Competitiveness is a top priority for today’s industry leaders. Several analyst reports I have read show that the lifespans of top companies are shrinking and at the current churn rate, 75 percent of the Standard & Poor’s 500 index will be replaced between 2012 and 2022.1 In order to compete in an increasingly disrupted healthcare environment, companies are beginning to double-down on a new currency for growth – sustainability and trust.
A recent CEO study led by Accenture Strategy and the UN Global Compact revealed that 93 percent of CEOs see sustainability as important to the future success of their business, but only 33 percent feel that they are doing enough.2 Preserving reputation and trust is particularly critical for life sciences companies, many of which are consistently challenged by trust and reputation issues, which can represent as much as 40 to 60 percent of a corporation's market capitalization.3,4
As leading pharmaceutical companies look to integrate sustainability into their DNA and build stakeholder trust to stay competitive, we are seeing growing investments in access to medicines for vulnerable and underserved patients around the world. Companies like GSK, Johnson & Johnson and Novartis are leading the way in improving access to healthcare globally, and increasingly recognizing the potential to achieve both social and business value through their efforts.5
This mentality that business can “do well by doing good” is seen through expanded reach into emerging and developing markets, innovating new business models, improved reputation and trust, and improved attractiveness for talent. Accenture research has also identified several linkages between business value and the strength of access to medicines programs as measured through the biannual Access to Medicines (ATM) Index.
Access leaders are poised to better compete for future share in emerging markets, which will continue to outpace mature market growth over the next 3 years, and already show a larger proportion of their total revenue coming from emerging markets compared to their peers.
Companies who are investing heavily in access enjoy greater shareholder returns and market share than their peers: Companies that have improved or retained their ranking in the ATM Index over four years are benefitting from an improved overall 3-year TRS CAGR, and eight of the top 10 companies in the ATM Index feature among the top 10 pharma companies globally by market share.
In the long term, access leaders have surpassed their peers in the stock market. Over the past five years, the top 10 leaders outperformed the bottom 10 by 60 percentage points of stock price growth.
Leaders in access are perceived as being more transparent than their peers, as measured by the Bloomberg ESG Social Disclosure Index. Transparency is an important contributor to advancing reputation, and enables more resilient business performance in the long term.
Over two billion people worldwide lack access to the medicines they need today.6 There is no question that the pharmaceutical industry has a critical role to play in closing this gap by providing better patient access.
1 Innosight, Creative Destruction Whips through Corporate America, 2012.
2 The UN Global Comact-Accenture Strategy CEO Study, Agenda 2030: A Window of Opportunity, 2016.
3 PatientView Survey, The Corporate Reputation of the Pharma Pharmaceutical Industry, 2015.
4 Kessel M., Restoring the Pharmaceutical Industry's Reputation, Nature Biotechnology, 2014.
5 Access to Medicines Index, 2016.
6 Access to Medicines Index, 2016.