Earlier this month, APCO Worldwide released its findings from its third annual State of the U.S. Biopharmaceutical Industry study noting key shifts in the reputation of the industry through its Return on Reputation (ROR) Indicator. The ROR Indicator is an outcome-focused study developed by APCO Insight, APCO Worldwide’s research group, and takes a holistic, quantitative approach to reputation management.
APCO surveyed roughly 4,625 healthcare opinion leaders, providers, policy-makers and payers to explore the U.S. biopharmaceutical industry. The study identified 28 critical drivers of reputation (validated through advanced statistical analysis) to examine how key stakeholders evaluate the industry, as a whole, and more than 20 specific companies in the biopharmaceutical sector. The analysis focuses on alignment, which uncovers the extent to which stakeholders perceive the industry (and its constituent companies) to be meeting the expectations that matter the most. Moreover, the study shows companies what the “Return on Reputation” could be—that is, the bottom-line impact reputation has on a company or industry with key stakeholder groups.
Overall, APCO’s findings show that the biopharmaceutical industry has made great strides in improving its reputation across a number of drivers since data collection first began in 2010. The industry’s core strength remains defined by its commitment to Safety & Efficacy, i.e. the threshold requirements on which the industry remains well aligned including assurance of product quality, safety and transparency. Also, ensuring the integrity of its products through reliable manufacturing is a fundamental requirement with which the industry is currently perceived to be performing well.
Yet, the greatest opportunity for the industry to further enhance its reputation lies in addressing evolving expectations for Innovation. While the industry continues to receive strong, positive ratings on Innovation drivers, stakeholders now expect the industry to contextualize their story by better describing both the outcome of their Innovation (defined in our model as Bold Advancements) and the method of their Innovation (labeled as Sustainable Innovation). These stakeholders expect that there should be completely new cures and treatments, not incremental changes on existing medicines. And, this is especially true in the growing field of personalized medicine where expectations are growing for targeted therapies that offer better efficacy and reduced side effects.
Moreover, the industry is expected to be forward-looking by seeking efficient, novel ways to create durable financial models that will invest in new, collaborative research. Indeed, key stakeholders’ expectations are expanding in ways that ask the industry to redefine the ways they approach Innovation. It is not about promoting near-term pipeline depth, but long-term strategies that will continuously deliver new cures and treatments that improve health outcomes and reduce overall healthcare spending. Our research suggests that one way biopharmaceutical companies can achieve this is by participating in public-private partnerships to fund research and development of new treatments.
Along these lines, the industry also faces an expectation to create the medicines of tomorrow that answer key public health challenges. The industry has an opportunity to improve its reputation by reminding key stakeholders how its efforts contribute to the betterment of public health. Public Health Leadership expectations address key stakeholder desires for the industry to engage in addressing critical public health challenges by providing solutions that help manage and raise awareness of serious and chronic disease, not merely market their commodity. Additionally, expectations are growing across stakeholder audiences to demonstrate the clinical benefits of specific therapies over alternatives. In this context, addressing public health priorities means justifying health outcomes and cost impact, not just putting products on the market—and opens the door for the industry to begin collaboration with regulatory partners earlier in the research process.
The ROR Indicator reveals that improvements in reputation have a statistically significant, quantifiable impact on key business outcomes, such as consumer behavior, prescribing behavior, community activism, government policy, the litigation environment and financial return. In fact, with a one-point increase in the biopharmaceutical industry’s Reputation Index Score, companies can expect the following results:
- Nearly a million more patients will ask their doctor about a company’s medicine.
- Average increase in sales by 0.2%.
- An additional 201,140 community activists will actively advocate on behalf of the industry.
- More than 1.6 million additional Americans are likely to give the industry the benefit of the doubt when crises arise.
- The proportion of policy-makers who support the industry on most policy proposals increases by more than 1%.
- Market capitalization increases by more than U.S. $20 million for the average biopharmaceutical company.
When considering the influence on business outcomes, the drivers and opportunities written above become even more salient priorities for the industry. Advanced analysis reveals statistically significant relationships exist where alignment with expectations positively shapes critical business outcomes. As the industry continues to meet Safety & Efficacy expectations, physicians are more likely to prescribe particular medicines, patients are more likely to recommend particular medicines to others and the industry is more likely to gain the benefit of the doubt when crises emerge. Moreover, Innovation and Public Health Leadership drivers also influence positive patient behaviors—that is, willingness to recommend to others or ask a doctor about a particular medicine. Alignment with Innovation expectations also drives an increase in the number of community activists who will advocate on behalf of the industry, while improvement regarding Public Health Leadership will increase levels of policymakers’ support for the most important policy issues facing the industry.
Implicitly, we all know that a corporate reputation affects a company’s business environment and ultimately, market capitalization—ROR Indicator quantifies this element. Meeting the expectations of stakeholders is a business imperative that corporate communication executives and their CEOs should take seriously, especially when research presents an opportunity for greater improvement and ultimately greater business. Companies that don’t take this seriously risk missing the greater opportunity to claim the advantage and move the industry forward.
