TOP 25 HEALTHCARE CONSULTANCIES

The top healthcare agencies edged forward cautiously in 2007 as they dealt with the fallout from changes to the industry's code. Gemma O'Reilly reports.

Most agencies in PRWeek's Top 25 Healthcare Consultancies table increased their fees during 2007, raking in a total of more than £50m between them. Given the changes to the sector last year, this was no mean feat.

How they stack up: See a chart of the Top 25 healthcare consultancies

Throughout 2007, agencies experienced a backlash following drastic changes to the industry's Code of Practice the year before. Pharmaceutical firms, afraid of breaking the code and potentially being suspended, have become more risk averse, says Cohn & Wolfe's healthcare MD Jacinta Collins.

‘Clients have increasingly been playing it safer, choosing to buy an adv­ertisement in order to own the content and be wholly accountable,' she says. ‘We have been having more discussions about PR being a more worthwhile high-risk activity in the past 12 months than in the past 12 years.'

Collins is not alone in the view that communicators are having to fight harder to convince clients where PR activity sits in the marketing mix. Clew Communications MD Mary Hicks concurs and adds: ‘PR agencies are having to show more value for money than in the past. Procurement is also playing a bigger part than ever before.'

The good news for pharmaceutical companies and agencies alike is that there were no suspensions of member companies as a result of code breaches during 2007.

Prescription Medicines Code of Practice Authority head of comms Niamh Mac­Mahon says: ‘We've seen an increased engagement with the code from a wider range of ­audiences. PR agencies, marketing and advertising consultancies, event org­anisers and venue providers all now seem to be a lot more aware of the relevance of the code, and compliance is high on everyone's agenda.'

Another reason 2007 was a tough year was because fewer drugs actually made it to the launch stage. ‘It is much harder to get a drug to market these days,' says Axon Communications managing partner Ralph Sutton. ‘A lot of pharma companies are getting drugs quite far along the pipeline and then failing. The pressures of getting a drug to launch are far greater.'

Sutton's views are echoed by Resolute joint CEO Paul Blackburn, who adds: ‘The pipeline is drying up. Much of our work has become more about maximising existing product potential and building the product's value among all stakeholders. There is an increasing generic threat as drugs develop through their lifecycles and building brand value helps to combat this.'

Consumer and lifestyle healthcare, however, appears to have flourished in 2007. Complementary healthcare specialist CCD Healthcare PR entered the Top 25 for the first time this year, and Pegasus PR's fee income grew by 40 per cent as a result of account wins in the consumer area.

Other changes to the industry during 2007 included the proposal from the Office of Fair Trading (OFT) to abolish the Pharmaceutical Price Regulation Scheme (PPRS) and replace it with a system of ­value-based pricing for each medicine. The 50-year-old scheme is usually negotiated every five years between the pharmaceutical industry and the UK ­Government to determine the pricing of med­icines.

However, in August last year - just two- and-a-half years into the current deal - the Department of Health ann­ounced plans to reopen negotiations on the PPRS on the back of a report by the OFT that concluded the scheme should be ­reformed.

The report concluded the pricing system should have a more value-based app­roach to deliver greater benefit to ­patients and better value for money for the NHS.

The decision has angered the pharmaceutical industry and intense negotiations have been taking place. A conclusion is exp­ected by the end of the summer.

If the Government's plan goes ahead, pharma companies will have to demonstrate the cost-effectiveness of their drugs at an earlier stage, which will mean an ­increased focus on this for PR professionals too, says Clew's Hicks.

Axon's Sutton also predicts consultancies will become more involved in communicating the value of medicines from a very early stage: ‘In the past, drug companies have communicated economic data at launch, but we are increasingly talking to companies at a very early stage.'

PRWeek's 2008 Healthcare Consultancies table is published on the eve of changes being made to the industry's code of practice. Following sweeping changes to the 2006 code, July 2008 sees less drastic chan­g­es being made to take into account amendments to the European code last year.

The biggest change will be the relationship between pharmaceutical companies, patient organisations and PR agencies. As part of the new requirements, pharma firms will need to make publicly available a short description of any financial and indirect support to patient organisations.

While consultancies have welcomed the move towards more transparency, there is concern that the new regulations may affect the relationships between pharma and patient organisations.

‘Lawyers will increasingly become more involved in the relationships ­bet­ween pharma companies and pat­ient organisations as the amended code comes into force,' predicts Burson-Masteller EMEA healthcare MD Karen Winter­halter. ‘It will make the process clearer, but could have an impact on the amount of time it takes.'

