Motivating Reps in Canada and the United States

April 1, 2010
Glen Rawdon

Pharmaceutical Representative

Since 1995, the number of physicians in the United States has grown by 15 percent. In roughly the same period, the number of pharmaceutical sales representatives increased by 94 percent. Given the tremendously uneven rates of growth, it should come as no surprise that there has been increased competition for access to medical professionals and decreased time.

Since 1995, the number of physicians in the United States has grown by 15 percent. In roughly the same period, the number of pharmaceutical sales representatives increased by 94 percent. Given the tremendously uneven rates of growth, it should come as no surprise that there has been increased competition for access to medical professionals and decreased time.

A study by the Health Strategies Group on time spent by sales representatives during office visits showed only 7 percent of visits with a prescriber lasted longer than two minutes and 43 percent of reps did not even get past the receptionist on the visit. The study also showed that 40 percent of the doctors' offices limit the number of sales reps they see in a day. Another survey from Siebel Systems indicated 35 percent of doctors do not make time to see sales representatives at all. A different study found that 20 percent of the physicians in the U.S. and Britain now refuse to see reps.

It is a difficult environment for reps, but over the 24 years that I have spent in the pharmaceutical and medical industry one question has engaged me: How does physician access impact motivation for sales reps in Canada and the United States?

Industry Guidelines

The regulations imposed by states and the pharmaceutical industry groups are additional factors influencing the motivation of sales representatives. In the United States, the Pharmaceutical Researchers and Manufacturers Association (PhRMA) is responsible for regulating various ethical issues and lobbying for the industry. PhRMA provides guidelines on pricing, data disclosure, drug reimportation, generics, marketing restrictions and intellectual property as well as Food and Drug Administration approvals. This also includes such practices as providing gifts and incentives to physicians.

The counterpart to PhRMA in Canada is the Pharmaceutical Manufacturers Association of Canada (PMAC). PMAC creates policies addressing ethical issues in the pharmaceutical industry. In addition, the Pharmaceutical Advertising Advisory Board (PAAB) also regulates marketing-related activities in the pharmaceutical industry in Canada, including advertising, distributing and promoting information in journals and other forms of media. PMAC promotes and advances the necessity for excellence and ethical standards in pharmaceutical companies' promotional activities.

In implementing the practices promoted by PMAC, PAAB and PhRMA, pharmaceutical companies are finding that it is becoming increasingly difficult to develop a good rapport with physicians. The guidelines of these organizations serve to create boundaries and limitations on marketing activities, which ultimately impact reps in the field.

It is essential to acknowledge and understand these newly established limits, especially during the process of recruiting new sales representatives–candidates. The candidates should the requisite competencies and values that will help them thrive within the limitations created by the newly established ethical guidelines.

Metrics and Finding the Right Rep

In Canada and the United States there are various forces negatively impacting sales rep motivation. Reduced access can prove very frustrating, especially for the neophyte rep. A study examining the relationship between physicians and reps found that physicians perceive sales representatives as essential sources of information when it comes to drugs; however, they also believe they can still locate the needed information without the rep's help. The study implies that while the role of sales rep is important, their absence has relatively little impact on physician prescribing behaviors as physicians have other means to generate drug-related information.

Career Aspirations

Fewer interactions with reps can lead physicians to have a poorer understanding of the importance of sales representatives. It is critically important to immediately enhance the image of sales reps among physicians. Management of pharmaceutical companies in both countries must therefore strive to select reps that have competencies and values that can help create a positive perception for sales reps. This has led many companies to institute Behavioral Event or STAR interviewing techniques and tools in attempts to address these hiring issues.

Many companies are more focused on metric to determine the right candidate. There have been efforts by a number of pharmaceutical companies to determine the right number of visits by sales representatives to physicians ensuring the most positive impact on physicians' prescribing behavior. This is in direct response to the limited access issue of physicians by sales representatives. In the case of pharmaceutical companies in Canada, the frequency of visits of representatives is dependent on its relative value. As a result, primary care representatives and specialty representatives target high prescribing physicians more frequently.

According to interviews, the rate of visits may be decreasing in big pharmaceutical companies and rising in smaller pharmaceutical companies. Establishing the right number of visits to each level of physicians is critical, as too frequent visits may annoy physicians while too few visits may allow provide an advantage for competitors.

