One of the world’s richest and most powerful American pharma associations, having an equally strong indirect global presence, apparently, expects all concerned to give an emphatic affirmative answer to the above question.
Vindication of this thought gets reflected in the self-description of the association claiming, it “represents the country’s leading innovative biopharmaceutical research companies. Our members are devoted to discovering and developing medicines that enable patients to live longer, healthier and more productive lives. New medicines are an integral part of the health care system, providing doctors and patients with safe and effective treatment options, and improving quality of life.”
Nearer home, the reverberations of the same could be felt when Novartis lost the Glivec patent case in the Supreme Court of India. At that time, the Wall Street Journal quoted Eric Althoff – a spokesman of Novartis saying, “If innovation is rewarded, there is a clear business case to move forward. If it isn’t rewarded and protected, there isn’t.”
In sync with this self-belief, all pharma trade associations, located across the world, intensely lobbying for the ‘research-based’ global drug companies, together with their individual members, also expect the stakeholders to believe, as if, innovation is the middle name of the pharma industry. This process continues unabated, though, is expensive, and costing millions of dollars every year.
This core intent of doing so, may well be a statement of fact to some, and a contentious one to many, for various reasons. Be that as it may, as the proof of the pudding lies in eating, it is worth ferreting out how successful these efforts have been with the consumers of pharma products. Do they generally buy this concept, and if not, why?
In this article, I shall try to explore the overall scenario in this area.
A recent study:
A recent study results released on June 12, 2017, based on a survey on this issue, and that too conducted in the homeland of pharma innovation – America, brings to the fore a startling fact. In the absence of any other, better and more credible recent study, I shall draw upon some relevant facts from this report.
Klick Health Health – reportedly one of the world’s largest independent health marketing and commercialization agency headquartered in Toronto, Ontario, conducted this survey. As the agency reports, this is an online omnibus survey, conducted between May 19 and May 21, 2017 among 1,012 randomly selected American adults. The margin of error is +/- 3.1 percent. To ensure that the findings are representative of the entire adult population of America, the results have been statistically weighted according to education, age, gender, region, and ethnicity. Discrepancies in or between totals are due to rounding, the report says.
Consumer perception on pharma innovation:
Some of the major findings on consumers’ perception regarding the innovativeness of the pharma industry, are as follows:
- Consumers do not believe that healthcare-related industries are particularly innovative today.
- Only 17 percent of consumers polled perceive pharmaceuticals & biotech, health & wellness, and hospital sectors as the most innovative, ranking in the 4th place after consumer electronics (72 percent), telecommunications (87 percent), and media & entertainment (90 percent).
- Among health-related industries, respondents ranked health & wellness first in terms of the industry that should be the most innovative (17 percent), quickly followed by pharmaceuticals & biotech (14 percent), and hospitals (9 percent) trailing behind the top 5.
Some other interesting findings:
On innovation and technology, general consumer perceptions are as follows:
- 91 percent of consumers believe that innovation will positively impact health care over the next five years.
- 90 percent of respondents say that technology will have a positive impact on their health in the future.
- 70 percent believe that technology will have the biggest impact in helping them personally manage their own health.nology
- Top five technologies predicted to have the biggest impact on people’s health in next five years:
- Health and fitness wearables (21 percent)
- Robotics (15 percent)
- 3D printing (10 percent)
- Smart home devices (9 percent)
- Artificial intelligence (9 percent)
- The survey reflects a shift in the consumer mindset from being passive recipients of healthcare to more active and autonomous individuals who appear eager to try more creative and innovative approaches to managing their health.
Another study reflects a similar perception:
Similar negative perception gets reflected in the January 17, 2017 Harris Poll, which reported only nine percent of American consumers believe that pharma and biotechnology drug makers put patients over profits.
January 17, 2017 Harris Poll, while comparing consumers’ perception among different entities in the health care space, found that only insurers have an overall worse reputation than the pharmaceutical industry.
