Nevertheless, this year's league table suggests this challenging environment opened up a wealth of opportunities.
The majority of PR firms listed that featured last year posted healthy growth - and some, most notably HCC De Facto Group at number eight and fifth-placed Galliard Healthcare, positively thrived.
Furthermore, for those companies entering the league table that split out their healthcare PR income, by far the biggest earner - generating a whopping 58 per cent of fee income - was ethical and pharmaceutical communications. OTC medicines and devices earned a further 15 per cent respectively, while seven per cent came from vitamins and alternative and complementary medicines. A mere five per cent was generated from DTC communications.
However, the Sarbanes-Oxley Act reared its head yet again, severely affecting this year's table, with many agencies prohibited from submitting figures.
These range from last year's top two, Medical Action Communications and the WPP-owned Shire Health Group, through large multi-practice agencies such as Weber Shandwick, to smaller owned players, including Athena Medical PR, part of Omnicom. Even so, those whose hands are tied by the SEC's new regulations are still profiled alongside other entrants, with, where possible, figures compiled before Sarbanes-Oxley came into effect and published in Communique (Jan-June 2003).
The table also boasts some new healthcare PR specialists - including Resolute Communications, which set up in December 2001.
Despite being unable to disclose figures, Athena Medical managing director Cherry Wood reports her agency was 'quite active' last year, with two big launches for Lundbeck in the areas of Alzheimer's disease and depression.
The agency also undertook substantial work for Pfizer/Pharmacia in the therapeutic area of overactive bladder disorder.
Elsewhere, Countrywide Porter Novelli head of UK healthcare practice Carolyn Brown claims business was generally buoyant. 'But we didn't grow as much as the previous year, or as strongly as we hoped,' she adds.
A major headache for the pharma PR sector as a whole last year was a much tougher market as R&D budgets were realigned. The Pfizer/Pharmacia merger may have grabbed the headlines, but far more damaging to PR spend was the knock-on effect of previous consolidations, such as AstraZeneca and GlaxoSmithKline.
'With drugs typically taking nine to 12 years to get to market, R&D rationalisation following mergers that happened two or more years ago put a real downward pressure on marketing budgets last year,' notes Brown.
Subsequently, the regulatory environment became more stringent, leading to fewer new drug applications. According to industry publication Pharmafocus (Jan 2003), only 31 drugs were submitted for approval by the European Medicines Evaluation Agency in 2002, down from 58 in 2001. And in the US, the Food and Drug Administration approved just 16 drugs in 2002, compared with 24 in 2001.
'The drugs pipeline is fairly flat at the moment,' admits Galliard Healthcare Communications managing director Marika Freris. 'There are no big blockbusters coming through in the short term and, with a lot of high-selling drugs such as Prozac coming off patent, pharma companies are also losing revenue to generic houses and having to recoup their expenditure by cutting programmes elsewhere.'
Current uncertainties about DTC communications present further challenges.
After widely publicised concerns over disease awareness campaigns backed by drugs companies, in April this year the Medicines and Healthcare products Regulatory Agency published new guidelines on such activities.
This advice states that a campaign 'should not be of such a nature that an individual would be encouraged to approach a prescriber to request a particular medicinal option'.
It is still uncertain what influence proposed EU legislation will have on wider DTC communications issues. With a looser regulatory environment in the US, allied to easy access to data over the internet, most welcome the idea that, for quality reasons, the drug owners should be the ones owning the information.
Given that the Association of the British Pharmaceutical Industry rules for promoting awareness of prescription drugs are currently some of the most liberal in Europe, the UK may yet have to fall in line with more stringent DTC legislation in countries such as Italy and France, creating an even more restricted environment.
'Although the EU DTC pilot in HIV, diabetes and asthma was blocked by MEPs in October 2002, there are still plans for reforms that might become law in 2004,' says Brown. 'Disease awareness campaigns without naming products, currently allowable in the UK, may well become illegal, if the current definition of "advertising" prevails. This would be a backward step for access to information on diseases and medicines for UK patients.'