One of the most pertinent metrics a pharmaceutical company can use in evaluating the marketplace is segmenting physicians. Such measures include sales force spending per representative (including both primary care and specialty care), number of representatives calling on physicians by level, resource allocation for primary care and specialty sales forces and representative daily activities (including average target visits per day; time spent calling on non-physician targets like nurse practitioners, physician's assistants and office staff; and administrative workload). Such metrics assist in finding the most appropriate way to understanding and targeting physicians.

Physician Distrust

Many doctors in the U.S. and Canada distrust sales reps. In one survey, 44 percent of physicians in the U.S. stated that they generally trust pharmaceutical companies, but it is also critical to note that 19 percent responded that they unequivocally distrust sales reps.

This situation is quite alarming and it is possible the situation may even worsen if reps do not find a better way to interact with their primary clients. In the Prescriptions for the Smart & Lean Pharmaceutical Company survey, 38 percent of physicians have resolved to decrease the time they spend with sales reps.

In Canada, Dr. Joel Lexchin has argued that promotional activities of pharmaceutical companies could lead to conflicts between business-related purposes and the necessity for ethical and scientific principles. To motivate Canadian reps, managers must focus on developing consistency between business objectives and ethical and scientific principles. These efforts are even more important considering the spate of controversies surrounding pharma marketing practices. In the U.S. Pfizer was ordered to pay a record $2.3 Billion penalty for the unlawful promotion of Bextra and three other drugs to physicians. Similarly, Lilly paid $1.4 Billion for off-label promotion of its antipsychotic drug Zyprexa. And, in Canada, in 2003 Biovail was fined $25 Million for bribing doctors to prescribe Cardizem LA, an antihypertensive.

Academic Detaling

The Ontario government and some U.S. states are working to create yet another obstacle to pharma's marketing practices. Ontario as well as some states are exploring programs would offer physicians one-on-one "academic detailing" sessions to limit commercial biases. The state and provincial goverments are planning to fund independent experts to visit doctors' offices and provide necessary information regarding medical breakthroughs. This method aims to protect physicians from being misled by sales pitches. According to the Ontario government, "Academic detailing provide balanced messages in the face of perceived commercial influence of pharmaceutical company detailing."

How much attention doctors should pay to the cost of medicine remains a controversial topics. Doctors sometimes dismiss information on pricing as long as the drug appears to be most appropriate choice for the patient. This type of behavior, however, conflicts with efforts in both countries to reign in skyrocketing healthcare costs. Ontario is joining the Canadian movement to lower drug costs, adding further difficulty for sales representatives to navigate.

Dr. Lexchin's hope that Ontario will not offer the academic detailing program alone. If physicians view the independent experts or detailers as government officials, they will think the government's primary aim is to lower drug costs, not improve patient outcomes. Doctors may ignore the academic detailers and still end up listening to pharmaceutical sales reps.

Beyond Business

Many physicians do not necessarily regard the health industry as a business. Rather than having a mere sales transaction, they would prefer an intellectual and sensible discussion with the rep. It is therefore important to train reps to increase their sensitivity to human behaviors and deal honestly with their clients. Sales reps must also be equipped with objective and scientific information about the products they are promoting.

In business dealings, having personal contact is essential. However, sales reps must keep in mind that, in the case of physicians, having less personal contact could actually yield positive results. According to the respondents in the 2004 Vision & Reality survey, physicians want to indicate the manner of contact with pharma sales reps. For instance, physicians want to deal with only one or two sales representatives from each company. The relationship with a physician and the sales rep must go beyond business and should be based on objective and scientific data, rather than commercial arguments.

Physicians find pharmaceutical information provided in response to their questions to be more credible than information offered spontaneously. In addition, credibility requires satisfaction of two criteria: pharmaceutical information must address an existing physician need and it must examine additional mechanisms selected by the physician.

Establishing interpersonal relationships and situational approaches for drug sales requires extensive teaching to budding sales representatives. Pharmaceutical company management, particularly human resources departments, must have a deep understanding of how physicians perceive reps and the factors affecting such perceptions. In the event there are particular attributes that will enhance the effectiveness of the sales representatives, then it is crucial pharmaceutical companies highly develop their sales people in order to inculcate such attributes.

