We Communications The New Healthcare Brand Imperative

January 2020 THE NEW HEALTHCARE BRAND IMPERATIVE: BE DIFFERENT IN THE FACE OF INDIFFERENCE

2 It is responsible for saving lives, improving quality of life, extending lifetimes and curing disease. Yet, it is a one-sided relationship. Globally, people view the industry with apathy — it only becomes relevant when you need it. In comparison, consumers will wait in line to purchase the latest technology innovation; coveted fashion brands are worth more money at resale than at retail; people buy automotive brands to reflect their personality; consumers have fan favorite personal care and beauty brands. Ironically, it is the healthcare industry that makes it possible for people to engage with and enjoy all these other brands. Yet, consumers and B2B professionals perceive the industry with skepticism, and as faceless, nameless and soulless. The truth: It is anything but. The 2019 Brands in Motion global study sheds light on why this industry is having such a hard time connecting to the hearts and minds of the people it is committed to helping. It also reveals a new imperative. To address indifference on a global scale, healthcare brands need to show up and act differently. The healthcare industry is one of the most innovative and impactful industries in the world.

Brands in Motion found that 61% of respondents across the 7 countries surveyed would shame a prescription health brand if it stepped out of line. Exponential expectations Some of the greatest moments in people’s lives — graduating from school, buying your first house, welcoming your newborn child into the world, celebrating a promotion, fully enjoying your retirement — wouldn’t be possible for many people without the valuable outcomes of the healthcare industry. Yet people don’t necessarily credit healthcare brands with making these moments possible. They view them as an inalienable right. They expect to be healthy. They expect there to be treatments for what ails them. They expect affordable access to the best medical care. And when these expectations aren’t met, the result is distrust, apathy and a belief that they have been betrayed. Unfortunately, the pharmaceutical industry is frequently the target of these frustrations. 3

Questionable ethics The healthcare industry has long had an image problem when it comes to ethics. In recent years we’ve witnessed the trend toward incremental advancement with generic drugs in order to maximize profits. We’ve seen allegations of price gouging, lawsuits over the opioid crisis, sensational media coverage of the rise and fall of Theranos and Elizabeth Holmes, and the scandal around the Chinese pharmaceutical company caught producing faulty rabies vaccines. When it comes to data privacy, last year’s Brands in Motion global study found that 68% of respondents around the world feared their medical records could be compromised. For brands that do operate ethically, it’s certainly frustrating how the image of the majority is tarnished by the actions of the minority. Ethics are top of mind across every industry, not just healthcare. Brands in Motion uncovered an almost universal urge for collective accountability when it comes to using technology ethically: 94% agree the government has a responsibility to ensure companies use technology ethically 96% agree consumers have a responsibility to use technology ethically 97% agree companies have a responsibility to use technology ethically 4

Technology’s entry into healthcare complicates the ethics discussion. Patient data is more plentiful and accessible than before. In Australia, for example, consumers are hesitant to opt-in to the country’s “My Health Record” due to fears about privacy and data protection. In Germany, the health system is far behind when it comes to electronic health records, in part because it is unclear who can access the data and where it should be stored. Unfortunately, the country is missing out on opportunities to deliver better care and save money. In the U.K., media and healthcare stakeholders reacted badly to the announcement that information from the NHS website would be available on Alexa. In addition, AI-powered solutions are raising fears about built-in bias. Providers worry that technology will disrupt the cherished patient-provider relationship and contribute to physician burn out. Tech-fueled healthcare innovations sometimes overpromise and underdeliver, reinforcing the view that healthcare can fall short of expectations. As a result, the ethical debate is gaining momentum, adding an entirely new set of issues and voices to the conversation. 5

Value for price We have entered the era of the million-dollar drug. Gene therapy is making real the potential of new therapies to diagnose, treat or even cure rare diseases. But how are people supposed to access and afford these lifesaving solutions? How does an industry put a price on life and still expect to be loved? The disparities in healthcare accessibility between rich and poor countries, and between the insured and underinsured, have never been greater, and the conversation about price — for individuals, insurance providers and government institutions — has never been more urgent. Some governments, such as China’s, are making a concerted effort to improve access and affordability, but it’s a problem that requires intense cooperation from all sectors to address. Pharma and biotech have tried to explain the high cost and length of time required for drug development, but these stories haven’t resonated in the ways they hoped. Some innovative companies are beginning to approach the issue of price more creatively. One U.S. company has priced its sight-saving gene therapy based on the legal courts’ valuation of the price of sight. In addition, they forged never-before-seen partnerships with payers to share in the cost of the treatment based on the drug’s performance. In addition, many are unaware that pharma companies offer compassionate access programs for individuals or countries that cannot afford their medications. Brands must take a more visible stand around access and price and be progressive in finding new ways to communicate their value. For example, if pharmaceutical companies were more transparent about the potential value of their pipeline therapies prior to approval, in addition to their efficacy, industry perceptions among stakeholders could improve. 6

