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For Struggling Pharmaceutical Industry, Reputation is Key to Stronger Business Outcomes

New Study by APCO Worldwide Examines Reputations of Major Pharmaceutical Companies

Washington, D.C. (January 24, 2012) – APCO Worldwide released today the findings of a new reputation-management study for the pharmaceutical sector, the second in a series of studies using the company's proprietary Return on Reputation research model. Developed by APCO Insight® in 2010, this outcome-focused methodological tool helps companies better understand and address the expectations of key stakeholders in order to protect, enhance and track their reputations over time.

"Companies in the pharmaceutical industry have been beset by a wide range of unique challenges that affect public confidence and the ability to remain competitive in the marketplace," said Robert Schooling, global head of APCO's health care practice. "From concerns about product safety and quality to evolving expectations for addressing chronic disease, cost of health care and the future of innovation, stakeholders expect, now more than ever, that pharmaceutical companies remain trusted and leading corporate citizens."

Based on quantitative research from more than 3,000 respondents, including health care providers, policy-makers and health care opinion leaders, the model measures the effect of overall reputation on a number of specific business outcomes, including: consumer behavior, prescribing behavior, community activism, the policy environment, the litigation environment and financial value. The results reveal that with a one-point increase in the pharmaceutical industry's reputation:

  • An additional 28,000 patients ask their doctors about a company's medicine
  • Sales for the average pharmaceutical company increase by 3.33 percent
  • An additional 83,000 community activists actively and vocally advocate on behalf of the industry
  • The proportion of policy-makers who support policies favorable to the industry increases by half a percentage-point
  • More than 5.7 million additional people are likely to support and defend the industry when crises arise
  • Market capitalization increases .23 percent for the average pharmaceutical company

"APCO's definition of reputation is driven by stakeholder expectations – not a single measure of an ambiguous term. The results of this study clearly indicate that the reputation of pharmaceutical companies has a measurable impact in improving the business environment, including increasing sales and market capitalization," said Bryan Dumont, president of APCO Insight. "These findings provide a distinct roadmap for how the industry effectively enhances its most valuable asset."

APCO also uncovered core drivers that have the greatest impact in shaping and improving a pharmaceutical company's reputation. One key opportunity is in demonstrating leadership in addressing the growing problem of chronic disease. Policy-makers, health care providers and patients all expect the industry to play a more prominent role in helping the country better manage chronic disease and to partner with the public health community in promoting disease prevention.

Affordability and product pricing are perennial reputational challenges for the pharmaceutical industry. Across stakeholders, affordability emerges as the industry's single weakest-performing driver. A growing expectation for the industry is transparency around drug pricing. Pharmaceutical companies can make a meaningful impact on business success by educating policy-makers and the public on the main causes related to the cost of medicines and by demonstrating how medicines decrease health care costs overall.

"APCO's study shows that managing reputation by meeting stakeholders' myriad expectations for pharmaceutical companies is more than merely ‘doing the right thing,'" said APCO Founder and CEO Margery Kraus. "This demonstrates that aligning company values with societal expectations impacts how patients and physicians behave, underpins support for key policy issues that matter to the industry and ultimately shapes shareholder value."

APCO Insight plans to use the Return on Reputation Indicator tool to survey additional industries in the future. For more information about Return on Reputation Indicator and for detailed results of the pharmaceutical study, please visit http://www.apcoworldwide.com/content/viewpoints/reputation/pharma/index.html.

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About APCO Worldwide

Founded in 1984, APCO Worldwide is an award-winning, independently owned global communication consultancy with offices in major cities throughout the Americas, Europe, the Middle East, Africa and Asia. Headquartered in Washington, D.C., APCO clients include corporations and governments; industry associations and nonprofit organizations; and six of the top 10 companies on the Fortune 500. APCO offers services related to business, industry and finance; media, public opinion and society; and government and public policy. The firm is a majority women-owned business. For more information, please visit www.apcoworldwide.com.