the 2015 u.s.healthcare...

REPUTATION LEADERS NETWORK

The 2015 U.S. Healthcare RepTrak®Reputation Leaders in U.S. Healthcare Industry

Part of the World’s Largest Study on Corporate Reputation

June 2015

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REPUTATION LEADERS NETWORKAbout Reputation Institute

Reputation Institute is the world’s leading reputation-based research advisory firm, founded by Dr. Charles Fombrun and Dr. Cees van Riel in 1997.

Reputation Institute’s RepTrak®

Research is the worlds largest and highest quality normative reputation benchmark database.

• 7 Dimensions of Reputation• 10 Years of Data Indexed• 40 Countries Measured• 15 Stakeholder Groups• 3,000 Companies per Year• 6M Responses per Year

Our most prominent management tool is the RepTrak® model for analyzing the reputations of companies and institutions – best known via the Forbes-published Global RepTrak® 100, the world’s largest study of corporate reputations.

We enable leaders to make business decisions that build and protect reputation capital and

drive competitive advantage

Knowledge AdviceResearch

InsightStrategy

Activation

PublicationConferencesTraining

InformationAnalysis

Presentation

The world leader in Reputation Management research

c

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REPUTATION LEADERS NETWORKWelcome to the US Healthcare RepTrak®

① Reputation Institute conducts the US Healthcare RepTrak® annually to measure the reputation of the most highly regarded healthcare companies in the United States

② It is part of the largest US reputation study, which has over 80,000 ratings collected during Q1 2015

③ Respondents are qualified at 2 tiers:• Familiarity: Respondent must be “somewhat” or “very” familiar • RepTrak® Pulse: 75% completion of pulse rating to be included

④ The results tell us:• Which healthcare companies are best regarded by consumers• What drives trust and support with consumers• How the top companies are living up to public expectations

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• About Reputation Institute

• How does Reputation Institute study corporate reputation?

• The 2015 US Healthcare RepTrak®

Agenda

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REPUTATION LEADERS NETWORKWhy Measure Reputation?

The success of your company depends on getting people to support you, and:

… that ensures

• Consumers use your products

• Customers recommend you

• Your investors support you

• Policy-makers and regulators give you the benefit of the doubt

• Your employees are aligned and deliver on your strategy

Reputation is an emotional bond…

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REPUTATION LEADERS NETWORKReputation Drives Support

The RepTrak® System measures a company’s ability to deliver on stakeholder expectations in the 7 key rational dimensions of Reputation:

1. Products / Services2. Innovation3. Workplace4. Governance5. Citizenship 6. Leadership 7. Financial Performance

A company that delivers on expectations in the 7 domains will earn

support from its stakeholders:

� Buy

� Work

� Invest

� Neighbor

� Benefit of Doubt

� Recommend

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REPUTATION LEADERS NETWORKThe RepTrak® Model Summary

12 3

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REPUTATION LEADERS NETWORK2015 US Industry Rankings

POOR

<40AVERAGE

60-69EXCELLENT

>80STRONG

70-79WEAK

40-59

Highlights

Industry scores can help put

company scores in context, as

consumer perceptions about an

industry can have either a halo

effect or a damaging impact on their perceptions about an individual

company

• The Healthcare industry

improved in the last year, moving

from an average to a strong reputation.

• In 2015 the Healthcare industry’s

score places it on par with the 2nd

ranked Industrial industry

2015

1

2

3

4

5

6

7

8

Rank

9 76.49

73.34

71.54

71.22

69.88

69.51

68.46

67.29

66.13

65.04

Consumer

Industrial

Healthcare

Hospitality

Retail

Energy

Financial

Technology

Information & Media

All Pulse scores that differ by more than +/- 0.9 are significantly different at the 95% confidence level.

Pulse scores are based on questions measuring Trust, Admiration & Respect, Good Feeling and Overall Esteem (captured in the Pulse score on a 0-100 scale).

The Healthcare Industry includes pharmaceuticals,

medical device and acute care companies

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POOR

<40AVERAGE

60-69EXCELLENT

>80STRONG

70-79WEAK

40-59

2015

1

2

3

4

5

6

7

8

Rank

9

72.6810

80.00

Highlights

• All ten companies have strong

scores ; none are in the

excellent range

• 7 out of the 10 are

pharmaceutical companies,

and the rest are medical device companies



73.17

77.55

76.16

75.83

74.82

74.50

74.33

74.02

73.49

Who are the Top 10 in the U.S. Healthcare Industry?

