But this benefit is probably going to be limited, as it’s unlikely consumers will think too much about the individual companies that brought them to the end of the pandemic, since they won’t have a direct connection with the brand. “Most consumers walking around in the streets don’t know what companies make their drugs; they are hearing a lot of names now [in the news] but they aren’t directly in a relationship with [these brands],” says Ben Isgur, the head of the consultancy firm PwC’s Health Research Institute.
Indeed, the pharmaceutical industry is a sector where there is a strong “lack of differentiation”, which means buyers hardly distinguish individual brands, but rather think of the industry as a whole, says Silbershatz.
Still, vaccine makers have been at the center of news cycles and consumers have been able to see the direct link between the investments in research and development and outcomes, which has caused some reputation improvement for the companies at the forefront of the vaccine race. This, says Silbershatz, is likely more relevant for large companies such as AstraZeneca and Pfizer, which had a worse reputation than, say, Moderna prior to Covid-19, simply because they were better known and had been around longer. For these companies, better goodwill could translate into deliberate consumer preference, which is especially valuable as they produce a broad range of other products, too.
Belonging to an industry that suffers from a lack of differentiation in consumers’ minds has big disadvantages when the reputation of the entire sector worsens, because it ends up affecting even the companies that might behave better than the rest. On the other hand, the entire industry gets a boost from a big breakthrough. This is what has happened with Covid-19: A handful of drugmakers have lifted the reputation of a whole sector.
Coronavirus gives pharmaceutical companies an incredible opportunity to show that they had an important role in society. Not just for a niche group of patients, as it’s the case when drugs are used for a single disease, but the entire world. “It’s unique because we’re singularly focused on the pandemic and it’s truly affecting everyone and we’ve seen how it affects the economy as well,” says Isgur.”It makes it easier for policymakers, consumers, and payers to really see that connection between the value of the research and the innovation, and what it can do for us.”
Consumers are also a lot more informed about the works of drug companies now than they were prior to the pandemic. This, Silbershatz, is a positive for the pharmaceutical industry, which has a better reputation in countries where patients are forced to know more about it, for instance, because their trust in local health systems is low and they are more engaged directly with drugmakers.
There is no guarantee that the reputation benefits associated with Covid-19 will continue in the long term. For one thing, there is a risk that the fast success of vaccine development might set high expectations, leading to frustration if other treatments don’t come with the same urgency, or even as they wait for their Covid-19 immunization. Or they might forget about the good that drugmakers delivered in the fight against coronavirus as they continue to confront the high prices and lack of accessibility for other drugs.
In its analysis, RepTrak has seen that the reputation of the pharmaceutical industry is increasingly determined not just by their product, but by what the firm calls “governance and citizenship.” It isn’t just that their medications are considered trustworthy that matters, but elements such as pricing, corporate behavior, or ethical practices matter significantly to the consumer, reflecting on the brand value.
This is an area, Caliber noted in its analysis, where the industry needs to improve—without reform of their practices that establish long-term trust with consumers, the advantages of delivering a Covid-19 vaccine would be lost, and with good reason.