In the past few years, the pharmaceutical industry has been experiencing unprecedented declines in corporate reputation, mainly because of some companies’ association with the opioid crisis and high drug prices.
However, new studies have shown that pharma is experiencing a reputational boost as the coronavirus pandemic highlights its role in developing medications and vaccines. A recent Harris Poll survey shows pharmaceutical's reputation is holding strong: 40% of Americans have a more positive view of the pharma industry than they did before the pandemic began.
Pharmaceutical Reputation - A Narrative Shift in the Media
To analyze how this shift in corporate reputation has been reflected in the media, we used our proprietary reputation analytics framework ComVix, which uses advanced AI to track almost 500 news-reported business categorized into 18 overall reputation drivers, which represents the most granular taxonomy of reputation drivers developed to date.
A key component of our model is uncovering the sentiment at scale, i.e. uncovering the sentiment associated with each individual construct (e.g. company) within each article.
We base our quantitative measure of corporate reputation on Net Promoter Score (NPS), calculated as the difference between positive mentions and negative mentions per company, to arrive at ComVix Reputation Index (CRI). Just like NPS, CRI ranges between -100 and 100, with positive results generally deemed good, and CRI of +50 deemed excellent.
We selected a sample of 10 pharma companies: Abbvie, Amgen, AstraZeneca, Eli Lilly, Gilead, GSK, Johnson &Johnson, Merck, Novartis, and Pfizer, and used CRI to compare their media reputation during the first phase of the COVID-19 pandemic (March-November 2020) to the same period last year (March-November 2019).
We found that the overall reputation index of these companies has jumped from 4.55 in 2019 to 13.89 in 2020, suggesting that the media has indeed started to report more favorably of pharma’s work.
Innovation and Partnerships: Pharma's Main Reputation Edges
The biggest contributor to pharma’s improved reputation was the “innovation” driver, whose share of voice more than doubled (based on the ComVix analysis of 670 public companies in the healthcare sector).
The focus on innovation could also mean that pharma companies might adopt a similar story arc to some of the strongest technology brands - such as Apple.
Moreover, the PR efforts to give pharma CEOs a larger share of voice in the media at a time when COVID-19 dominates the headlines could get them near the celebrity status of tech CEOs.
The emphasis on innovation and the eventual success of the vaccines in 2021 could finally help the industry to deal with the criticism that it is too slow to bring novel medicines to market.
Apart from “innovation,” the other most prominent contributor to pharma’s improved reputation was “partnerships and alliances.”
Our previous research into the relationship between corporate news flow and stock market reactions shows that the stock market responds in a positive manner to news about strategic partnerships in the pharmaceutical industry, reflecting the market’s immediate response, and expectations of future firm value resulting from the partnership. The degree of the market’s response varies in terms of the client firms’ absorptive capacity with new product introductions being the strongest driver.
Emphasis on CEO Communications
Another interesting shift is pharma’s focus on CEO communications as a means to bolster corporate branding and reputation, with news mentioning the CEO of the ten companies in our sample more than doubling in volume.
Companies such as Pfizer, AstraZeneca, Gilead and Merck are bolstering their CEOs’ presence in the media to explain their approach to producing drugs and vaccine trials. As a result, these CEOs have all now made it to the top 50 of the most visible CEOs, which would have been highly unlikely before the pandemic.
It is interesting to note that while the pharma sub-sector dominated the overall healthcare COVID-19 media coverage (77% of all news was about pharmaceutical companies), its share of voice in the news about partnerships fell to 56% at the expense of the biotechnology and health services sub-sectors.
How Can Pharma Comms Teams Capitalize on These Changes?
Here are ways communications teams can capitalize:
- Drive depth of understanding: The prevailing media coverage of the pharmaceutical industry hurts its ability to communicate with their stakeholders and convey what they are doing, and how they are improving the quality of life for millions of people.
- Balance profit and purpose: Pharma companies are succeeding in areas the public has less concern for - financial performance – and failing in areas the public values the most- governance and ethics.
- Prioritize the corporate brand: When speaking about corporate reputation in the pharmaceutical industry, it is usually not the products that prompt people to say positive or negative things about a company, but rather people’s perception of the company formed by past experience or media coverage. Corporate branding is particularly important in the pre-launch phase of a product brand as both healthcare professionals and the media are likely to pay attention to companies they prefer over others.
- Own the corporate narrative: Pharma companies should better manage owned and earned media so as to own their corporate narratives and move the media debate forward in the desired direction.
- Adopt an FMCG approach to disease branding: As pharma companies are increasingly becoming more involved in campaigning and CSR, adopting a communications approach usually practiced by FMCG companies currently distinguishes the more progressive ones, which display firm commitment to achieve their business goals through more campaign-based activities rather than just simply pushing out press releases.
This is a guest blog by Alan Walker, Senior Consultant at Commetric.