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REPUTATION LEADERS NETWORKRank Company 2015 RepTrak® Pulse Score

1 Shire Ltd. 77.552

Sanofi (former Sanofi-Aventis) 76.16

3 Bayer 75.834 Boehringer Ingelhiem 74.825 MEDITECH 74.506

BD (Becton, Dickinson and Company) 74.33

7 Perrigo 74.028 AbbVie 73.499 Roche 73.17

10 Boston Scientific 72.6811 Eli Lilly 72.0312 Novartis 71.4613 Takeda Pharmaceutical 71.0914 AmerisourceBergen 70.9515 Celgene 70.8316 Mylan 70.7917 Amgen 70.5218 Baxter International 70.5219 Gilead Sciences 70.2520 MSD (Merck Sharp & Dohme) 70.1521 Abbott Laboratories 70.0122 Bristol-Myers Squibb 69.8423 Genentech 69.8424 GlaxoSmithKline 69.7425 Medtronic 69.23

POOR

<40AVERAGE

60-69EXCELLENT

>80STRONG

70-79WEAK

40-59



2015 US Healthcare RepTrak®: The 25 Most Reputable Healthcare Companies in the U.S.

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POOR

<40AVERAGE

60-69EXCELLENT

>80STRONG

70-79WEAK

40-59

2015

1

2

3

4

5

6

7

8

Rank

9

71.0910

80.00

Highlights

• Shire, Sanofi and Bayer on par

based on their reputational

performance



71.46

77.55

76.16

75.83

74.82

74.02

73.49

73.17

72.03

Top 10 in the U.S. Healthcare Industry – Pharmaceuticals

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REPUTATION LEADERS NETWORKWhat are the primary reputation drivers?

2015 US RepTrak Drivers

18.0%

13.4%

12.8%

14.0%

15.5%

13.1%

13.2%

• Product/Services: Offers high quality products and services

• Innovation: Is an innovative company -- it makes or sells innovative products or innovates in the way it does business

• Workplace: Is an appealing place to work -- it treats its employees well

• Governance: Is a responsibly-run company -- it behaves ethically and is open & transparent in its business dealings

• Citizenship: Is a good corporate citizen -- it supports good causes & protects the environment

• Leadership: Is a company with strong leadership -- it has visible leaders & is managed effectively

• Performance: Is a high-performance company -- it delivers good financial results

Factor Adjusted RegressionN = 43,600AdjR = 0.708

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REPUTATION LEADERS NETWORKWhat are the primary reputation drivers?

2015 U.S. RepTrak® Drivers: All Industries

18.0%

13.4%

12.8%

14.0%

15.5%

13.1%

13.2%

15.7%

12.8%

13.0%

16.3%

16.7%

11.6%

14.0%

2015 U.S. RepTrak® Drivers: Healthcare Industry

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REPUTATION LEADERS NETWORKAction AND communication are critical to convert neutral consumers

Note: % of public who is neutral or ‘not sure’ about company’s performance on that dimension

40.5%

52.5%

46.8%

50.6%

46.8%

45.3%

41.4%

Highlights

• Across the 7 dimensions of reputation, 40% to 53% of consumers are

uncertain what the companies are doing

• These consumers are crucial fence-sitters who can swing to the positive or to the negative based on whatever information they

receive

• The Corporate Social Responsibility (CSR) dimensions are both where

the percentage of fence-sitters is highest, as well as 2 of the top 3

most important reputation drivers

41.0%(Product)

48.4%(Enterprise)

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REPUTATION LEADERS NETWORKPerformance in key dimensions : Governance and Citizenship

Highlights

• Shire’s “keep momming” campaign,

increasing awareness for ADHD

among young girls, has stressed the company’s relevance to society

• Shire espouses a unique business

model – a virtual, lean pharma

company that relies more on

outsourcing. As a result, the reputation-risky sides of pharma

company are less visible to the public,

while the reputation-rewarding

aspects (helping kids with ADHD,

targeting rare diseases that no one else fights) is very visible to the

public.

