BEDMINSTER, NJ: Rating Research (RRC) released its second annual reputation rankings study on the pharmaceutical industry this month.
Johnson & Johnson, Merck, and Pfizer came out on top, each earning an AAA, or "highest quality" rating. This was an improvement for Pfizer, which received an AA rating in last year's study. The full survey ranks 19 companies.
Dory Gasorek, principal of RRC, cited increased emphasis on management quality and financial stability as the most notable changes between this year's study and the rankings released in 2002.
The findings, said Gasorek, were largely influenced by "an increasing trend toward developing strategic alliances and buying smaller, innovative pharmaceutical or biotechnology companies." She added, "This puts a premium on sound management and solid financials."
Bristol-Myers Squibb, which experienced "financial and ethical lapses," according to Gasorek, was downgraded to a BBB from an A in 2002. Bayer also dropped, going from an
AA in 2002 to an A this year.
The latest installment included four new companies: Amgen (AA), Alcon (BBB), Allergan (BBB), and Forest Laboratories (BB). RRC attributed Forest Laboratories' ranking, which was the lowest in the study, to a high number of neutral - not negative - responses.
Rankings were compiled by conducting 30-minute telephone interviews with 260 senior executives, and one-hour interviews with 60 industry analysts. Executive respondents were not permitted to discuss their own companies. RRC's rating committee used industry expertise as well as external information sources to perform statistical analysis on the collected data.
Evaluations were based on nine criteria: competitiveness, ethical behavior, CEO leadership, financial stability, manufacturing process, social responsibility, employee retention, marketing effectiveness, and charitable support.