Ash Healthcare director Carys Thomas Ampofo says there is alr­eady a lack of value of funding for patient groups. ‘Patient ­organisation funding is coming under more scrutiny and it can be difficult to ­account for benefits to a pharma company where activity must increasingly deliver for a brand,' she says. ‘There is a question mark over who will fund them if the pharma ­industry is not in a position to do so.'

While pharma firms have been effective in working alongside patient organisations for disease awareness campaigns, there has also been a shift towards public health issues, which will continue to be a focus in the future, predicts Aurora Communications MD Claire Eldridge.

‘Obesity, alcohol and smoking-­related illnesses have inc­reasingly been in the press. The launch of Pfizer's smoking cessation drug Champix last year is an ­example of pharma firms add­ressing public health needs,' she says.

Consultancies predict that digital will also increasingly become a more important part of the healthcare marketing mix. ‘Healthcare marketing has changed, particularly following the dramatic cuts to pharma sales forces. Companies are looking for other ways to target doctors, and digital comms has a huge role to play,' says Winterhalter.

And despite a looming recession, healthcare agencies are remarkably optimistic, as Resolute's Blackburn exp­lains: ‘Healthcare is lucky. Although there will be a tightening of belts, it won't be as radical as in other sectors.'

INDUSTRY VIEWPOINT Do we need to reassess our approach?
Sarah Matthew, MD, Virgo Health PR
Last year saw several high-profile product recalls, a range of brands receiving safety challenges and a highly visible class action for Vioxx. This, combined with the OFT inquiry into drug pricing and the Government decision to renegotiate the Pharmaceutical Price Regulation Scheme two years early, saw the industry's approach to ‘issues management' significantly challenged at both a brand and corporate level.

Sarah MatthewThe situation was made more acute by the rapidly changing environment. The internet acts as a massive, easily accessed and almost entirely unfiltered archive, which means that negative, unbalanced coverage is now preserved for posterity.

But the internet is no longer just an information repository. It is also a forum for views to be shared and aired. With the advent of web 2.0 almost everyone can get involved, whether as observer, contributor or generator.

So the challenge for companies to provide information in a balanced and accurate manner can feel even more insurmountable and the temptation to not respond becomes even greater.

With nowhere to hide, transparency is the new business imperative. Collaboration with stakeholders and long-term partnership building is the way forward.

Being prepared to engage in the debate directly and put factual information forward in a way that is relevant and understandable is crucial. Generating long-term two-way relationships with all stakeholders, including the media, will also go a long way to ensuring greater balance and accuracy.

Having conversations, proactively and transparently, could help find allies among stakeholders who, when given the full picture, share our stance on an issue and are prepared to fight our corner.

Challenges inherent in evolving stakeholder communication must now be seen as obstacles to overcome, rather than reasons not to try. A proactive, holistic and long-term focus, structured around ‘protecting reputation' rather than just ‘managing issues' in isolation, is now crucial.

NEW ENTRY CCD Healthcare PR
In 2007, CCD Healthcare PR went on a recruitment drive. It then had to move to bigger premises in Soho to accommodate the new employees.

Justin ClarkThe specialist agency's experience ranges from over-the-counter products to health food, complementary medicines and medical associations.

CCD MD Justin Clark cites the agency's campaign for the Horticulture Development Council as one of its best last year. The campaign encourages the public to buy British produce and eat seasonal fruit and vegetables. Its success has seen the agency retain the brief for 2008 as well.
CCD has entered the league table for the first time this year at 21, with total fees of £0.4m. This year it has already landed accounts for probiotic company Detecta and medical facility The Dove Clinic.

NEW ENTRY Say Communications
Wimbledon-based Say Communications rebranded from Euro PR last year, which director Stefi Rucci claims gives the agency's healthcare practice more focus.

Steffi Rucci‘The name change had a big impact on how we felt and it meant that we could focus on the different practices at the agency,' explains Rucci.

Healthcare is a big slice of the agency's business, and the department sits alongside
Say's environmental, economic development and technology practices.

The healthcare division has expanded from its original remit of over-the-counter and complementary medicines to encompass ethical, public sector and medical accounts.

‘We still have an interest in the consumer market but the bulk of our work is in pharma,' said Rucci.

The agency has entered the league table at 23 with £0.3m income from its healthcare practice. It now plans to increase its healthcare staff from the current nine.

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