Transcript Harris Interactive`s Strategic Health PerspectivesSM (SHP)

The Public Perception of the Pharma, Biotech and
Device Sectors
A Special Report Prepared for the Pharma Colloquium
June 8, 2005
Katherine Binns
Senior Vice President, Health Care and Policy Research
Harris Interactive
www.harrisinteractive.com
©2004, Harris Interactive Inc. All rights reserved.
The Reputation QuotientSM (RQ)
Social
Responsibility
Emotional
Appeal
Supports Good Causes
Environmental Responsibility
Community Responsibility
Feel Good About
Admire and Respect
Trust
Vision &
Leadership
Products &
Services
Market Opportunities
Excellent Leadership
Clear Vision for the Future
Reputation
REPUTATION
Outperforms Competitors
Record of Profitability
Low Risk Investment
Growth Prospects
Rewards Employees Fairly
Good Place to Work
Good Employees
Financial
Performance
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Workplace
Environment
High Quality
Innovative
Value for Money
Stands Behind
The Annual RQ 2004 — The reputations of the most visible companies
"In Business Ranking, Some Icons Lose Luster"
The Wall Street Journal, November 15, 2004
Rank 1 - 15
RQ
Rank 16 - 30
RQ
Rank 31 - 45
RQ
Rank 46 - 60
RQ
1. Johnson & Johnson
79.81
16. The Walt Disney Company
74.03
31. Sears, Roebuck, and Co.
70.06
46. Gateway
62.27
2. 3M Company
79.07
17. Starbucks Corporation
73.68
32. Best Buy Co.
69.15
47. ChevronTexaco Corporation*
62.22
3. The Coca-Cola Company
78.90
18. Target Corporation
73.25
33. McDonald's
68.56
48. Altria Group
60.58
4. The Procter & Gamble
Company
5. United Parcel Service (UPS)
78.26
19. Anheuser-Busch
Companies
20. Hewlett-Packard/Compaq
73.17
34. Apple Computer
68.26
49. AT&T Corporation
60.23
73.16
35. General Motors Corporation 68.18
50. AMR Corporation
60.13
78.24
(American Airlines)
6. Microsoft Corporation
78.00
21. Southwest Airlines
73.08
36. Verizon Communications
67.71
51. Sprint Corporation
59.63
7. Sony Corporation
77.95
22. General Electric Company
72.66
37. J.C. Penney Company
67.56
52. Tyco International, Ltd.
59.35
8. FedEx Corporation
77.49
23. Unilever
72.55
38. Ford Motor Company
65.64
58.36
72.54
39. DaimlerChrysler
65.21
53. Martha Stewart Living
Omnimedia
54. Bridgestone Corporation*
(Parent of Ben and Jerry's)
9. General Mills
77.42
24. Pepsico
58.08
(Parent of Brigestone/Firestone)
10. Honda Motor Co.
76.15
25. IBM Corporation
71.77
40. SBC Communications
65.05
55. Alticor* (Parent of Amw ay)
54.63
11. Intel Corporation
76.10
26. Pfizer
70.97
41. Citigroup Incorporated*
64.10
52.61
12. Dell Computer Corporation
76.00
27. Nike
70.57
42. Time Warner Inc.
63.89
56. Adelphia Communications
Corporation*
57. Kmart Corporation
13. Toyota Motor Corporation
75.59
28. Wal-Mart Stores
70.56
63.56
58. Halliburton Company
50.25
14. Lowe's*
75.43
29. American Express
Company*
30. The Boeing Company
70.47
43. Bank of America
Corporation
44. ExxonMobil Corporation
63.09
59. MCI (formerly Worldcom)
43.53
45. Allstate Corporation*
62.46
60. Enron
29.03
15. Home Depot
74.77
70.40
* = New to the Annual RQ Survey and/or not measured in Annual RQ 2003.
Note: Companies with identical RQs at one decimal place are ordered according to their RQ ranking at the second decimal place.
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51.06
Attitudes toward the US health care system
Percentage that believe that the US health care system “has so much
wrong with it that we need to completely rebuild it”
50%
42%
40%
36%
35%
33%
31%
30%
24%
24%
30% 30% 29%
31%
31%
20%
10%
0%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Source: Harris Interactive polls, 1990-2004.
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Dissatisfaction is not at 1993 levels
Percentage dissatisfied with availability and affordability of health
care in the US
1993
a
77%
a
2000
2004
67%
b
60%
Sources: aBlendon, Benson, Challenge, 2004; bKaiser Family Foundation/Harvard School of Public Health poll, 2004.
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Many consumers say their health insurance benefits are
getting worse
Over the last 2-3 years, have each of the following been getting better or worse?
14%
8%
16%
39%
7%
10%
39%
Much better
Somewhat better
Neither better or worse
Somewhat worse
Much worse
41%
27%
13%
31%
20%
5%
6%
11%
Salary or pay
Retirement
benefits
Health insurance
benefits
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42%
Base: Have employer-provided health insurance
(Source: Wall Street Journal/Harris Interactive,
September 26–30, 2003)
Consumers are becoming somewhat less satisfied with the
costs of health care
Percentage of consumers that are satisfied with selected aspects of the
health care system
Total costs of
health care
56%
64%
OOP costs for Rx
drugs
61%
67%
OOP costs of HC
services
62%
67%
74%
77%
Health insurance
benefits
2003
Source: Harris Interactive Strategic Health Perspectives 2004.
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2004
It’s not about the burden of cost (for most people)
“How difficult is it for you to pay each of the following?”
Prescription
Drugs
Health
Insurance
Premiums
Doctors
Visits
Your
Deductibles
%
%
%
%
Very difficult
7
5
4
9
Somewhat difficult
18
14
12
18
Not very difficult
27
19
27
22
Not at all difficult
37
38
41
28
Don’t pay
11
24
16
23
Base: Have health insurance
Source: Harris Interactive Strategic Health Perspectives 2004.
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When do people get angry about prices and costs?