Others, however, such as Hill & Knowlton chairman of healthcare and pharmaceuticals Nick May, view the situation differently, and expect greater freedoms for promoting prescription medicines. 'The flip side is that it is unethical to keep people in the dark, and in fact there is a greater recognition of patients' rights to information,' he says.
For May, the issue is not whether patients should have more reliable data on their condition and the drugs used to treat it, but who should be delivering this information.
'Whether it is by a patient body or advocacy group, the current situation in the UK is no longer tenable,' he says.
This rise in patient power is also having an impact on the consumer healthcare arena. 'From a brand point of view, consumers are now more well-educated about what a product is and what it does,' says Nexus Healthcare director of OTC Nicky Smith. 'So we have got to provide the proof that something works and we're borrowing PR techniques from the ethical arena.'
This involves a greater focus on issues, rather than product PR, but also addresses the need for health claims to be backed by clinical evidence and third-party endorsement.
Smith points to a recent campaign her agency undertook for Dendron's natural headache treatment, 4head, where, on the back of a nationwide trial and study groups by GPs, Nexus pulled together a report bylined by a health professional, which was launched to the media.
'The journalists used the findings of the report showing the product worked, and coverage included endorsements from medical experts,' she says.
Other issues that are likely to occupy the OTC experts over the coming year include rumours that another wave of products is set to switch from prescription to pharmacy, or pharmacy to general sales list status.
The Office of Fair Trading is poised to make an announcement at the end of June about changes to pharmacy licensing, whereby, if rules are relaxed, consumers could soon be accessing OTC treatments in their local supermarket.
If this happens, while it would open up new avenues for educating consumers, it would also raise the stakes for crisis and issues management experts around areas such as overdosing and drug abuse.
DTC and OTC concerns aside, however, the number one topic currently occupying the UK healthcare sector is the NHS. As the organisation goes through a huge restructuring, including the creation of 304 Primary Care Trusts (PCTs) - which officially came into force in April 2002 - so demand for specialist PR skills has risen.
'The huge shift within the health service, decentralising power and money away from Whitehall, has increased the number of potential audiences we need to speak to,' says Cohn & Wolfe head of NHS & healthcare policy team Jacinta Collins.
This broader communications framework includes those with newly acquired purchasing muscle within PCTs, and those nurses and pharmacists that have recently been awarded supplementary prescribing powers.
It is not yet clear how far these changes present new PR opportunities, however. 'I think supplementary prescribing could be interesting and dynamic over the next two years, as it will allow pharmacists, in particular, to become decision-makers in the management of medicines, opening up awareness-building and educational opportunities,' says Sante Communications MD Liz Shanahan.
Others argue they've been dealing with emerging audiences for some time.
'Even if they have not formerly had the same authority over prescribing, they have still had enormous influence over the prescribing process,' says Red Door Communications founder and director Julia Tollis.
Such developments, aligned with the proposed new GP contract and the current wranglings in Parliament over Foundation Hospitals, underline the need for agencies to develop experts who truly understand the constantly shifting NHS landscape.
There is still great scope for consultancies to benefit from the Department of Health's directive that NHS bodies must talk to the communities they serve - outlined two years ago in its Shifting the Balance of Power project for staff and patient empowerment.
'As with all large organisations, in some areas the NHS has huge communications deficiencies, so there are opportunities to grab the current agenda and make it work,' says specialist NHS PR firm Jonathan Street Communications managing director Jonathan Street.
In these more frugal times, measuring ROI remains a key concern for all healthcare practitioners. The Healthcare Communications Association (HCA), set up in 2001, is launching a practical step-by-step evaluation toolkit next month, aimed at both in-house and agency staff.
'This will be the first time any guidance has been given to people in the healthcare sector on evaluation of health communications,' says chair of the HCA evaluation sub-group Sarah Hart.
As pharma firms continue to be portrayed as the bad guys on issues from third-world drugs policy to support of patient groups and charities, there is still much to be done in the areas of issues management and industry reputation.
As Burson-Marsteller European healthcare practice MD Ralph Sutton sums up: 'Despite being major employers and major sources of export revenue, and investing more in scientific research than any other sector, people are still suspicious of drugs companies. We have to do more to help the industry build confidence with stakeholders.'