Wellness weariness Although prescription health is entering tech-driven disruption, consumer health has quieted down after the revolution of wearables, devices and apps from five years ago. Now the industry is searching for the next big thing. In the majority of Brands in Motion markets surveyed, consumers’ emotional and rational responses to the health and wellness category either fell slightly or remained flat. This may be a reflection of “wellness weariness” — an overexposure to content and messages about everything from diet and exercise to beauty and intimacy. With the exception of the Chinese, who are tech optimists, global consumers share a concern about technology’s effect on our physical and mental health — especially younger generations. Respondents outside China who agreed that technology is negatively impacting their health: Consumer health companies need to innovate now to regain their relevance, change younger consumers’ minds on tech and health, and stay ahead of consumer weariness. 46% Baby Boomers 59% Millennials 65% Gen Z’s 7

SEEK INSPIRATION FROM OTHERS The most successful brands in the world connect with people emotionally — as humans. The key? They answer the critical question “Why should I care?” This is a more difficult question to answer than it appears. Most companies answer the questions “What” and “How,” but few truly dig deep to explain “Why.” The healthcare industry could learn by looking to other industries, including smart home and automotive, that have figured out how to explain “why.” For example, the smart home industry has been able to capture the imagination of people, and with that their willingness to join them on the journey to explore the industry’s potential. Further evolved than the healthcare industry is the automotive industry, another highly regulated category in full disruption. After decades of stagnation, rideshare, electric vehicles, micro-mobility, and soon-to-be semiautonomous vehicles are shaking up consumer perceptions. To set the stage for this transformation, the automotive industry is making these advancements real and approachable by helping consumers see that they offer greater safety and convenience, and will potentially improve the environment. Pharma companies could apply these cross-industry learnings by stepping up to lead industry conversations. There’s also the opportunity to partner with tech giants and wellness brands to ethically bring disease awareness and preventative care closer to consumers. So, what’s a healthcare brand to do? Brands are best served when they apply the lessons — regardless of industry — from those who have gone before. Health Tech should borrow from these learnings to inspire people to imagine a new world with tech-enabled healthcare solutions at the center of care. 8

BE HUMAN TO THE CORE How can brands ride this wave of change, convince people they’re relevant and build trust? By keeping people at the center of everything they do. Patients want to feel they are more than their medical history. More than the sum of their data. This human need goes even beyond patient-centricity, a concept more than 48% of companies indicate is top of mind, but few are delivering on well. Being human to the core requires brands to reach deep into themselves, understand what they really are, and be willing to offer up their soul to connect with the soul of their customers. For health brands, this means operating with purpose , promise and personality . One could assume that health brands are good at articulating their purpose. After all, they are in the business of saving lives. But, in truth, they often struggle to express this at the tactical level. Same goes for expressing their personality. Brand and communications managers at larger companies are often under-resourced and worried about breaking compliance. They are tasked with navigating conservative cultures, complex business models and pressure to achieve short-term business goals. On the other hand, smaller healthcare companies have fewer internal obstacles and hierarchies to navigate and can be nimble disruptors. Since many originate as passion projects of their founders, they know who they are, where they come from and why they exist. Therefore, they tend to be more purpose driven, have vibrant personalities and lead with their soul. For all healthcare companies, regardless of size, every communication, every interaction is an opportunity for a human touchpoint. Communicators need to rethink events such as data announcements or regulatory milestones as opportunities to be human to the core — a moment to reconnect with their soul, express their personality and demonstrate their promise in the most human ways possible. 9

GO BEYOND YOUR COMFORT ZONE Prescription health is highly regulated, and communications in this industry have been done in similar ways for the past 10, 20 and even 30 years. Healthcare communicators are molded early on to be risk adverse. However, as the industry is rapidly evolving, it is important to take a step back and re-evaluate the continued effectiveness of these traditional communications approaches. What is needed now are progressive approaches that engineer surprise and create an “ah-ha moment” that connects to people as humans and sparks acceptance. That means showing up differently and in unexpected places — within the confines of a highly regulated industry. 10

Healthcare brands need to show versus tell about their science, innovations and products, emphasizing the human benefit. Showing will help you connect with audiences in a way that telling them about it won’t. Health brands may think they have an advantage here, since they operate in an evidence-based industry, but simply sharing your data isn’t necessarily showing. Healthcare companies also need to go further than sharing their vision of the future. They must provide proof over the promise by being transparent with data, facts, stats and third-party perspectives. Brands must embrace new technologies that enable progressive communications. For example, social media is becoming more commonplace in this industry. Two years ago, a chatbot used in a healthcare campaign was considered extraordinary. This year it is ordinary. What is next? To begin to get people to care about healthcare in the face of indifference, brands need to show up differently. This means no longer saying “no” to new approaches. Rather brands need to ask “how?” Healthcare communicators need to push their companies beyond their comfort zone to be creative and take appropriate risks. They need to look beyond healthcare and apply learnings from other industries. They also need to be human to the core and use every touch point as an opportunity to tell a story on a human level. The rewards for this shift will be breakthrough communications that truly make an impact, build a deeper connection with the people the industry serves, and shift what is currently a one-sided relationship to one of mutual respect. 1 2 3 11

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