Brand Finance Pharma 25
COVID-19 vaccine race among giants
Since the outbreak of the Coronavirus pandemic, pharma giants, governments, and multilateral organisations have been pouring billions of dollars’ worth into vaccine development – a journey that has been undertaken at record pace, as the world races to bring the pandemic under control through mass immunisation.
One of the fastest falling brands last year, Pfizer,has reversed its fortunes recording a 6% brand value increase to US$4.0 billion. Its partnership with fellow-German biotech company, BioNTech, has propelled Pfizer to become a household name as it celebrated the achievement of creating the fastest vaccine to go from concept to reality – an achievement accomplished in a mere ten months, a journey that would normally take closer to ten years.
Another forerunner in the vaccine race, partnered with Oxford University, is AstraZeneca,whichhas recorded a healthy 18% brand value to growth US$3.2 billion. Despite being hailed as another global success story, AstraZeneca has been hitting the headlines recently for the wrong reasons and has been pulled from multiple countries over fears of blood clot risks.
China’s Sinopharm has recorded a 58% brand value increase to US$2.4 billion, simultaneously jumping 3 spots to 11thposition. Sinopharm is making major strides in the global race to produce COVID-19 vaccinations and has since developed a vaccine with a high efficacy rate, which has already been distributed to millions worldwide.
Sanofi (down 7% to US$3.2 billion) and GSK (down 2% to US$3.5 billion) have entered a partnership for vaccine development. As of May 2021, the vaccine is in the second phase of the trial and has demonstrated positive results.
Alex Haigh, Director, Brand Finance, commented:
“As soon as it became clear that the outbreak of Coronavirus in China might become a global pandemic, the race to develop a vaccine began. Pharma giants have become household names recognised the world over, and there is a direct correlation between the creation of a successful vaccine and brand value growth. Arguably the two most famous vaccine creators – Pfizer and AstraZeneca – have recorded 6% and 18% increases in brand value, respectively.”
Johnson & Johnson retains top spot
Johnson & Johnson has retained its position as the world’s most valuable pharma brand, with a brand value of US$10.8 billion.
Aside from successfully entering the COVID-19 vaccine race - with nearly nine million Americans vaccinated with it as of May 2021 - Johnson & Johnson continues to showcase its position as the world’s largest healthcare company, celebrating several significant achievements over the last year, and ensuring that its approvals and pipeline of approvals remain on track.
2020 was a record year for research and development for Johnson & Johnson, with the brand investing US$12.2 billion, up from US$800 million in 2019. This, paired with over seven billion dollars’ worth of acquisitions, has put the brand in a strong position to continue to grow in the coming year and beyond the pandemic.
Despite recording a marginal 1% drop in brand value, Johnson & Johnson retains a healthy lead over second-placed Roche, with a brand value of US$7.7 billion. In addition to measuring overall brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Alongside revenue forecasts, brand strength is a crucial driver of brand value. According to these criteria, Roche is the world’s strongest pharma brand with a Brand Strength Index (BSI) score of 74.2 out of 100 and corresponding AA brand strength rating.
Bristol Myers Squibb acquisitions leads to strong growth
Bristol Myers Squibb is the fastest growing brand in the Brand Finance Pharma 25 2021 ranking, its brand value up a staggering 84% to US$4.1 billion, simultaneously jumping from 13th to 5th position.
The brand has been thriving since the successful US$74 billion acquisition of Celgene Corporation at the end of 2019, which formed one of the world’s leading biopharma companies, and the results of this are reflected in the pharma giant’s solid financial results over the previous year. Following the acquisition, it undertook a rebrand, including a new logo and website, to unify the two brands and to reflect the new Bristol Myers Squibb. Bristol Myers Squibbcontinues to set its sight on expansion and make strides in strengthening its portfolio, recently announcing plans to acquire clinical-stage biopharmaceutical company, MyoKardia.
