Hit enter to search or ESC to close

logo-block
logo-block-tablet

How big a risk is drug pricing to pharmaceuticals?

The health secretary Jeremy Hunt has asked the competition watchdog to investigate accusations that drug companies are “exploiting” the NHS to raise their prices. The claim is that the use of loopholes has resulted in a price rise of over 1,000% for 32 drugs over the past 5 years. This follows concern from within the industry over the issue as the Royal Pharmaceutical Society urged the Department of Health to “crack down” on “cynical and exploitative” pricing.

In this context, alva decided to examine if the issue has migrated into the public consciousness and why, by addressing three questions:

  • Has mainstream media coverage of drug pricing increased?
  • Has mainstream media coverage translated into increased concern among the general public?
  • Do the public target any specific pharmaceutical companies in particular?

Screen Shot 2016-07-21 at 14.56.59

Has mainstream media coverage of drug pricing increased?

Figure i shows the total daily volumes of content related to drug pricing since the beginning of 2015 until June 2016.

Figure I: Global Mainstream Media Volumes

Drug Pricing Global Mainstream Media Volumes

The major peaks within Figure i were sparked in response to Turing Pharmaceuticals increasing the price of the potentially life-saving drug Daraprim by 5,500%. Turing was launched by Martin Shkreli in February 2015, before acquiring the US marketing rights to Daraprim in August that year and then raising the price 5,500% the following month. This move resulted in extremely negative media coverage, including being called “the most hated man in America”.

But more interesting is the level of background noise. Prior to the 23rd September there is a relatively low “normal level” of references to drug pricing, but the price increase not only generated the largest spike in volumes, but also resulted in significantly higher volumes in the days afterwards.

There was also a call from experts on the 4th December 2015 for more global pricing transparency after fears some nations are “overpaying for treatments”, ensuring drug pricing remained of interest to the mainstream media. These two factors contributed to the level of background coverage of this issue apparently resetting to a new normal which is higher and more volatile than before.

Has mainstream media coverage translated into increased concern among the general public?

alva overlaid mainstream media volumes with the volume of content from social media to assess if mainstream coverage resulted in increased public interest and concern.

Figure ii: Drug pricing – mainstream coverage versus public discussions

Drug pricing - mainstream coverage versus public discussions

By reducing the scale to add emphasis to the background volumes, Figure ii shows the general public are remarkably sensitive to mainstream media coverage.

As with mainstream media coverage, content volumes by the general public are significantly higher after the Martin Shkreli story broke. The correlation between mainstream content and the volume of mentions by the general public also increases significantly (from 0.20 to 0.82) after the Daraprim price increase.

Mainstream media coverage does increase public concern around drug pricing, particularly in the aftermath of a “shock” event.

Do consumers target any specific pharmaceutical companies in particular?

Figure iii: Distribution of total drug pricing references by pharma company

Volume of drug pricing coverage by pharma company

Figure iii shows despite Turing Pharmaceuticals being a young and much smaller corporation than the established pharma companies, it was one of the top three most discussed firms for drug pricing via mainstream media. This in turn led it to be comfortably the most discussed pharma company by the general public on the pricing issue, garnering 23% of volumes. This demonstrates that pricing can be a highly sensitive issue to both mainstream media and the public, regardless of the corporation’s profile.

However, looking beyond Turing, we can see that despite the mainstream media largely focusing on Pfizer and Gilead, the public generally do not appear to target any one company in particular. Pfizer received 4% more public comment than third placed GSK, but companies between 2nd-8th for public discussions were closely grouped, accounting for 54% of discussions between them.

A further delve into the comments reveals that drug pricing doesn’t necessarily have to be a negative issue. GSK and Novartis were two examples of how the correct response to a negative issue can differentiate a company and result in a positive public response.

GSK’s CEO comments on reducing “drug price inflation”, and his move to let patents lapse (so as to allow cheaper generic forms of the drug to make treatment affordable in developing markets) was a large reason behind the company being the third most discussed by the public.  Similarly, the Novartis CEO’s call for “results based pricing” also resulted in positive coverage by the public.

The proactivity of CEOs in making these positive stories appears important. Gilead’s “blockbuster prices” for its Hepatitis C drug are compared unfavourably to AbbVie’s yet, interestingly, AbbVie does not receive a corresponding amount of positive coverage, indicating that positivity around the issue requires the proactive communication of positivity to the public.

Neither GSK nor Novartis featured highly in mainstream coverage on pricing, which suggests that the public have picked up on the positive stories off the back of negative coverage directed at their peers. This shows that while drug pricing has the potential for high media exposure, one company’s actions do not result in blanket negativity for the industry. In fact, there are good opportunities to build rapport with the public if senior figures at rival firms take a strong vocal stance against unreasonable price increases.

Summary

  • Background “chatter” around drug pricing has increased within the mainstream media
  • The general public is sensitive to mainstream media, with increased mainstream media coverage provoking increased engagement with the issue from the general public
  • While the mainstream media have focused on a small number of brands, the public’s discussions have been much more broad
  • There are good opportunities for companies to positively differentiate themselves with the public when there is a proactive communication from senior figures against high pricing
See more articles
Join our Newsletter

Be part of the Reputation Community Join our Newsletter

Join our Newsletter

What are the 5 key things to consider when choosing a monitoring provider? See them here… 👉 https://t.co/6smGroNQQ5 #MediaMonitoring #ReputationIntelligence #SentimentAnalysis

There are 5 key competencies that every Corporate Affairs & Communications Director should undertake to fully maximise their contribution to their business. #ReputationIntelligence #CorporateAffairs #ConnectingLeader

https://t.co/loWOy7PMiG

In today’s data-rich world, measuring corporate reputation requires scaled-up AI techniques to understand stakeholder sentiment. #ReputationIntelligence #ArtificialIntelligence #SentimentAnalysis #AI

https://t.co/Z02dJk7o70

Load More...

Be part of the Connected Intelligence community

To join our Connected Intelligence community simply complete the form below.