TOP HEALTHCARE CONSULTANCIES 1-25
Rank Agency Healthcare fee income (pounds)
02 02 01 % growth
1 MediTech Media 6,789,295 5,769,418 18
2 Edelman* 4,116,000 3,145,000 31
3 Avenue Healthcare
Knowledge(1) 3,527,000 3,789,000 -7
4 Munro & Forster
Communications* 2,982,366 2,164,670 38
5 Galliard Healthcare
Communications 2,777,000 1,608,000 73
6 Ruder Finn UK 2,216,108 2,629,000 -16
7 Chandler Chicco 1,766,619 1,979,612 -11
8 HCC De Facto Group 1,724,000 711,326 142
9 Sante Communications(2) 1,370,629 1,061,551 29
10 Atlas PR 1,318,000 996,896 32
11 Harvard Communications(3) 1,297,000 1,227,000 6
12 Nexus Communications
Group* 1,048,000 661,000 58
13 Jago Pearce 870,631 782,476 11
14 Red Door Communications 839,991 522,099 61
15 Myriad Public Relations(4) 726,000 674,500 8
16 Pegasus Public Relations 651,691 526,830 24
17 Resolute Communications 582,764 - -
18 Euro PR Group* 477,509 442,000 8
19 The Red Consultancy* 385,679 618,322 -38
20 Media Strategy 292,500 160,000 83
21 SNS Group 283,100 - -
22 Portfolio Group 193,842 - -
23 Willoughby PR 167,119 250,442 -33
24 Northbank Communications 153,461 - -
25 Harrison Cowley* 148,095 212,000 -30
Rank Agency Total PR fee income Staff % fee Location
02 02 income
1 MediTech Media 6,789,295 132 100 London
2 Edelman* 14,563,087 122 28 London
3 Avenue Healthcare
Knowledge(1) 3,527,000 53 100 London
4 Munro & Forster
Communications* 3,241,702 50 92 London
5 Galliard Healthcare
Communications 2,777,000 26 100 London
6 Ruder Finn UK 2,954,811 46 75 London
7 Chandler Chicco 2,345,119 21 75 London
8 HCC De Facto Group 3,205,064 44 54 London
9 Sante Communications(2) 1,370,629 20 100 London
10 Atlas PR 1,318,567 24 99 Leeds
11 Harvard Communications(3) 4,229,000 55 31 Middlesex
12 Nexus Communications
Group* 4,461,000 67 24 London
13 Jago Pearce 870,631 17 100 Bucks
14 Red Door Communications 839,991 15 100 London
15 Myriad Public Relations(4) 1,187,404 21 61 Cambs
16 Pegasus Public Relations 790,187 15 82 West Sussex
17 Resolute Communications 582,764 12 100 London
18 Euro PR Group* 1,287,172 16 37 London
19 The Red Consultancy* 7,693,111 106 5 London
20 Media Strategy 650,000 12 45 London
21 SNS Group 1,132,400 12 25 Cambridge
22 Portfolio Group 3,963,847 55 5 London
23 Willoughby PR 922,251 22 18 Birmingham
24 Northbank Communications 153,401 16 100 Congleton
25 Harrison Cowley* 6,432,030 95 2 London
All figures relate to the year end 31 December 2002.
Fee income=PR fees + mark-up.
*Denotes PRCA member
(1) 2002 figures include £2,702,000 from medical education
(2) 2002 figures include £411,189 from medical education
(3) Last year submitted figures as part of Chime Online. In spring 2002,
Chime Online was renamed the Harvard Communications Group
(4) 2002 figures include £7,000 medical education
- As a result of the Sarbanes Oxley Act in the US, PR companies owned by
Grey, Havas, Interpublic, Omnicom, Publicis and WPP have not entered the
league tables this year. The following consultancies, which appeared in
last year's ranking, were affected: Athena Medical, Burson-Marsteller,
Cohn & Wolfe, Countrywide Porter Novelli, Fleishman-Hillard, GCI/APCO,
Grayling Group, Hill & Knowlton, Ketchum, Medical Action Communications,
Manning, Selvage & Lee, Ogilvy, the Shire Hall Group (now Shire Health
Group) and Weber Shandwick.