Guangzhou Pharmaceuticals Corporation is highest new entrant
There are four new entrants into the Brand Finance Pharma 2021 ranking this year, Guangzhou Pharmaceuticals Corporation (brand value US$1.5 billion) in 19th, CSL (brand value US$827 million) in 23rd, Sandoz (brand value US$643 million) in 24th and Yunnan Baiyao (brand value US$621 million) in 25th.
Highest new entrant GPC – one of China’s largest drug makers – has recently entered a partnership with PepsiCo to jointly develop healthy oatmeal products. Furthermore, as one of the top Chinese medicine manufacturers, GPC has been making significant developments by contributing its knowledge of the traditional Chinese medicine – Banlangen – towards controlling the pandemic.
Brand Finance Medical Devices 25
Medtronic growth strategy pays off
Medtronic is the clear leader across the medical devices sector, with a brand value of US$9.3 billion, considerably ahead of second-placed Fresenius (brand value US$5.5 billion). The Minnesota-headquartered brand leads the way for a further 15 US brands in the ranking, which account for nearly three quarters of the total brand value.
Medtronic is the world’s largest medical technology company and now operates from over 350 locations, across more than 150 countries. The repercussions from the pandemic have been mixed for Medtronic. On the one hand, it has been able to continue towards its expansion strategy of acquiring several smaller companies, with seven alone being acquired in 2020. On the other hand, sales declined sharply as the pandemic significantly reduced the number of medical procedures being undertaken, resulting in a marginal 1% decline in brand value this year.
Alex Haigh, Director, Brand Finance, commented:
“A large part of Medtronic’s business model is acquiring smaller companies into its portfolio. The pandemic turmoil of the previous year has actually fuelled this model and benefitted the brand as it continues to acquire smaller brands that are not as well equipped to ride the wave of the pandemic. These acquisitions, as part of Medtronic’s wider growth strategy, have protected its brand value and would have helped to offset the decline in sales.”
Coloplast up impressive 20%
On average, brands in the Brand Finance Medical Devices 25 2021 ranking have lost 3% of their brand value year-on-year. Bucking the sector trend is Denmark’s Coloplast, recording an impressive 20% brand value increase to US$940 million.
Coloplast has celebrated healthy results, posting strong organic growth across all geographic regions and business areas. Growth in Europe, however, has taken a hit during the pandemic as new patient expansion slows. Coloplast’s strong results are also a consequence of inorganic growth, through the acquisition of Nine Continents Medical, which was completed at the end of last year.
BD is sector’s strongest
With a Brand Strength Index score of 75.2 out of 100 and a AA+ brand strength rating, BD is the world’ strongest medical devices brand. BD prides itself on its holistic approach to CSR. Since 2015, the brand has been striving towards its 2030+ sustainability strategy, driven by the brand’s purpose of ‘advancing the world of health’. This strategy focuses on its contribution to more sustainable healthcare systems, helping to provide healthcare access for all globally, reducing its environmental footprint, and empowering the workforce and communities it operates in.
Brand strength is also a crucial driver of brand value. BD has recorded a 4% brand value uptick to US$4.5 billion. BD played an integral role in COVID-19 testing through the successful launch of the BD Life Sciences–Integrated Diagnostic Solutions team.
Brand Finance Healthcare Services 10
UnitedHealthcare maintains lead
UnitedHealthcare is the most valuable healthcare services brand in the world, despite recording a 4% brand value loss to US$27.3 billion. Providing health care benefits globally, serving individuals and employers, and Medicare and Medicaid beneficiaries, UnitedHealthcare has recorded solid revenue results this year. Thanks to growth within the communities and senior programs, an additional 1.2 million people were served in Medicare and Medicaid advantage, a figure the brand hopes to increase to 1.5 million in 2021.
Fellow UnitedHealthcare Group subsidiary, Optum, sits in 4th position, recording a 4% increase in brand value to US$12.4 billion.
