The Changing Pharmaceutical Sales Landscape
Pharmaceutical sales force leaders face a variety of challenges, from competition with other firms and increased competition from generic drugs, to reductions in the number of sales reps and rumors of replacement by peer-to-peer selling models. Sales leaders are also finding it difficult to comply with expanding regulations, and despite training to sales representatives, compliance violations have occurred.
Compliance laws and policies governing pharmaceutical representative access and interactions with healthcare professionals now exist at the federal, state, and local levels. At the federal level, sales representatives must comply with policies issued by FDA and the Office of the Inspector General (OIG), and additional legislation is likely to come. At the state level, laws being passed are even more restrictive: The District of Columbia’s SafeRx Amendment Act of 2008, for example, requires that pharma sales reps be licensed by the District to sell pharmaceutical products. Many believe that DC will not be the last jurisdiction to pass this kind of state law. Locally, healthcare institutions and Academic Medical Centers (AMCs) have also created their own policies regarding pharmaceutical representative access and interactions with healthcare professionals.
When pharmaceutical representatives fail to comply with these laws and policies there can be severe consequences. Federal compliance violations can result in large fines and/or Corporate Integrity Agreements (CIAs) that include ongoing scrutiny and instructions for internal changes. Violating healthcare policies can result in loss of access to providers, and damage a pharmaceutical company’s corporate reputation, thus eroding public trust.
Preventing Compliance Violations
In order to rebuild public trust, forestall further restrictions, and maintain access to healthcare providers, pharmaceutical sales leaders need to take steps to prevent future compliance violations. This starts with identifying and addressing the source of compliance violations.
According to the Compliance and Ethics Leadership Council at the Corporate Executive Leadership Board, sales representatives in the field are responsible for the majority of pharma compliance violations, but a significant proportion are due to improper management or executive conduct. Therefore, appropriate solutions need to address not only sales reps’ behavior, but also leaders’ behavior and the corporate culture regarding compliance within the organization.
All pharmaceutical firms offer extensive training for sales representatives; this includes knowledge of compliance requirements laid out in the 2003 Compliance Program Guidance for Pharmaceutical Manufacturers issued by the Office of the Inspector General (OIG). If representatives have compliance knowledge but there are continued compliance violations, then there is a problem with knowledge application in the field. This indicates that the problem is not the amount of training, but the type of training.
Research on adult learning has shown that a different kind of training is required to change behavior than to change knowledge. In order to change behavior, you must teach behavior skills and provide practice opportunities, feedback, and reinforcement to ensure that those skills are retained and applied in the field. Regularly scheduled behavioral assessments after training can provide these necessary ingredients.
Behavior-based training should also be used to address upper level compliance violations. However, because violations are occurring at different levels of the organization, changes to the organizational culture supporting these violations are also required. The entire sales organization should be involved in these efforts together, as this will be more effective at changing organizational culture than individual training sessions would be. Sales executives should be involved in management training and assessment, and management should be involved in the training and assessment of sales reps. This will not only help ensure consistent understanding of compliance throughout the organization, it will also help provide modeling and reinforcement to support sustained behavioral change.
The PhRMA Code on Interactions with Healthcare Professionals is a set of voluntary standards published by an industry association. It is an attempt to self-police and thereby ward off further external restrictions. New additions to the Code in the 2008 update include compliance training and assessment requirements and required actions following compliance violations.
The Code states that companies, “should assess their representatives periodically to ensure that they comply with relevant company policies and standards of conduct”. Companies should also, “take appropriate action when representatives fail to comply”. The Code also contains recommendations for the Chief Executive Officer and Chief Compliance Office of a company to certify compliance with the PhRMA Code.
An added incentive for following the PhRMA Code guidelines is their consistency with the recommendations to change behavior provided above. For example, in order to assess representatives for compliance with policies and standards, you would need to assess representatives’ behavior in the field, which would also help reinforce behavioral training. “Taking appropriate action” for compliance failures is also akin to providing training feedback. Finally, involving the highest levels of management is an important component in creating an organizational culture of compliance.
Providing Value to Healthcare Providers
Training that addresses healthcare providers’ evolving needs should include understanding of the shifting demographic of healthcare professionals, the growing number of healthcare provider types, and the growing role of payers in healthcare provision. Challenges include growing competition from generic drugs and a need to cater to a growing variety of healthcare provider types, including pharmacists, payers, and other outside stakeholders. Representatives should also be able to address growing requirements for evidence-based information about diseases and treatments. If sales representatives are aware of healthcare providers’ information needs and can help meet these needs in a compliant fashion, they can combat negative perceptions and provide value to both healthcare providers and their employers.
In addition to training improvements, pharmaceutical companies should also take proactive measures to prevent further restrictions and combat negative perceptions. These efforts should include following the 2008 PhRMA Code guidelines and training sales representatives to respond to healthcare providers’ needs in a compliant fashion.
If representatives can help healthcare providers meet their growing information needs they can challenge the negative public perceptions about their value, prevent further restrictions, and maintain access to healthcare providers. This enables representatives to achieve sales excellence and helps pharmaceutical companies position themselves as industry leaders in compliant behavior.
Christina Garofano, senior consultant for WLH Consulting, contributed to this article. She can be reached at email@example.com.
Supply Chain Strategy: Managing risk and opportunity in a changing global landscape