At a time when the pharmaceutical industry is confronting many unique business challenges – from patent expiration and cost-effective R&D to accelerating growth in emerging economies – drug companies may be facing the threat of declining trust and even diminished leadership.
According to the 2012 Edelman Trust Barometer, pharmaceutical companies have a leg up on business in general when it comes to public trust, but the numbers are low at 57% and 47%, respectively and trust in pharma is dipping.
The pharmaceutical industry has dropped from 5th to 7th among 11 industries ranked by trust since the 2011 Trust Barometer. Technology companies are most trusted, while the brewing and spirits industry, which has had a consistently lackluster rating, now sits atop pharma at 6th place.
Health engagement is a powerful driver of public trust in business. According to the 2011 Edelman Health Barometer, nearly 8 in 10 people trust a company more if it is effectively engaging in the health of the public. Naturally, companies that market products to diagnose disease, treat conditions or protect people from serious illness are held to an even higher standard.
Over the past year the pharmaceutical industry has lost trust in 12 of 25 markets studied and has gained trust in only three: Australia, Canada and the United States. Despite this silver lining, these trends signal danger for an industry whose growth is increasingly dependent on the establishment of new markets in emerging economies. Below is a look at trust in pharma by country. Trust has dropped in all of the countries considered tier 1 and tier 2 “pharmerging” markets by IMS Health: China, Brazil, Russia and India.
This IMS projection of the likely sources of growth for pharma over the next several years illustrates the importance of these markets, where trust in the industry appears to be on the decline:
Trust through health isn’t just pharma’s to lose. Our data suggest there is a trust/health opportunity for companies not traditionally associated with health and pharma should take note. This chart from the 2010 Edelman Health Barometer shows there is surprisingly little difference between the public’s expectations for pharma compared to other industries, when it comes to contributing to the health of the public:
In this increasingly egalitarian health market, companies – regardless of industry – are not only expected to engage in health, they stand to grow reputation, leadership and ultimately income by doing so.
The trust opportunity in health appears to be intensifying. According to the 15,000-person 2011 Edelman Health Barometer, 82% of the global public believes it is important for business across industries to improve or maintain the health of the public. Nearly 3 in 4 believe business in general should be as engaged in maintaining and improving personal and public health as it is in maintaining and improving the environment.
This is good news for the public as business responds to changing consumer expectations, but suggests a new framework for pharma as other business verticals join, and even lead, the larger conversation about health. The pharma industry runs the risk of being marginalized where it has the deepest expertise and greatest license to lead.
To preserve relevance and grow trust, drug companies must raise the stakes. They must lead in areas beyond research and innovation, areas in which consumers expect performance. For example, pharmaceutical companies can leverage their knowledge and help people act on personal health responsibility through education, deeper engagement around wellness, and partnering with other industries (like technology and communications) to give people tools that not only treat disease but improve quality of life.
When a company makes a difference in people’s lives, trust is a very likely result.