The naming of pharmaceutical companies is becoming an increasingly interesting area of study — particularly when one looks at how companies get rebranded after major acquisitions and mergers.

At one end of the spectrum we have what might reasonably be known as “the traditionalists”:

  • Johnson & Johnson makes new acquisitions nearly every year. Some of those acquired companies continue to trade under their original names — clearly identified as divisions of J&J. Others disappear as they are subsumed into existing divisions of J&J. And then there are the divisions of J&J that seem to keep changing their names in search of an internal and an external identity — but it is still made very clear that they are operating units of J&J.
  • Teva also makes regular acquisitions … but despite its gradual integration of branded specialty products into its market offerings over recent years, “Teva” remains very clear about its primary objective: “No. 1 in generics worldwide”. And its operating divisions all include “Teva” as a core element of their individual unit names.
  • And of course Pfizer remains reliably Pfizer — and certainly would continue to do so, even if it is successful in its current, rumored pursuit of GSK.

Then there are the “evolutionists”, the two most characteristic of which are arguably:

  • AstraZeneca, which has evolved over time from ICI Pharmaceuticals to Zeneca Pharmaceuticals to AstraZeneca through a series of internal transformations and mergers (most notably with the Swedish company Astra).
  • The aforementioned GSK, whose history can be traced back to the 1770s, but which were two separate companies in the mid 1980s  (Smith Kline & French Laboratories and Glaxo Laboratories) and gradually evolved through a series of acquisitions and mergers — including several other British pharmaceutical companies like Beecham and Burroughs Wellcome — into GlaxoSmithKline or GSK.

And then there is the reverse diversification strategy, best exemplified by the spin out of Hospira and Abbvie from their original parent Abbott Laboratories as a means to increase shareholder value for holders of the original stock in Abbott.

Yesterday, we saw the completion of yet another adventure in the re-naming of a major pharmaceutical company — with Actavis completing the previously announced change of its name to Allergan (the name of the company it had acquired in March this year).

This re-naming of Actavis as Allergan is somewhat unusual. The justification put forth by the company can be seen on the new corporate web site. The new Allergan remains one of the major providers of generic pharmaceuticals, and plans to retain the use of the Actavis name for its generics businesses in the USA and Canada (just as Novartis retains the name Sandoz for its global generics and biosimilars businesses). The new Allergan says it wants to be known as a “growth pharma” company … but surely the way to ensure that is through actions, not a name. It’s not as though the original Allergan had an outstanding reputation as a “growth pharma” company — although its success at finding new opportunities to sell Botox is certainly unquestioned.

The question one asks as a communications strategist, however, is ‘Can we accurately measure, over time, the value of the “uber-brand”?’ What is the brand value of the name Johnson & Johnson or Pfizer? Is the simpler Sanofi really more valuable than the bipartite Sanofi-Aventis (used by the merged conglomerate for several years until last year)? Is the brand name Allergan really of greater value than the brand name Actavis? One has to assume that the company did some careful market research before finally committing to this name change. But are the tools we use to measure such value today really as good as some would have us believe?

The clearest example of an acquirer understanding the value of corporate pharmaceutical brands in the recent past would appear to be Roche’s very deliberate and strategic retention and expansion of the Genentech brand in the USA. Rightly or wrongly Genentech is almost synonymous with high quality innovative biopharmaceutical research and development here in the USA. Roche … not so much. The careful use of the two brand names has played to the strengths of the two identities in differing markets. Some of the other re-banding processes in recent years don’t seem to come with quite the same level of clarity for the customer.

About Mike Scott

Mike Scott is a highly experienced health care communications strategist with Calcium. He is also a board member of three different patient advocacy organizations. To get more detail, see his profile on LinkedIn.

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