S&R Blog


Why Pharma Is Pushing Its Drug Pushers Out

New day. Same story.

Source:Minyanville

The pharmaceutical industry is going through a transformation — not only has it been consolidating with mega-mergers like the one between Merck (MRK) and Schering-Plough, but it’s facing a major patent cliff as the revenues from the blockbuster drugs of the 1990s fall prey to generic competition.

Yet, these larger changes have led to shifts in other parts of the industry, too. Since Big Pharma can no longer rely on new blockbuster drugs to pad their top line, these companies now have to transform how they do business to include the biotech model of finding drugs for diseases with smaller patient populations. This also means a major overhaul of how the industry sells its product to the masses.

Pharmaceutical sales reps will be the first to tell you that the industry is scaling down. Once plentiful — there were more than 100,000 reps in 2005 — the drug sales rep is quickly becoming part of the past. A recent report by Deloitte proclaimed to the industry to change its sales models or bust.

An article in the Indianapolis Star this week shows just how much sales rep are despised by the very doctors they’re supposed to woo. Doctors have been pushing for sales reps to make appointments and cut down their pitch time. In some cases, doctors are asking to ban their presence altogether (one in four doctors now refuses to meet with reps, according to the Deloitte report).

But doctors’ dislike of this incredibly aggressive and confident class of individuals isn’t the only reason that the sales rep is becoming extinct. Doctors are no longer the key decision makers when it comes to what drugs are being prescribed. That decision now rests heavily with consumers (who are highly affected by direct-to-consumer advertising), and even more so with insurers who are the primary payers for the often over-priced drugs being pushed by the pharma companies.

Pharmaceutical companies aren’t blind to the problem. The past year has been a bloodbath for pharmaceutical peddlers. AstraZeneca (AZN) said in 2007 that it would cut 7,600 people by 2013; it later upped that number to 15,000. The company didn’t say where those jobs would come from, but the sales force was offered the buyout first. Sepracor, wholly-owned subsidiary of Japan’s Dainippon Sumitomo Pharma, reduced its number by 530 in 2009, bringing its sales force to 1,325 people. King Pharmaceuticals (KG) eliminated 380 field sales positions last year, bringing its total number of reps down to 720 and Sanofi-Aventis (SNY) cut 750 people from its sales roster.

Jump to 2010: Pfizer (PFE) cut 556 sales reps as part of its broader layoffs due to its merger with Wyeth last year. Earlier in the month, Merck eliminated 400 positions from the Schering-Plough headquarters in New Jersey with a majority coming from the sales team. This is on top of the 1,000 sales reps that Schering laid off in 2008 before its merge.

So how will the new pharmaceutical sales landscape look?

It’s likely that insurance companies are going to be playing an even bigger role in which prescriptions become the drugs of choice. Meanwhile, Big Pharma will likely look to outsourced sales rep to educate those same insurance companies. As a plus for doctors, their knowledge will likely have to come more from medical journals and other non-biased sources.

“Pharma’s challenges require a detailed understanding of each stakeholder’s role and contribution to value,” says W. Scott Evangelista, principal at Deloitte. “By better understanding every stakeholder’s unique needs and motivators, a pharma company would be better equipped to improve its internal capabilities — e.g., knowledge, skills, tools — to interact more effectively with each constituent.”

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[…] rough out there:  tens of thousands of pharma sales reps have gotten laid off in the last 2 years, and pharma layoffs are only getting worse.  With so many people laid […]

Pingback by Laid-Off Pharma Reps: Get a Reference Even Though the Managers at Schering, Merck, or Wyeth Say You Can’t Have One-Advert

[…] rough out there: tens of thousands of pharma sales reps have gotten laid off in the last 2 years, and pharma layoffs areonly getting worse. With so many people laid off, there […]

Pingback by Laid-Off Pharma Reps: Get a Reference Even Though the Managers at Schering, Merck, or Wyeth Say You Can't Have One

[…] rough out there:  tens of thousands of pharma sales reps have gotten laid off in the last 2 years, and pharma layoffs are only getting worse.  With so many people laid off, […]

Pingback by Laid-Off Pharma Reps: Get a Reference Even Though the Managers at Schering, Merck, or Wyeth Say You Can’t Have One | AMUNEWS.COM

[…] rough out there:  tens of thousands of pharma sales reps have gotten laid off in the last 2 years, and pharma layoffs are only getting worse.  With so many people laid off, […]

Pingback by Laid-Off Pharma Reps: Get a Reference Even Though the Managers at Schering, Merck, or Wyeth Say You Can’t Have One | New Drug Rep




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