These are the most and least reputable drug companies in the world

Drug companies aren’t exactly known for their reputations. 

But public opinions about them have changed in some surprising ways in recent years, especially amidst recent controversies over the high and rising prices of drugs.

A new analysis from the research consulting firm Reputation Institute evaluated public perceptions of 14 pharmaceutical companies in 7 key areas: 1) products and services, 2) innovation, 3) workplace, 4) governance, 5) citizenship, 6) leadership, and 7) financial performance.

The report found that on average, drug companies continue to be perceived as having a so-so reputation. In fact, people’s opinion of the pharmaceutical industry overall has improved since 2015.

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Disclosure D-Day Draws Near In Europe

In line with the European Federation of Pharmaceutical Industries and Associations (EFPIA) Disclosure Code, June will see member companies across Europe required to publish data concerning their 2015 transfer-of-value transactions to healthcare professionals (HCPs). The EFPIA Code has been looming for four years and much of Europe appears to be ready for the imminent deadline. 

 In France and Denmark, for example, disclosure of payments on a central platform is already a legislative requirement: in the UK, the Association of the British Pharmaceutical Industry (ABPI) began disclosing aggregate payments to HCPs in 2014; and in Portugal, US “Sunshine”-type rules took effect in February 2013.

Top 10 Pharmaceutical Companies 2016

The global prescription pharmaceuticals market was estimated to be USD 1,114 billion in 2015. The market is mature and highly consolidated. The top-10 pharmaceutical companies in this market had share of over 30% in 2015. These companies are large and established organizations that are primarily located in U.S. and Europe. They offer drug products for a very wide range of therapeutic areas. Furthermore, these organizations are the powerhouses of research and development in life sciences. The combined R&D expenses of these ten companies outstrips the R&D budgets for life science research in public sector.

A comparative analysis of the top-10 organizations was used to develop a ranking for these companies. The ranking model incorporated six criteria for each organization: revenues, contribution of top-3 drug products to the revenues, annual growth, investment in R&D, expenses and income, and revenue per employee. A score statistic was developed based on these six criteria. Each organization was assigned a score for each of these six criteria. A weighted sum of six criteria was used to arrive at the final score statistic.

Total revenue received the highest weight (40%) while revenue per employee received the lowest weight (6%). The score statistic represented the financial health, strength of R&D, and diversity of product portfolio of each organization.

1.      Johnson & Johnson (U.S.)

Johnson & Johnson (U.S.) is the top-ranked organization in this list. The company had the highest revenues in 2015. Its pharmaceuticals division contributed to 44.85% of its revenues in 2015. The company had one of the largest R&D budgets in 2015. However, the most important reason for its high rank is the diversity of its product portfolio – the contribution of its top-3 drugs to the pharmaceutical revenues (35.84%) was one of the lowest in this list. Remicade, Stelara, and Zytiga were the top-3 drugs for this company in 2015. The combined revenue of these three products was USD 11,266 million in 2015.

2.      Hoffmann-La Roche AG (Switzerland)

Hoffmann-La Roche AG had revenues of USD 50,111 million in 2015. Its pharmaceuticals segment contributed to 77.54% of its revenue in 2015. The company had the highest R&D expenses in 2015 – USD 9,972 million. However, the company’s product portfolio is narrow. Avastin, Herceptin, and Rituxan were the top-3 drugs for Roche in 2015. They contributed to 50.53% of the company’s revenue in 2015. All these three products are related to oncology. Furthermore, the patens of these three products is about to expire by in a few years (2016 for Avastin and Herceptin and 2019 for Rituxan). This will expose the company to competition from biosimilars.

3.      Pfizer Inc. (U.S.)

Pfizer Inc. had revenue of USD 48,851 million in 2015. The companies R&D expenses were USD 7,690 million in 2015. The top-3 drugs products of the company contributed 27.09% to the company’s revenue in2015. Pfizer had one of the lowest ratios of the proportions of revenue from its top-3 drugs to total revenue, indicating a healthy product portfolio. Furthermore, its highest-selling drug, Prevnar, has patent expiry horizon of 2026, which would help the company maintain its market position.