When their out-of-pocket costs increase sharply
(It’s the rate of increase, not the absolute $s involved)
When they pay more for the same, unimproved product or
service
When they don’t think they are getting more benefits for more $s
(i.e., value for money is declining)
When big, profitable companies are benefiting
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Health care products and services are viewed differently
when it comes to providing “value”
Percentage of consumers rating each of the following a very good or
fairly good value
Generic prescription drugs
63%
Medical devices
43%
OTC (non-prescription) drugs
36%
Doctors
35%
Pharmacies
32%
Hospitals
24%
Brand name prescription drugs
Health insurance companies
21%
14%
Source: Harris Interactive/Wall Street Journal. Aug 19, 2003
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Most consumers value affordable drugs over innovative
drugs
“Overall, do you think it is more important for people like you to…?”
69%
72%
Total
Age 65+
21%
18%
10%
Have access to
Have access to new
affordable Rx drugs and better drugs, no
even if they aren’t the
matter what they
newest ones available
might cost
Source: Wall Street Journal/Harris Interactive, May 2004
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11%
Not sure
Most consumers believe drug prices and hospital
charges are unreasonably high
Percentage saying the prices of each of the
following are “unreasonably high”
2000
2002
2004
63% 62% 66%
67% 64% 64%
Prescription Drugs
Hospital Charges
55%
49% 48%
Doctors Bills
Source: Harris Interactive Strategic Health Perspectives 2004.
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Awareness of international price differences in
prescription drugs continues to grow
How do you think the prices of of prescription drugs in this country compare with
drug prices in Canada and Western Europe? Are the prices her much higher,
somewhat higher, about the same, somewhat lower or much lower?
73%
63%
49%
41%
56%
56%
21%
19%
22%
18%
20%
16%
35%
37%
25%
29%
Feb-00
June-00
June-01
March-02
Much higher here
51%
April-03
Sep-04
Somewhat higher here
Source: Harris Interactive polls, 2000-2004.
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45%
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Americans view medical costs as an exception to the
rule
Percentage saying prices of selected items are higher in the U.S.
compared to Europe
Much more expensive in US
Somewhat more expensive in US
11%
3%
7%
Computers
11%
4%
8%
Food
14%
16%
6%
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37%
39%
18%
19%
Medical
care
Rx drugs
7%
11%
14%
Gas
Cameras
Autos
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58%
21%
8%
6%
Source: Harris Interactive/Wall Street Journal. January 19 – 28, 2004.
55%
Americans lack knowledge of health care costs
Average
Actual
Cost
Average
Estimated
Cost
% Difference of
Estimated from
Actual
% Estimating
Too Little
% Estimating
Too Much
Statins
$109
$156
+43%
18%
(<$50)
21%
(>$200)
High Blood Pressure
Medication
$93
$153
+65%
21%
(<$50)
21%
(>$200)
Primary Care Visits
$80
$97
+21%
24%
(<$50)
11%
(>$150)
Trip to the Hospital in an
Ambulance
$550
$476
-13%
50%
(<$300)
16%
(>$750)
Blood Chemistry Test
$300
$143
-52%
73%
(<$150)
-
Hip Replacement
$25,000
$10,639
-57%
72%
(<$10,000)
-
Day/Night in Hospital
$3,600
$1,058
-71%
83%
( <$1,500)
-
Healthcare
Service/Product
Source: Wall Street Journal/Harris Interactive, June 24-28, 2004
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Public trusts companies far less than they trust their
products and services
