STRONGBRANDS    Professor Tim Calkins, Kellogg School of Management

The 16^th annual Kellogg Biotech and Healthcare Case Competition is underway; the case went out last Friday, and on Saturday teams will compete for almost $10,000 in prize money.

The Teams

More than 50 groups applied for the event, and we selected twelve remarkable teams to compete in Evanston.

Competitors are from eleven of the top business schools in the world: Kellogg, Harvard, CEIBS, Chicago-Booth, SDA Bocconi, Texas-McCombs, Michigan-Ross, Berkeley-Haas, UCLA-Anderson, Hopkins-Carey and INSEAD.

The Topic

The case competition topic varies each year. One year teams had to develop a plan to reduce infant mortality in Nigeria, another year teams had to forecast sales of a new molecule. In last year’s competition, participants considered how an opthamolic surgeon should respond to competitive moves in his market.

This year, the topic is perhaps our most challenging yet: how should the pharmaceutical industry deal with its branding problem?

It is hard to think of an industry that has fallen faster in public opinion than pharma. It is difficult to recall, but it wasn’t all that long ago that pharma companies were some of the most respected firms in the world. For many year, Merck topped Fortune’s List of Most Admired Companies.

Today, after a series of negative stories ranging from the recall of drugs such as Vioxx, to the embarrassing behavior of pharmaceutical CEO Martin Shkreli, to high-profile and controversial pricing decisions, the industry is scorned by many. According to a recent Gallop poll, perceptions of the industry fall below restaurants, airlines, farming, grocery stores…the list goes on. Only the Federal Government has lower perceptions.

So this week twelve teams are considering pharma’s branding situation. Are the perceptions a concern? If so, what can be done?

Not to give away the answer, but pharma’s brand perceptions are a huge problem. One of the few things Republicans and Democrats can agree on these days is that the pharmaceutical industry is a problem and one of the main causes of high-cost healthcare. This perception isn’t fair, in many ways, but perceptions matter more than the factual truth. A wave of damaging legislation is in the works.

With such negative perceptions, pharma will have trouble making valid points when it comes to policy; people will view every statement with a skeptical eye. Recruiting talented people might be a challenge. Marshalling significant public support will be almost impossible.

The more interesting question: what should the industry do? PhARMA, the industry association, launched a rebranding campaign two years ago. Given what is happening, is this still the right effort? What else can be done?

That is the challenge for the teams.

This year’s event is sponsored by Astellas. PhARMA is participating, too, so the recommendations aren’t just hypothetical; if one of the teams comes up with a good plan, it could become reality.

 

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