New Study Quantifies the Value of Pharma Brands

Zach Brooke
Marketing News Weekly
Current average rating    
Key Takeaways
​​What?new report conducted by health branding agency InterbrandHealth measures the value that brands alone provide pharmaceutical companies.

So what? The report shows that brand value can actually help a company perform better than its market cap.

Now what? Health brands need to emulate the ways the top pharma brands are performing. Companies that consistently rely on their product-level communication and their products to do the heavy lift on an ongoing basis are going to see themselves behind the gate.

April 25, 2016


Role of brand is 57% more likely to influence a recommendation compared to two years ago

A new report conducted by health branding agency InterbrandHealth measures the value that brands alone provide pharmaceutical companies. Called Best Pharma Brands , the report is a ranking of the top 10 pharma brands, quantifying the corporate brand’s contribution to business performance in the biopharmaceutical industry.

According to the study, brand value is a single measure of the brand’s contribution to business results. Brand valuations were determined by a financial analysis of the brand in business results, the influence a brand has on customer willingness to recommend and measured brand performance relative to the competition.

The study does not look at the strength of individual product brands. Rather, it’s an assessment of the overall corporate brand as a drug manufacturer.

The pharma brand with the highest value is Pfizer, with an estimated brand value just shy of $20 billion. In second place is The Roche Group, with a brand value of approximately of $15.5 billion, and they followed by five brands in spots three through seven with valuations in the $13 billion range.

“If you line up market capitalization next to the brand rankings, there are three or four that actually rose relative to the market cap,” says InterbrandHealth CEO Jane Parker . “Pfizer’s not the top of market cap, but it is the top in role of brands. Other companies were lower in market cap, but because of the strength of their brand, they actually were higher in their brand rankings and I would say that, to us, was the revelation.”

The fact that some labels are over performing relative to their market capitalization number could mean that cap has room to grow. “What we’re seeing is those companies that understand how to utilize their corporate brand and how to create a corporate brand that is compelling will continue to lead the pack,” Parker says.

Another notable finding is the role that brand plays when influencing recommendations. When weighed against other factors, such as product efficacy and safety, product formulation, other product features and/or reimbursement, the role of brand was found to be the determining factor in a recommendation 11% of the time. This figure represented a 57% jump from 2013 and is what Parker identifies as the report’s biggest takeaway.

“The brand decision, the corporate brand, if you will, is responsible for 11% on a revenue basis,” Parker says, noting that the number is below other product categories like cars and tech, but adds that “what, to me, is the most important thing is that it’s increasing year after year.”

While those valuations are certainly good news for the pharmaceutical companies, the new study strikes a cautionary note when discussing shifts in the market and future of pharma, emphasizing that this a critical time to expand public brand perception “beyond the pill,” in the words of the study.  

“I think that those companies that consistently rely on their product-level communication and their products to do the heavy lift on an ongoing basis are going to see themselves behind the gate,” Parker says. 

Best Pharma Brands Ranking

• #1 Pfizer (USD $19.985 billion)

• #2 Roche Group (USD $15.479 billion)

• #3 Merck & Co., Inc., Kenilworth, N.J., U.S.A. (USD $13.880 billion) [Note: MSD outside of the United States & Canada]

• #4 Janssen: Pharmaceutical Companies of Johnson & Johnson (USD $13.866 billion)

• #5 Novartis (USD $13.496 billion)

• #6 Amgen (USD $13.461 billion)

• #7 Gilead Sciences (USD $13.361 billion)

• #8 Novo Nordisk (USD $10.206 billion)

• #9 AstraZeneca (USD $8.123 billion)

• #10 GSK (USD $6.778 billion)


Author Bio:

https://auth.ama.org/publishingimages/zack_bio.jpg
Zach Brooke
Zach Brooke is a staff writer for the American Marketing Association. He can be reached at zbrooke@ama.org
Add A Comment :
 

Become a Member
Access our innovative members-only resources and tools to further your marketing practice.