• * in industry rank

Healthcare IndustryGovernance Score: 70.40

77.92

+7.52

Healthcare IndustryCitizenship Score: 69.84

73.98

+4.14

Governance*

Citizenship*

Industry Rank

U.S. 100 Rank

1st

1st

31st

2nd

15.7%

16.3%16.7%



2nd

2nd

57th

1st

76.89

+6.49

78.33

+8.49

+6.2 (sig)

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2015 U.S. Healthcare Industry’s Reputation Drivers

1 3

18.0%

14.%13.5%

13.3%12.6%

15.4%

13.3% 1

Sanofi Driven By Strong Reputation in CSR

73.63 77.40

71.4476.16

2014 2015

CSR RepTrak® score

RepTrak® Pulse

• Sanofi gained 4.7 points in overall reputation and over 3.8 points in Corporate

Social Responsibility.

• Sanofi is ranked 1st when it comes to CSR

• Sanofi enjoys the best support in recommendation, with 68% of the public

strongly agreeing that they would recommend this pharma company

POOR

<40AVERAGE

60-69EXCELLENT

>80STRONG

70-79WEAK

40-59

78.13

78.17

77.00

76.89

78.33

75.65

77.77

15.7%

12.8%

13.0%

16.3%

16.7%

11.6%

14.0%

“Acting ethically and responsibly enables Sanofi to go beyond what is required of a company, which means employees working to protect and promote access to healthcare for the greatest number. Corporate Social Responsibility also means supporting the local communities in the countries where we operate while also contributing to global health through specific Research & Development programs and private/public collaboration.”

~ Olivier Brandicourt, CEO of Sanofi16

REPUTATION LEADERS NETWORKSanofi Focuses on Improving Governance Amid CEO Ouster Scandal

Sanofi’s 2014 Record:

• Research and Development Focus:

• Having invested approximately 4.83B euros in R&D in 2014, Sanofi currently has 37 projects in the R&D pipeline, 12 of which are already in phase III. More than 50% of the projects come from collaborations and partnerships.

• Improving Corporate Governance:

• The ousting of former CEO Christopher Viehbacher by a unanimous vote of Board of Directors in October 2014 represented a move toward increasing transparency and improving relations within Sanofi’s internal governing apparatus. The company also implemented an alert system through which employees can report breaches of the company Code of Ethics.

• Expanding Learning Opportunities for Employees:

• Sanofi launched new academies for employee learning in the fields of quality, alliance management, medical affairs, LEAN, and supply chain. Program offerings have increased from 30 in 2010 to over 100 in 2014 and the company has delivered 200,000+ hours of training to its employees worldwide.

• Commitment to CSR:

• Sanofi has expanded its efforts to increase access to healthcare by promoting its AllStar® reusable insulin pen in developing countries, namely India, and launching education campaigns such as “Schoolchildren against Malaria” to teach children in Africa about malaria prevention.

VS.

Company focuses on diversification of product portfolio to meet patient needs

Company expands R&D spending and prepares for launching of new drugs and vaccines

Work environment focuses on increasing diversity and learning opportunities

Company leadership committed to transparency in corporate organization

Company continues to experience sales growth in most of its product lines

Compliance mechanisms established to ensure adherence to Code of Ethics

Sanofi’s mission to improve access to healthcare is reflected in their CSR strategy, their commitment to training employees and their concern for corporate transparency.

Company is committed to expanding access to safe healthcare

Sanofi website, 2015

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Return on Reputation

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Companies who invest in a strong reputation experience direct financial benefits

• A Strong link between Reputation and Stock Price - Since the 2008 crisis, those companies with a stronger reputation have performed significantly better (almost 2X the return) than the overall market. (see next 2 pages)

• Better Stock Price Recovery after a Crisis – all firms take a similar hit (8%) on average, but higher reputation forms bounce back faster and go higher afterward (RI Study)

• Benefit of the doubt in a crisis - 54% would give reputable companies the benefit of the doubt in a crisis compared to only 20% for lower reputation companies. (RT100)

• Influence on policy making - companies with better reputations are invited to provide input to policy makers when new regulations are designed (Qualitative research from RI policy maker and regulator studies)

• Access to acquisitions - buyers with better reputations are approached more often, are more likely to get the deal done and at a better price (Qualitative findings from RI CFO interviews)

