Amid controversies, J&J voted most admired pharma
- Despite a recent string of damaging news, Johnson & Johnson ranked as the No. 1 pharmaceutical developer on The World's Most Admired Companies, according to an annual Fortune list released Tuesday.
- To create its 2019 list, Fortune compiled survey responses from executives, directors and analysts who rated companies within their industries based on nine criteria. For pharmaceuticals, J&J finished first in each of the criteria, which included long-term investment value, innovation, global competitiveness and social responsibility.
- Non-pharma execs and analysts also reported a positive view of J&J, helping it to snag the No. 17 spot on a separate "All-Stars" list of the 50 most admired companies across industries.
J&J's business came under fire in recent months. A Reuters investigation published in December found the big pharma knew for decades its talc powder had at times tested positive for carcinogenic asbestos. While J&J denounced the report as "false," it subsequently lost tens of billions of dollars in market value.
Less costly but still problematic, J&J on Tuesday agreed to pay $120 million to settle a 46-state lawsuit claiming the company's subsidiary DePuy Orthopaedics misrepresented the effectiveness, longevity and safety of two hip replacement products.
Though J&J faces thousands of consumer lawsuits, it maintains a strong, positive reputation among business execs and analysts both within and outside the industry. It's been the No. 1 pharma on Fortune's Most Admired Companies list since 2014 and on the All-Stars list for at least the past decade.
To be on the Most Admired Companies list, a company had to rank in the top half of its industry survey. The survey encompassed only the highest-revenue companies from each industry. Eight drugmakers ultimately made this list.
- Merck & Co.
- Bristol-Myers Squibb
J&J isn't the only company on the list to face public criticism, either. Novartis' recent dealings with President Donald Trump's former lawyer Michael Cohen caused quite the stir last summer, while Pfizer and AbbVie have been scrutinized for their pricing on some of the best-selling products.
Those examples reflect a larger and well-documented reputation problem for pharma. Patients are outraged over high drug costs, and many believe drugmakers hold too much power in Washington. By mid-August of 2018, Gallup polls were showing more than half of responders had an overall negative view of the pharmaceutical industry.
Amid the backlash, several companies have made their pricing practices a little less opaque.
J&J, for instance, has begun publishing annual reports about drug pricing transparency. On its fourth quarter earnings call, execs also discussed how, based on employee feedback, they've tweaked the company's credo to be more patient-centric.
"These enhancements explicitly put the patient first and at the center of our focus, reflect the needs of a changing world in a new generation of employees, underscore our commitment to diversity and inclusion and solidify our commitment to improving the health of humanity," CEO Alex Gorsky said on the call, recycling some of the industry's usual refrains on patient focus.
Yet even with those moves, industry trade group PhRMA — of which J&J is a member — has rallied against legislation that would require transparency, and instead tried to steer the conversation away from prices and toward the science and innovation underpinning drug development.
For the 2019 All-Stars list, consulting firm Korn Ferry asked 3,750 executives, directors, and securities analysts who responded to the industry-specific surveys to pick the 10 companies they admired most. Both the industry-specific and All-Star surveys were sent out in October and November and returned in November and December, according to Fortune.
J&J did not respond to BioPharma Dive request for comment.
Follow Jacob Bell on Twitter