An important area worth exploring:
When consumers do not perceive the pharma industry as innovative as the sector wishes to be, what could possibly be its reasons? While that could be a part of another discussion, it is worth exploring another important area in this article – Do the majority of global pharma CEOs have desired background to lead innovation?
Do the majority of global pharma CEOs have desired background to lead innovation?
This is yet another interesting question. A research article titled “Many CEOs Aren’t Breakthrough Innovators (and That’s OK)”, published in the Harvard Business Review on September 04, 2015 discussed this issue, well-supported by some interesting research data, while coming to a logical conclusion.
The authors indicated that they looked at the background and performance data of 297 CEOs leading the largest companies in three different industries which are widely regarded as innovative: pharmaceuticals, high-tech, and fashion retail. The data captured a 20-year period, from 1995 to 2014 (and includes both current and former CEOs).
The study highlighted, though innovation is widely regarded as important to long-term business performance, CEOs of big pharmaceutical companies, are more likely to have a background as company lawyers, salespeople, or finance managers than in medicine or pharma R&D.
A direct comparison of the same, with the other two industries in the study, which are also widely regarded as innovative, vindicates the above point, as illustrated in the following table:
|
CEO Background |
Pharma (%) (85 CEOs) |
High-tech (%) (137 CEOs) |
Fashion Retail (%) (75 CEOs) |
| Specialist background to lead innovation |
26 |
61 |
60 |
| Industry experience in other management function, e.g. Sales, Production |
48 |
33 |
29 |
| Background in support functions, e.g. Finance, Legal |
26 |
6 |
11 |
In this study, the researchers found that, for pharmaceutical industry CEOs, there is a statistically significant relationship between a CEO’s specialist background and the firm’s performance. A specialist background to lead innovation is worth a 4 percent better shareholder return every year for 20 years, compared to other pharma CEOs in their sample.
Innovations are mostly ‘me-too’, so is the consumer perception:
As the above article reiterates, shorter patent lives of prescription drugs mean companies must continually look for not just any new drugs to fill their pipelines, but more often with breakthrough ones, which are significantly better than what’s already on the market.
Further, the article titled “How to Revive Breakthrough Innovation in the Pharmaceutical Industry”, which is linked to publications on ResearchGate, also indicates, over more than two decades, therapeutics discoveries of pharmaceutical companies more often than not yielded compounds that are only marginally better than existing therapies, rather than breakthrough molecules.
This could well be another contributing factor in the general ‘not so positive’ consumer perception about the global pharma industry, today.
Conclusion:
There may not be a hell of a lot of argument on the fact that the drug industry has a consumer perception problem today. Even the August 2016 Gallup Poll rated pharma as one of the worst industries in the current times.
Is the collective internal effort of continuously trying to associate innovation with the global pharma industry, the right answer for the same? May be, may well be not, though, the global drug industry is incessantly trying to project, as if ‘innovation’ is its middle name, as it were.
Is it working? The obvious answer is available from various recent research studies, as enumerated above. Still, in January 2017, reportedly to rescue the image of its member companies, the Pharmaceutical Research and Manufacturers of America, unveiled a campaign, again basically focusing on innovation, called “Go Boldly.” It reportedly tries to communicate that the pharma industry develops life-saving medicines, and that they help keep medical costs down, because new medicines often reduce hospital stays and chronic illnesses. Is the campaign cost intensive? – Of course, yes. Is it productive? – possibly not. But who cares?
Be that as it may, today’s health care consumers perceive the global pharma industry neither as innovative nor caring, despite all its efforts. Thus, there is an important need for the pharma players to effectively bridge this perception gap in different and more innovative ways.
However, all that one can witness today, is the global pharma industry charting the same beaten path, yet again – with no further innovation in its communication – neither in content nor in its delivery platforms. That said, only time will be able to tell, whether similar efforts, renewed again and again, can reverse the consumer perception on pharma – making it seen as highly innovative and a caring industry for all.
By: Tapan J. Ray
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.