Distrust in professions, companies and institutions IN GENERAL
Distrust in professions, companies and institutions that you have USED
Difference
Doctors
Your doctor/s
Pharmacies
Your pharmacy/ies
6%
5%
+1
9%
8%
Hospitals
Last hospital you visited
13%
11%
Employers
Your employer
Pharmaceutical companies
Rx drugs you take
+1
+2
36%
41%
+34
7%
Managed care
Your managed care co
51%
+14
37%
Health insurance
Your health insurance
59%
29%
Source: Wall Street Journal/Harris Interactive, January 13-15, 2004
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+11
25%
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+30
Most consumers lack confidence in drug companies to
publish timely information on side effects
“How confident are you that drug companies will publish any information they have
about the side effects of any of their drugs as soon as they have that information?”
42%
60% (Net)
30%
17%
5%
Very
confident
5%
Confident
Not very
confident
Source: Wall Street Journal/Harris Interactive, January 5 - 7, 2005
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Not at all
confident
Not sure
Large majorities believe pharmaceutical pricing practices
are unreasonable
Reasonable
%
Unreasonable
%
Not Sure
%
Be able to charge substantially
more than the price of current
drugs when they bring out very
effective new drugs
19
73
8
Increase the price of a drug
several times in the first few years
after it becomes available
7
89
4
Charge whatever prices they want,
if they can sell their drugs at those
prices
11
85
5
Source: Harris Interactive Strategic Health Perspectives 2004.
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Only 1 in 4 consumers believe medical research
contributes the most to Rx prices
Which do you think contributes the most to the
price of prescription drugs?
47%
30%
23%
All
65+
42%
27%
16%
Medical research
Marketing and
advertising
(Source: Harris Poll April 2003).
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Profit margin
Consumer perception of cost drivers
% of adults saying selected items are very important factor in rising health
care costs
69%
High profits/Drug companies
62%
Greed and waste in system
Aging of the population
55%
Malpractice suits
54%
Use of expensive medical technologies
Consumers have little incentive to seek
lower cost care
Source: Harvard School of Public Health/Kaiser Family Foundation, October 2004.
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46%
39%
American’s views of health care institutions and
industries
Percentage of consumers that say each industry does a “good job” serving its
customers
90
80
70
79
77
73
73
79
71
73
66
67
60
50
55
51
57
70
59
56
51
48
45
49
44
41
40
73
40
38
34
36
33
30
30
29
41
40
Hospitals
Pharmaceutical
Health insurance
Managed care
30
20
1997
1998
1999
2001
2002
2003
Source: Harris Interactive polls, 1997 - 2005
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2004
2005
Who does the public want to regulate?
Which of these industries do you think should be more regulated by government - for example for
health, safety or environmental reasons - than they are now?
56%
Health insurance companies
Pharmaceutical and drug companies
55%
Managed care companies (i.e. HMOs)
55%
50%
Oil companies
45%
Tobacco companies
42%
Hospitals
37%
35%
Medical device companies
Biotechnology companies
Telephone companies
30%
Car manufacturers
30%
29%
29%
Airlines
Packaged food companies
22%
Banks
Computer software companies
Supermarkets
Computer hardware companies
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13%
12%
11%
www.harrisinteractive.com
Medical advances the public has noticed

