Thank God for the tobacco and oil companies for without them the health care industry’s reputation would be bottom of the heap. Harris Interactive is out with its latest scores on reputations and the pharma industry continues its fall from having 79% of the public thinking they’re doing a good job for consumers to 44%. Managed care companies fell to 30% from 51% in 1997. Only the oil, tobacco and health insurers rate worse than pharma.
So the tale of managed care’s woes is well understood–once they were well known they were despised, and probably will be better off trying to get themselves known as health insurers (which is sort of what they are anyway). The pharma case is a little more curious. Americans love medical technology and the pharma industry has delivered great new technology in spades. And although the pricing of drugs is well known to be out of control, not that many people have to bear those high prices directly.
My suspicion is that this means that the Democratic rhetoric about the Medicare bill and the stonewalling on the reimportation issue are really getting through to the public. It’s been in the past 18 months that the pharma industry’s reputation has really gone into freefall.
Ernst and Young (hattip to Don at BusinessWord) seem to think that the pharma companies really need to fight their corner on reimportation and pricing. They seem to be doing so via the Administration in their negotiations with the Australians at least. (Thanks to the Industry Veteran for that link). I disagree. Imports are and will remain a small part of the market. The pharma industry can afford a drop in revenues and pricing and keep pretty decent margins(hint to CFOs: there’s a ton of fat in sales and marketing to be taken out), and this short-term thinking increases the likelihood of price controls and greater government intervention in the future.
Sidebar: The Aussies went to Iraq despite the opposition of 90% of their population because they were promised a free-trade deal to get their agricultural products into the US. They continue to be horrified that free-trade according to the US means that the Australian government has to give up its role as monopsony for drugs in that country! Meanwhile, what did Bushco offer the UK government go to war in Iraq with it? Guesses on a postcard to me please, as I have no clue and my British friends are now being fingerprinted at US immigration.