Pharma’s changing salesforces
pharmafile | November 8, 2005 | Feature | Sales and Marketing |Â Â Â
The traditional salesforce model has served the industry well for 30-40 years and has been one of the biggest drivers behind continuous industry growth over the last few decades.
Achieving the highest volume of calls to doctors has generally been the objective, with salesforce numbers rising rapidly since the 1990s.
Analysts Deutsche Bank estimate the top ten companies have invested in an additional 35,000 US medical representatives over the past five years, bringing the total number to 65,000 reps in the US.
In the UK, numbers have risen steadily as well, with estimates varying from 10-12,000 field-based representatives in the UK to as many as 20,000.
But the days of competing companies trying to outdo each other through sheer weight of numbers seems to be coming to an end, with companies now looking to re-organise and trim salesforce numbers to achieve greater return on investment.
The spiralling cost of salesforce budgets (which in some cases now rival R&D investment) has been further questioned in light of additional challenges which threaten to curtail the growth of pharmaceutical companies.
Weak product pipelines, increasing R&D costs and growing demands from regulatory authorities, drug pricing pressures and patent expires, have all forced cost pressures on large and small companies.
The US is the world's most important pharma market and has the biggest rep headcount as well.
Wyeth has cut its 2,500-strong workforce by 15% in the US and recently gave firm indications that it would now streamline its European salesforces along similar lines.
The changing face of UK salesforces
Bernard Poussot, head of pharmaceutical operations at Wyeth, said: "We're looking internationally. Our European affiliates have started to assess their salesforces, and analysts could expect similar results to the US restructuring."
Poussot said initial response from doctors in the US to the cuts had been positive but added that companies still saw salesforce promotion as a key tool in keeping particular drug brands in doctor's minds.
Wyeth would be considered a medium sized company in UK terms, but companies of all sizes are now challenging long-standing assumptions about the salesforce.
Takeda UK, another medium-sized company made the most high-profile change to any salesforce last year when it launched its network of Regional Account Directors (RADs).
Andy Davis, the company's managing director at the time argued that Takeda could not compete against the marketing muscle and broad portfolios of the bigger companies.
"Those big companies are far happier if you try playing the same game as them with a fraction of their resources," he told Pharmafocus last year. "If they can afford to do it five times and we can only afford to do it once, they are always going to win."
The company launched its new RAD network earlier this year and hopes a more valued-added service to PCTs will help its flagship products – diabetes treatment Actos and hypertension drug Amias – gain market share.
UK salesforce of the future
Ron Collins, a leading independent consultant on the pharmaceutical sector, speaking at a meeting sponsored by CRM specialist Cegedim confirmed that the sales arms race was unsustainable.
He said the model was no longer supportable as the internal pipelines of companies were much more modest and would not be able to support huge salesforces.
"For many companies, the existing model will evolve into a multi-layered and highly targeted form, driven by medium-sized products," said Collins.
These medium-sized products, according to Collins, will include a high proportion of secondary care medicines, like cancer products, which offer a high margin of return for their manufacturers.
He suggested one salesforce model would involve senior medical reps interacting with strategic stakeholders and Key Opinion Leaders (KOLs); NHS liaison staff and specialist teams interacting with PCT executives and prescribing leads; and medical reps interacting with GPs and pharmacists.
This model, Collins said, was already being used by a number of companies, like Pfizer, and predicted similar, more-tailored models would become widespread in the future.
A key feature of this new model would be the enhanced role of account managers, who Collins believes can help influence key decision-making bodies.
Enhanced role of account managers
Last year Pfizer introduced a new type of sales executive – primary care account managers (PCAMs) – who have responsibility across Pfizer's product portfolio within a small cluster of PCTs.
The new account managers were part of an overhaul of the company's UK sales team and Collins said there is growing evidence from the UK and US that account managers will play a crucial role in shaping the prescribing environment in the future.
Account managers, he said, have to set about explaining how a particular product can offer more value to GPs and how it can help them meet targets, like those included in the General Medical Service contract.
In addition, account managers should set about influencing those bodies which influence the decisions of NICE.
"NICE does not make its decision in a vacuum but consults with a range of bodies and is subjected to a number of influences that the industry can legitimately influence."
Collins said it was the task of account managers to access key individuals in patient groups and royal colleges and set the agenda by helping shape the papers they write.
Case Study: Solvay's new approach to selling
Southampton-based Solvay, a small-to-medium sized company with a 160-strong workforce, recently changed its salesforce strategy.
The company has introduced a more targeted sales approach, a mechanism it is using to combat the manpower and marketing budgets of competing brands in the cardiovascular field.
An affiliate of a US company, Solvay has a portfolio of three cardiovascular products, Omacor, Physiotens and its flagship cardiology brand, Teveten, an angiotensin receptor blocker (ARB).
Teveten competes against a triumvirate of heavyweights in the same class: Merck's Cozaar, Novartis' Diovan and Sanofi-Aventis' Aprovel, which have upwards of 65% of the share of voice in the market.
"We have to be a lot smarter with our products. We cannot hit all doctors because we don't have the manpower," said Dianne Hetherington, national sales manager at Solvay.
Teveten, which has around 1% of the ARB market in the UK, is co-promoted with Altana after the two companies forged an agreement to make the most of their salesforce's time in front of doctors.
The ARB class is highly competitive, with legions of medical reps trying to see the same doctors. Hetherington admits there is a "similarity between the products" which confers an advantage for those companies with bigger budgets.
Solvay opted to buy a targeted prescribing list from pharmaceutical marketing data specialist Cegedim – a cultural shift for the company which has previously relied signifincaly on its medical reps for input in targeting prescribers.
"This time we took the brave decision and purchased a target list with no rep input," said Hetherington.
The target list is a ranking of 100 doctors, given to each rep, with the prescribers deemed the most profitable and influential at the top of the list.
Solvay's 94 primary care reps work across 460 territories within 12 sales regions and the company said that 70% of rep contact with GPs had to be generated from the new list.
Hetherington hopes the move will combat what she terms 'wasted call syndrome' whereby reps were wastefully visiting doctors who are unlikely to prescribe up to 25 times a year.
Solvay had predicted some reluctance from their reps in adopting this target list but the company introduced a change of management programme, whereby sales managers were explained the benefits of the new system, including how it would help performance manage reps in the field.
We anticipated a bit of push back from the reps, so we took the decision to change our management programme as well. Before we rolled out the target list, we explained it to our sales managers and got them behind it and then they sold it to the reps, said Hetherington.
The management team also put together a comprehensive meetings tool kit, an educational-based aid that demonstrated how GPs could achieve points from the General Medical Services (GMS) contract. It also set about using immediate follow-up letters once the reps had visited GPs.
Increased sales?
Hetherington said that although it was too early to say whether the target list has generated increased sales of Teveten, the change had undoubtedly resulted in reps planning their contacts with GPs more efficiently.
Planned rep contacts with GPs have increased from an average of 12 per week in 2004 to 21 in 2005. Also of great significance is a noticeable reduction in the turnover of reps from 22% to 9-10%.
While admitting that this improvement in retention of reps might not solely be due to the new target list, Hetherington said the change of direction had won the hearts and minds of reps.
