1. Prepared by Prophet
THE FUTURE OF PHARMA PROFITABILITY LIES
IN BUILDING CORPORATE BRANDS
May 2013

2. Interested in learning more? Visit www.prophet.com/healthcare
Pharma corporate brands need
to be the next big consumer brands
Product Marketing ROI
is Declining
Blockbuster drugs are the
lifeblood of current business
models, but they are becoming
less pervasive as many go
generic in the major disease
categories and across global
geographies.
GENERATE A MEANINGFUL
MARKETING ROI
Pharma Corporate Brands Have
Poor Corporate Reputations
According to Prophet’s Corporate
Reputation research, other
corporations with strong
reputations have been able to
leverage their corporate brand to
offset declining product brand
efficacy. This opportunity has
historically been closed to pharma
given their poor corporate
reputation.
RECLAIM YOUR CORPORATE
REPUTATION
Pharma Can Corporate Own the
Drivers of Strong Reputations
The drivers of corporate
reputation are the same ones
that drive product sales. They
align well with pharma’s core
capabilities and there is a
significant opportunity to build a
corporate brand around them.
OWN THE DRIVERS OF A
STRONG REPUTATION
#1

3. Interested in learning more? Visit www.prophet.com/healthcare
The era of major blockbuster product brands
efficiently driving portfolio growth is over
Given marketplace realities, regulatory pressures and global consumer demands, pharmaceutical
companies must reimagine their growth drivers.
FDA new drug approvals have
declined from previous highs
Generics now account for
3 of 4 pills dispensed
Overall pharma and biotech
R&D spending is declining as
a percentage of global sales,
and is projected to keep
decreasing
R&D SPENDING AS A
% OF WW BRANDED
RX SALES
FDA APPROVALS GENERICS
0%
5%
10%
15%
20%
25%
2008
2010
2012
2014
2016
2018
0
10
20
30
40
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
0
20
40
60
80
2005
2006
2007
2008
2009
2010

4. Interested in learning more? Visit www.prophet.com/healthcare
16 Emerging economies that speak 13 different languages
will command 1/3 of global medicine sales by 2016
The era of major blockbuster product brands
efficiently driving portfolio growth is over

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LEADING CORPORATIONS HAVE UNCOVERED
THE INEFFICIENT REALITIES OF PRODUCT
BRANDING AND HAVE MOVED TO INVESTING IN
THE MASTER BRAND TO DRIVE BROADER
PORTFOLIO CONSIDERATION AND LOYALTY.

6. Interested in learning more? Visit www.prophet.com/healthcare
Cisco spent a decade acquiring and
marketing new product
technologies, many of which had very
strong brands, including
Linksys, WebEx, IronPort, Jabber and Flip
Video.
To drive greater marketing ROI, the
company stopped investing in the product
brands and instead began focusing
attention on the corporate brand and
using product family names, which has
improved efficiencies of marketing
investments.
Corporations in other categories have begun to shift
focus from product brands to master brands

7. Interested in learning more? Visit www.prophet.com/healthcare
Corporations in other categories have begun to shift
focus from product brands to master brands
P&G, most famous for its house of brands
and for being a leader in consumer
packaged goods recently began shifting
investments to link their corporate brand
to a higher purpose.
After sponsoring the 2010 Winter Olympic
Games, P&G saw $100MM in incremental
sales, achieved their highest aggregate
U.S. market share, increased corporate
brand awareness, increased product
brand recall by 30%, and achieved
greater long-term equity with the
target, moms.

8. Interested in learning more? Visit www.prophet.com/healthcare
THE RESULTS OF PROPHET’S ANNUAL
CORPORATE REPUTATION STUDY* RANKS
PHARMACEUTICAL COMPANIES** AS BARELY
AVERAGE IN THEIR OVERALL CORPORATE
REPUTATION.
EVEN FAST FOOD COMPANIES OUT RANK
PHARMACEUTICAL COMPANIES IN
CORPORATE REPUTATION.
*Prophet’s corporate reputation study evaluated 150 companies among 5,300 consumers
**Includes Abbott Laboratories, Sanofi-Aventis, Eli Lilly, Pfizer, and Merck

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Historically, this approach has only been open to
industries with strong corporate reputations
72 71
68 67 65 64
60 60 60 59 58 57 57
53
48
AverageStrong Poor Failing

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Ironically, the top drivers of reputation are ones
that align well with pharma’s capabilities
The reputation drivers that drive both reputation and purchase are intuitively ones that pharmaceutical
companies can and should perform well on, but at present do not.
30
40
50
60
70
80
90
7.8
7.9
7.9
8.0
8.0
8.1
8.1
8.2
8.2
8.3
8.3
Attribute weight Pfizer Abbott Laboratories
Merck Sanofi-Aventis Eli Lilly
Pharmaceutical Industry Performance:
Top 3 Drivers of Reputation & Purchase
Attribute Weight
<60 – Poor/
failing
performance
Is a company whose
products and services make
a difference in my life
Is a company that
inspires me
Gives me peace of mind
>70 – strong
reputation
Performance Scores

11. Interested in learning more? Visit www.prophet.com/healthcare
Building a corporate brand and improving corporate
reputation will drive product sale conversion and loyalty
Consumers are twice as likely to
purchase, pay more for and recommend
products and services from a company
with a leading reputation versus a
failing one
Companies with leading reputations
convert customers from considering a
product or service to purchasing products
or services 90% of the time
40% of the key reputation
drivers overlap with purchase drivers
All 100% of key reputation
drivers overlap with recommendation
drivers
Companies with failing reputations
convert customers from consideration to
purchase less than 60% of the time

12. Interested in learning more? Visit www.prophet.com/healthcare
We have developed a proven three-step approach to
building a strong corporate brand and reputation
To build a strong corporate
brand, you must begin with a
rich understanding of all the
stakeholders in the complex
pharma environment and
uncover beliefs, motivations
and attitudes.
Using the new consumer
insights as the foundation, you
must next build a strategy that
intersects with competitive
landscape realities and your
businesses assets, capabilities
and strategy.
Finally, the corporate brand is
brought to life across a series of
signature activation touch
points so that identity becomes
real, differentiated and relevant
in the eyes of key stakeholders.
BUILD THE
CORPORATE BRAND
STRATEGY
UNDERSTAND
THE PHYSICIAN
AND PATIENT
ACTIVATE THE
CORPORATE
BRAND

13. Interested in learning more? Visit www.prophet.com/healthcare
Interested in learning more? Please contact:
Michael Petromilli Achim Wirtz
Senior Partner Partner
(312) 878-4927 +41 44 218 7819
mpetromilli@prophet.com awirtz@prophet.com
Jeff Gourdji Paul Schrimpf
Associate Partner Associate Partner
(312) 878-4929 (312) 878-4931
jgourdji@prophet.com pschrimpf@prophet.com
www.prophet.com/healthcare