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American Drug Companies Out of Sync With Public Opinion on Their Ethics, Opinion Researchers Report

American Drug Companies Out of Sync With Public Opinion on Their Ethics, Opinion Researchers Report

Published 02-28-05

Submitted by Opinion Research Corporation

PRINCETON, N.J. - Senior executives of US drug companies have a high opinion about their business ethics, while a broad sampling of the American public thinks just the opposite, according to recent surveys by two national opinion research organizations. This, the researchers warn, may be a leading indicator of continuing tension between the pharmaceutical industry and the public at large.

That tension, they add, could further challenge the corporate reputations of drug companies in an industry already over-stressed by intense public scrutiny and ongoing controversy across a range of issues-including the most recent questions about the health risks of Cox-2 inhibitor pain killers.

In a survey of senior executives across the pharmaceutical industry late last year, Rating Research LLC (RRC), a leading corporate reputation rating agency, found that 65% of executives interviewed "agreed" or "strongly agreed" on average senior leadership of the major drug companies "adhere to ethical business practices."

By contrast, in a recent nationwide poll, the market research and advisory firm Opinion Research Corporation (ORC) found that only 44% of the 1,000 Americans surveyed expressed confidence that the senior leadership of major drug companies "engage in ethical business practices."

ORC reports further that respondents in the same survey ranked the ethics of drug company managers below average for American companies. Half of the respondents (50%) said they are "very" or "somewhat" confident in the ethical behavior of senior leaders of American companies generally. And looking at specific industries, 57% of the same respondents said they are confident in the ethical behavior of electric power companies.

The opinions of senior drug company executives about their own industry are all the more surprising in that most of the executives were interviewedafter drug maker Merck & Company withdrew its Cox-2 inhibitor Vioxx from the market. That announcement triggered a flurry of media attention and public concern over the drug testing and drug advertising practices of pharmaceutical firms during the survey period.

'Trust Chasm'
Why the disconnect? Jeffrey T. Resnick, Executive Vice President and Managing Director of ORC's Corporate Reputation Management Practice believes that "industry executives are taking a long-term perspective and are expressing confidence in the future business success of their industry." Mr. Resnick, adds, however, that "success of the industry will be bolstered if the current 'trust chasm' created among the public can be successfully addressed by the industry. Consistency between the 'promise' made to the market and the behavior of corporate executives and the firms they run is the most important element in bridging this chasm over time."

What's the impact of this? Professor Stephen A. Greyser, Richard P. Chapman Professor (Marketing/Communications), Emeritus at Harvard Business School, states that "There is an obvious incongruence between the judgments of drug company executives and the public's view."

"Industry leaders either don't recognize or don't want to recognize the extent of the public's concerns," he says. "Either way, they would benefit from a better grasp of the sources of the public's lack of confidence, particularly as it may apply to concerns about their own firms. Then they need to take actions to address - or redress - the concerns. Otherwise their firms' own corporate reputations may erode toward a state of reputational distress."

About the Methodology
These findings are based on a telephone survey conducted using Opinion Research Corporation's Caravan(R) Survey among a national probability survey of 1022 adults from February 3 - 6, 2005. The possible sample variation for this survey is +/- 3%.

About Opinion Research Corporation
Founded in 1938, Opinion Research Corporation provides commercial market research, health and demographic research for government agencies, information services, teleservices and consulting. The company is a pioneering leader in the science of market and social research, and has built a worldwide data-collection network.

About Rating Research LLC
RRC, a joint venture between The Ratrix Group and Opinion Research Corporation (NASDAQ), assigns Reputation Strength Ratings and Ethics Reputation Ratings to leading companies and publishes those rating opinions as a public service

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