Anthem is strongest healthcare services brand
Sitting in second in the Brand Finance Healthcare Services 2021 ranking and claiming the title as strongest brand is Anthem, with a brand value of US$15.9 billion and a Brand Strength Index score of 73.1 out of 100.
As with brands across the healthcare services sector, Anthem experienced higher-than-expected profits for the majority of 2020 as many Americans were putting off non-essential medical treatments and surgeries. As the nation begins to return to some levels of normality, with the vaccine rollout continuing in full force, there has been a resurgence in care, which will cause a dent to the brand’s profits.
Humana and McKesson up 6%
Humana (brand value US$13.3 billion) and McKesson (brand value US$5.0 billion) are this year’s fastest growing brands in the Brand Finance Healthcare Services 10 2021 ranking, both recording 6% brand value growth.
Humana recorded solid financial results, thanks largely to the increase in its Medicare Advantage program seeing an 11% increase in membership growth.
McKesson has been responsible for the successful distribution of over 150 million COVID-19 vaccinations as at the end of April 2021.
Note to Editors
Every year, Brand Finance puts 5,000 of the biggest brands to the test, evaluating their strength and quantifying their value, and publishes nearly 100 reports, ranking brands across all sectors and countries. The 25 most valuable pharma brands, the 25 most valuable medical devices brands and 10 most valuable healthcare services brands are included in the Brand Finance Healthcare 2021 report.
The full rankings, additional insights, charts, more information about the methodology, as well as definitions of key terms are in the Brand Finance Healthcare 2021 report.
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Please see below for a full explanation of our methodology.
About Brand Finance
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes nearly 100 reports which rank brands across all sectors and countries.
Brand Finance is a regulated accountancy firm, leading the standardisation of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671, and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Definition of Brand
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand value refers to the present value of earnings specifically related to brand reputation. Organisations own and control these earnings by owning trademark rights.
All brand valuation methodologies are essentially trying to identify this, although the approach and assumptions differ. As a result, published brand values can be different.
These differences are similar to the way equity analysts provide business valuations that are different to one another. The only way you find out the “real” value is by looking at what people really pay.
As a result, Brand Finance always incorporates a review of what users of brands actually pay for the use of brands in the form of brand royalty agreements, which are found in more or less every sector in the world.
This is known as the “Royalty Relief” methodology and is by far the most widely used approach for brand valuations since it is grounded in reality.
It is the basis for our public rankings but we always augment it with a real understanding of people’s perceptions and their effects on demand – from our database of market research on over 3000 brands in over 30 markets.
Brand Valuation Methodology
For our rankings, Brand Finance uses the simplest method possible to help readers understand, gain trust in, and actively use brand valuations.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668.
Our Brand Strength Index assessment, a balanced scorecard of brand-related measures, is also compliant with international standards (ISO 20671) and operates as a predictive tool of future brand value changes and a control panel to help business improving marketing.
We do this in the following four steps:
1. Brand Impact
We review what brands already pay in royalty agreements. This is augmented by an analysis of how brands impact profitability in the sector versus generic brands.
This results in a range of possible royalties that could be charged in the sector for brands (for example a range of 0% to 2% of revenue).
2. Brand Strength
We adjust the rate higher or lower for brands by analysing Brand Strength. We analyse brand strength by looking at three core pillars: “Investment” which are activities supporting the future strength of the brand; “Equity” which are real perceptions sourced from our original market research and other data partners; “Performance” which are brand-related measures of business results, such as market share.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+, in a format similar to a credit rating.
3. Brand Impact x Brand Strength
The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4. Brand Value Calculation
We determine brand-specific revenues as a proportion of parent company revenues attributable to the brand in question and forecast those revenues by analysing historic revenues, equity analyst forecasts, and economic growth rates.
We then apply the royalty rate to the forecast revenues to derive brand revenues and apply the relevant valuation assumptions to arrive at a discounted, post-tax present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.