• More recommendation - recommendation goes up by 6.5 percent for each 5-point reputation RepTrak® score improvement (RT 100)

• More Buying – propensity to buy goes up over 5% for each 5 point RepTrak® score improvement (Multiple RT studies)

• Attracting the best talent - a good company reputation is a top 5 driver for people when they consider which company they would like to work for. A higher reputation results in a significant increase in willingness to work for a firm (Analysis of Universum and Best Place to work findings )

• Higher Employee Engagement and Alignment - a good company reputation is a key driver for employee pride and engagement. A strong reputation is a leading indicator for employees willingness to deliver on the company strategy (RI findings from Employee Reputation and Alignment studies)

What is the Return on Reputation?

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The chart on this slide demonstrates that the RepTrak® Portfolio has outperformed the S&P500 Index since 2006. It has also done so by an increasingly wide margin since the financial crisis of 2008. An investment of $100 in the RepTrak® Portfolio would be worth $250 in 2013, whereas investing in the S&P would net approximately half of that, at ~$140.

There is a strong link between Reputation and Stock Price (U.S.)

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REPUTATION LEADERS NETWORK5 point change in pulse results in 8.6% change in recommendation

Would recommend company 7% 10% 27% 52% 85%

Would buy the products

Reputation Score

8%

Would say something positive

Would work for

Would invest in

Would welcome into local community

14% 32% 57% 85%

7% 12% 29% 56% 86%

7% 10% 21% 38% 69%

6% 9% 19% 34% 69%

9% 15% 32% 56% 85%

Poor0-39

Weak40-59

Average60-69

Strong70-79

Excellent80+

Would trust to do the right thing 7% 10% 25% 47% 81%

+2%

+5%

+4%

+4%

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REPUTATION LEADERS NETWORKHow does a positive Pulse movement impact Supportive Behavior?

Highlights

• Merck’s reputation score went up 10.2 points in the last year.

Besides its improvement in the Pulse score, it also significantly improved in all 7 dimensions of reputation ; 13 point increase

in Workplace!

• This increase in reputation resulted in 12% points increase in

recommendation and 7% point increase in trust

• In 2014 Merck expanded its product portfolio with

acquisitions and , is pioneering in the field of immunotherapy

through Keytruda, one of the first immunotherapies in the

market as of 2014.

• One of the U.S.’ top CSR spenders, Merck has an ample social

responsibility portfolio geared towards expanding access to healthcare in needy populations

• One of the first to get involved with the Ebola outbreak

“At Merck we believe there is strength in differences. Our ability to continuedelivering on our mission of saving and improving lives around the worldrelies on having globally and locally diverse teams of talented employees atall levels…That’s why we are deeply committed to fostering an inclusiveenvironment that embraces different perspectives and values thecontributions of each individual.”

Kenneth C. Frazier

Chairman and CEO, Merck

Would recommend

Would buy

Would trust

RepTrak®

Pulse Score

29%

32%

30%

41%

40%

37%

MSD201570.2

MSD201460.0

Welcome to neighborhood 31% 43%

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REPUTATION LEADERS NETWORKTime for a change : Bayer

Would recommend

Say positive

Would buy

54.5%

55.4%

59.2%

56.6%

59.5%

59.4%

Highlights

• Bayer’s strong products and

recognizable brand has resulted in a strong reputation…but its time for a

change

• Bayer expands consumer care

segments and shifts production to life

science products, exclusively

• Work environment increasingly

shifting towards gender parity and

reflects demographic trends

• Corporate giving, education initiatives

and sustainability efforts align to mission of improving life quality

“Bayer opened up a new chapter in its history:we initiated the decisive step toward becominga pure Life Science company. In the future wewill focus our entire innovative capability ondesigning molecules and solutions that improvehuman health or nutrition. Never has ourmission “Bayer: Science For A Better Life” moretruly reflected who we are and what we do.”

Dr. Marijn Dekkers, Chairman of the Board of Management of Bayer AG

71.71 72.59

76.26 75.83

2014 2015

CSR RepTrak® score

RepTrak® Pulse

POOR

<40AVERAGE

60-69EXCELLENT

>80STRONG

70-79WEAK

40-59

Bayer AG, 2014 Annual Report

Trust 55.0%55.4%

Bayer2015

Bayer2014

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the 2015 u.s.healthcare...

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