Saving Sales - Pharmaceutical Executive

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Saving Sales
As the sales force shrinks, the pressure on reps increases. How do you combine new technologies with old-fashioned face time to maximize sales?

Pharmaceutical Executive


If there exists a magical cure for the concerns plaguing the ever-shrinking pharma sales force today, no one seems to have found it. According to Mike Luby, cofounder of sales consultancy TargetRx, there are creative solutions to these problems, but a multifaceted approach is necessary.

Is pharma's sales force too bloated? How did we get where we are right now?

I think the industry's been a victim of its success. Think about the incredible drug discoveries and medical breakthroughs in the eighties and nineties.

According to the numbers I've seen, there were about 40,000 reps on the ground in 1993 or 1994. In 2006, there were over 100,000. With the pace of medical innovation in the eighties and nineties, it just seemed like it was a good idea to invest in more sales and marketing. These medical breakthroughs radically changed the course of treatment of a lot of diseases. What was getting hidden along the way was that sales and marketing wasn't as effective or as efficient as maybe everybody thought it was.

Cholesterol drugs are a good example. Mevacor was the first statin, and the total market for treatment of cholesterol was probably $50 million at the time. And what is it now? $20 billion? So over that period of time, everybody who's launched a product has essentially made money. Today the market's a little bit more penetrated. There are many more options out there. Some of the really good drugs have gone generic. There's just a really different market situation now. There's a different level of competitiveness. And I think the people who now sit in the executive suite are realizing that a lot of the things they used to do don't work anymore.

Is the recent flurry of restructuring a good thing?

Absolutely. I think companies are realizing the current sales structure isn't particularly effective or efficient. They've also found that it can be frustrating to doctors. And yet, we know physicians still really value reps. They see it as a great way to get information about drugs. There's just a huge need to make this work more effectively, I think.

What kind of company do you think is in a precarious situation?

I think, categorically, all of the big ones have some degree of challenges. Some are reporting nice earnings, but the reality for all of them is that the environment is tougher. I don't think any are immune.

Where do specialty companies stand?

The specialty companies don't have a $50 billion base to grow every year, so there's a more narrow focus on what they need to do to be successful. When it comes to sales and marketing, though, I think their challenges are the same. They don't have quite the size of infrastructure, but they still have to break out of the models and the molds here that are deeply entrenched and highly ineffective.

Do you feel that the current sales model is broken?

Yes. I think the industry's sort of stuck in 1985. There's just a huge need and opportunity to profile physicians and target them more effectively. The prescriber who's much more concerned generally about safety should get engaged differently than the one who's really concerned about efficacy. You'll be appealing to more of their needs. And that's what I think physicians are really calling for. They don't want to be treated like a number—they want to be engaged with stuff, with information and resources that are going to be relevant to them. So the targeting is broken.

Does pharma need to rethink the whole strategy of selling or do they just need to fine-tune it?

Rethink the whole strategy. The model has been: More resources, more reps. The analogy I use is: If you don't speak English, does it help if I talk louder?


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