4.      Novartis AG (Switzerland)

The total revenue for Novartis AG was USD 49,414 million in 2015. The company’s revenues declined by 5.30% over the previous year. The company invested USD 8,935 million in R&D in 2015. The company also has a diverse product offering, with the top-3 drug products contributing only 31.18% to the company’s pharmaceutical revenues in 2015. The company’s top-3 drugs in 2015 were Glivec, Gilenya, and Lucentis. The combined sales of these 3 products was USD 9,494 million in 2015.

5.      Bayer AG (Germany)

Bayer AG is the only German company in this list. Though its total revenues were higher than those of Roche, Pfizer, and Novartis, the revenues of its pharmaceuticals segment was low – USD 15,253 million in 2015. The ratio of the proportion of revenue from its top-3 drugs to total revenue was one of the lowest for Pfizer – 33.72% in 2015.

6.      Merck & Co., Inc. (U.S.)

Merck & Co., Inc. had total revenue of USD 39,498 million in 2015. The company’s pharmaceuticals division contributed to 88.06% of this figure in 2015. The company invested USD 6,704 million in R&D in 2015, which in relation to its revenue was one of the highest. Furthermore, the contribution of top-3 drugs to revenue was one of the lowest for Merck (24.55% in 2015), second only to the ratio for GSK.

7.      GlaxoSmithKline plc (U.K.)

GlaxoSmithKline plc is the first U.K-based company in this list. It had total revenues of USD 36,566 million in 2015. The company invested USD 5,441 million in R&D in 2015. The company had the lowest ratios for the contribution of top-3 drugs to its revenues – 21.50% in 2015.

8.      Sanofi (France)

Sanofi is the only French company in this list. It was also one of the two companies in this list with positive growth rates in 2015. The company’s revenues grew by 8.99% between 2014 and 2015 to reach USD 34,542 million in 2015. The company invested USD 5,092 million in R&D in 2015. Furthermore, revenues its top-3 products – Lantus, Plavix, and Lovenox – contributed only 29.06% to its revenues in 2015. However, the patents of all three products has expired as of 2014, and the company needs to rapidly expand and diversify its product offering.

9.      Gilead Sciences, Inc. (U.S.)

Gilead Sciences, Inc. had the highest growth rates in 2015. The company grew by 31.13% between 2014 and 2015, to reach USD 32,639 million in 2015. The company invested USD 3,014 million in R&D in 2015. Its top-3 drugs – Harvoni, Sovaldi, and Truvada – contributed 55.48% of its revenues in 2015. This ratio too is the highest amongst its peers in this list. However, the patent-expiry horizons for all three products are substantially long (2030 for Harvoni, 2029 for Sovaldi, and 2021 for Truvada), which would help sustain the company’s rapid growth.

10.  AstraZeneca plc (U.K.)

The revenue for AstraZeneca plc was USD 23,641 million in 2015. The company invested USD 5,997 million in R&D in 2015. The company’s R&D investments in relation to its revenue was the highest amongst all companies in this list. The company’s strategy to invest in R&D is critical to its growth as its top-3 drugs – which contributed 46.14% to its revenue in 2015 – are fast approaching patent expiry. Crestor’s and Nexium’s patents expire in 2016 while Symbicort’s expires in 2017.

 

Quintiles and IMS Health announce plans to merge

Quintiles and IMS Health today announced a global strategic alliance that will advance the way biopharmaceutical companies generate real-world evidence (RWE) and apply critical insights to drive late-stage clinical research. The companies say, the move will improve clinical trial design, recruitment and execution in the $100-billion biopharma product development market by combining IMS Health’s global information solutions with Quintiles’ product development skills.