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
Personal promotion to physicians exists, in large part, because of the lack of other means for companies to efficiently and
effectively communicate medical information. To the extent that alternative means of communication evolve and are utilized
by physicians, the need for personal promotion may decrease. Industry executives should pay close attention to the ongoing
healthcare information-technology revolution now underway in the United States. With strong backing from the Bush Administration,
Congress, state governments, and private-sector payers, the push is on to deploy electronic medical records (EMRs) and health
information exchanges across the country. Many EMRs contain clinical-decision support tools that prompt a physician at the
point of care regarding tests to perform and products to use. The growth of physician connectivity also means easier access
to medical literature and clinical guidelines. As these tools proliferate, much of the rationale supporting the "feet on the
street" model of promotion will fade.
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
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.
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
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.