“Improvements in surgery”
– (e.g., less invasive treatment/testing, improved surgical techniques,
organ transplants)

“New treatment technologies”
– (e.g., treatments for heart disease, joint replacements, pacemakers,
defibrillators, improved prosthetics)

“Imaging diagnostics”
– (e.g., MRIs, CAT scans, PET scans, ultrasounds)

“Improvements in prescription drug treatments”
– (e.g., improvements in medications, HIV/AIDS treatments, Diabetic
treatments/medications)
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Demonization of pharmaceuticals
What others say about the industry

Growing percentage of growing costs

“Outrageous prices”

Most profitable large industry

“Only care about profits”

“Strong-arm marketing”
– To public
– To doctors

“Don’t care about those who can’t pay, (poor and third world)”

Quality production problems

“Put their interests above those of patients even when it puts patients at
risk”

“Ruthless lobbying – legal maneuvering”

Too many “me-too” drugs with marginal benefits
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The impact of demonization


You are popular target for criticism – by the media and politicians
It’s harder to get federal or state governments to support you on legislation
and regulation

It increases pressure to cut your prices and restrict marketing

It makes it easier for health plans to increase co-pays and co-insurance


Employers and plans get mad at you (less support from corporate
America?)
Increased non-compliance (including not filling prescriptions, taking smaller
or less frequent doses)

Increased resistance to your marketing and reduced demand

Easier for legislators and regulators to interfere

Marketing and pricing practices become a target for increased scrutiny…by
everyone
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Future drivers of reputational challenges (1)

Growing demand for “look good – feel good” medicine and alternative
treatments
–
–
–
–

Impact of new medical technology
–
–
–
–
–

Cosmetic surgery, Botox, etc.
Viagra / Cialis / Levitra
Minerals, vitamins, food supplements
“Anti-aging” medicine
New drugs
New devices and implants
New imaging techniques
New diagnostics
Genetic testing and gene therapy
Efforts of consultants, insurers and employers to “build a better mouse
trap”
–
–
–
–
–
–
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High deductible / “consumer-directed” health plans
HSAs
Reduce cost of preventive care, maintenance drugs for chronic diseases (Pitney-Bowes)
Disease management
Demand management
Wellness programs
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Future drivers of reputational challenges (2)

The desire of “medical-industrial complex” to maximize revenue
and profit
–
–
–
–

Pharmaceuticals
Devices/Diagnostics/Implants/Imaging
Hospitals
Nursing Homes
Health care providers’ desire to maximize revenue and autonomy
– From physicians and other professionals
– To unskilled hospital workers, aides and cleaners
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Challenges and opportunities looking forward

Benefit design that supports intelligent consumer engagement
–
–
–
–


Pay-for performance
Quality initiatives
–
–
–
–


AHRQ
Leapfrog
Specialty societies
Etc.
Electronic prescribing
Marketing practices
–
–
–

(e.g., Pitney Bowes, Aventis/APhA Foundation Patient Self Management Project, RxImpact)
Preventive safe harbor
Medicare Part D
Medicare MTMPs (Medication Treatment Management Programs)
Physicians
Consumers
Payers
Demonstrate value!!
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Thank-you!
Katherine Binns
Senior Vice President, Health Care and Policy Research
Harris Interactive Inc.
www.harrisinteractive.com
©2004, Harris Interactive Inc. All rights reserved.