3) LEGAL AND REGULATORY ACTIONS

The recent enactment of New Hampshire's Prescription Restraint Law and the AMA's "Opt-Out" program for prescriber-level data are the latest indicators of a trend that has been accelerating in the past few years—legal and/or regulatory constraints on promotional practices or access to the data needed to manage sales forces. A number of policy makers see these new gambits as harbingers of things to come as other states look more critically at industry marketing practices—driven at least in part by an ongoing spate of negative books and newspaper articles on the topic. For better or worse, industry critics see sales and marketing as driving "inappropriate" product demand and feel that by limiting how promotion is conducted, they can reduce the growth of sales for innovative products. Further restrictions or outright bans on certain aspects of promotion will continue to erode the effectiveness of representatives and represent a key consideration in evaluating sales-force viability.

4) TECHNOLOGY-MEDIATED ALTERNATIVES

5) PEER PRESSURE

The research-based pharma industry has acquired the reputation of being a "herd animal." Companies traditionally have matched the actions of their competitors across large portions of their business. Comments made by senior industry executives over the past couple of years regarding the need for remodeling of promotion have attracted considerable attention, but have not yet spurred definitive action. This may be due, in part, to concerns about the impression that reductions in field-force size would generate on Wall Street about a company's future prospects. One bold move in this area might precipitate a host of "fast followers."

6) PIPELINE STRENGTH

Industry executives increasingly recognize that representatives are at their most effective during the launch of new and innovative products. To the extent that firms are receiving approvals for significant numbers of new molecular entities, sales-force sizes are likely to stay at or near current levels. If the approval drought seen in the last few years continues, pressure to reduce the numbers of representatives in the field is likely to increase.

FEARLESS FORECASTS

What does the future hold? Five years from now, it's very likely that industry sales forces will be smaller. How much smaller? A 10-to-20-percent reduction from current levels seems like a reasonable place to start. What would make that percentage larger? More rapid enrollment of American consumers in high-deductible health plans could trim another 5-to-10 percent off the total number of representatives in the field. If the 2008 election were to leave the United States with a Democratic president and majorities in both houses of Congress, it's fair to assume repeal of the "non-interference" clause in the Medicare Modernization Act, and that alone could add another 20 percent to the losses in sales-representative counts. In addition, by 2012, it's quite possible that there will be at least one state with no pharmaceutical sales representatives at all, due to legislative action.

Is there anything that could reverse this trend of shrinking sales forces? Yes: a return of NDA approvals to the 40-plus compounds-per-year level, with a significant shift back toward primary care products.