Physicians: We're not sure we trust pharma sales reps anymore
42,000 and counting. That's the number of jobs that have been shed by big pharma this year, mostly in the sales force. Are there more to come?
By on Dec 5, 200942,000 and counting. That's the number of jobs that have been shed by big pharma this year, mostly in the sales force. Are there more to come? Well, if big pharma wants to maintain a nice healthy profit margin (the biggest by the way of ANY industry) they are going to have to continue to cut costs and at a time when the sales force is becoming less effective I expect a lot more cuts in that area.
At its peak in 2007, the American pharmaceutical industry fielded 102,000 sales reps, said Chris Wright, managing principal for the consulting firm ZS Associates U.S. Pharmaceuticals Practice. Drugmakers have slashed the number to 92,000 since then, and ZS projects the number will fall to 75,000 by 2012 at the latest, saving the industry $3.6 billion.
Pharmas return on investment in its sales force has plummeted. For every 100 reps who visit a practice, 37 place their products in the offices sample cabinet, and only 20 speak to a physician in person, said the New York-based consulting group TNS Healthcare. Profit per drug rep visit fell 23% from 2004 to 2005, said a February PricewaterhouseCoopers report on pharmas future.
The old sales model is broken now, and who knows how it will look in the future, said Peter H. Nalen, president of Compass Healthcare Communications, an online drug marketer in Princeton, N.J. Whats happening is that pharmaceutical companies are realizing there are other ways to reach the doctor instead of banging on the door of the doctor who just doesnt want to talk to you.
1 in 4 doctors works in a practice that refuses to see drug reps.
- About one in four physicians works in a practice that refuses to see drug reps.
- Of doctors who do see reps, about 40% will meet with detailers only with scheduled appointments.
- The by-appointment-only figure jumped 23% during the last six months of 2008, according to a survey of more than 227,000 medical practices representing 640,000 physicians that was released in February.
The survey, conducted by the doctor-profiling firm SK&A Information Services Inc., did not seek to determine why some physicians are giving drug reps the cold shoulder. But physicians and pharmaceutical industry consultants saydoctors have felt besieged by the number of reps visiting their offices and taking up precious time in an era of declining payment.
Last year saw a slight drop in a measure of the quality of detailers relationships with doctors, based on a TNS survey of more than 1,500 doctors. And negative word-of-mouth about pharma rose sharply among physicians this so-called market-resistance index jumped 62% in the last year, TNS said.
Controversies over the drugs marketed as Vioxx (rofecoxib), Avandia (rosiglitazone) and Vytorin (ezetimbe and simvastatin) appear to be making doctors more skeptical of drugmakers as an information source, said Jerome L. Avorn, MD, professor of medicine at Harvard Medical School in Massachusetts.
Doctors are increasingly concerned that the sales pitches from drug reps are not giving them the full story, said Dr. Avorn, author of the 2004 book, Powerful Medicines: The Benefits, Risks, and Costs of Prescription Drugs.
What can the drug industry do?
1. Hire drug reps who have a medical background and who can talk to physicians as peer to peer. This means that pharma may have to spend more on each drug rep but the ROI of that drug rep should increase dramatically because of their medical background and an understanding of drug pharmacology (no a short course for business grads is not the answer!)
2. Nurture drug reps with a medical background- All it takes is a trip to Cafe Pharma to learn how drug reps are turning off the industry big time. With the drug industry treating them like expendable toys anyone that wants a career as a pharma drug rep surely has to like rolling the dice.
3. Spend more online with HCP eDetails- More and more physicians are turning to the Internet for medical information however pharma's credibility issue is quickly becoming a problem for detailing. Time to ask "what value can we bring physicians and how can we provide them with tools (i.e. customized patient education, mobile diagnostic tools) to get trust back and become partners again?"
4. Prepare for the future NOW- This means thinking strategically about where doctors are going to be 4-5 years down the road and thinking "how can we be ready to pounce on new paths to meet physician needs?"
5. Think: Does an HCP need to be detailed on this drug? Some products require more detail because of the complexity of other treatments and the health condition but some, like ED treatments, do not require details. Think and ask yourself: What is the value to the audience?
Change is being forced on the industry because they have focused way too long on tactical initiatives rather than strategic initiatives. The luxury of not preparing is not affordable anymore. Time to embrace the changes that are coming and above all experiment with new ways to make HCP marketing more relevant again.