Direct Sales Force Costs

In the present economy, many companies react to a financial challenge by reducing the workforce. In most of these cases, the burden fell disproportionately on the sales force.

  • In 2009: Pfizer, Merck, Johnson & Johnson, AstraZeneca, GlaxoSmithKline and Eli Lilly announced cuts of more than 5,00 jobs

  • In 2008: Merck (8,400), Schering-Plough (5,500), Wyeth (5,000), UCB Pharma (2,000), AstraZeneca (1,400) and Abbott (1,000) led the industry in layoffs

  • In 2007: The top layoffs were at Pfizer (10,000), AstraZeneca (7,600) and Bayer (6,100)

Such responses are only effective and viable in the short term. In the end, it is important to position investments that will address not only the number of sales representatives but also the inherent advantages and disadvantages within the overall company sales model.

In other words, there is a need to challenge the traditional approach to pharmaceutical sales and to consider other selling techniques that are parallel to the requirements and preferences of physicians.

The direct sales force represents a significant portion of the allocated costs for pharmaceutical companies. In 1998 direct face-to-face selling with office-based physicians made up 65 percent of the total expenditures of pharmaceutical companies in the U.S. At that time, the number of pharmaceutical sales representatives in the United States was approximately 57,000 and rose to more than 80,000 in 2004. Given the high cost of maintaining a sales force, it is futile to sustain reps at that level if they do not contribute directly to the bottom line. Even this is only possible if they are properly trained and motivated.

To address the problem of the increasing direct sales force costs, several strategies need to be investigated. For example, pharmaceutical companies with extensive products train sales representatives on more products. Pharmaceutical companies could streamline their sales force, without impacting efficiency by increasing the total number of products sales representatives carry. Aside from the reduced costs, the variability of products is increased and the demand on physician's time reduced which decreases the number of sales representatives from the same company. Moreover, thorough product training is also an effective motivator.

Efficiency Through Efficacy

If pharmaceutical companies hesitate to cut their sales force, it would be helpful to increase the efficiency of sales representatives. One strategy to determine and enhance the performance of sales representatives is to make use of the concept of self-efficacy, a concept developed by Albert Bandura. Bandura defined self-efficacy as the belief in one's effectiveness and efficiency in accomplishing several responsibilities. A study examining 110 pharmaceutical sales representatives in the U.S., found that self-efficacy behaviors have a positive correlation with performance of such behaviors. For instance, if a sales representative has a high-level self-efficacy in planning, then it is more likely that rep will be able to perform planning activities in an efficient manner. The study showed an increase in behaviors such as giving, getting, using and planning lead to an overall improved sales performance.

With the aid of the self-efficacy concept, pharma companies can develop recruitment processes and design suitable training programs. Given the increasing cost of training, the result of embedding the self-efficacy concept in sales training is two-fold: The sales representative will enhance and develop positive behaviors towards their job in sales. The company will save money in the end, as it becomes more effective. In fact, previous studies show there are assertions that self-efficacy is a significant variable for determining the effectiveness of training.

In addition to the previously mentioned strategies, pharmaceutical companies could also adopt a business-to-business (B2B) style of marketing. Since physicians commit to the policies of the institutions they are associated with, it would be more effective to deal with decision makers at institutions such as hospitals.

Rising to the Challenge

Sales representatives are crucial players in the pharmaceutical industry and companies must acknowledge their criticality and develop their skills in becoming effective members of their sales force. Steve Arlington, author of Pharma 2020: Marketing the Future, and global pharmaceutical and life sciences advisory leader at PwC, has stated, "The method of sending out numerous sales representatives just to advertise is no longer effective in these times of recession". Some pharmaceutical companies still claim this method is efficient enough; however, consultant James George, Iris Concise managing director, says that this approach has reached its expiration date in pharmaceutical marketing.

Traditional methods of product promotion are obsolete, posing challenges to pharmaceutical companies to develop new strategic approaches while keeping their sales up as medical breakthroughs continue to emerge from their product pipeline.

Pharmaceutical companies must, to the highest degree, recognize and emphasize a medical marketer's existence as essential to the field of drug research and advertising. Physician access is paramount for a sales representative's success and will be a deciding factor in determining the overall effectiveness of the sales and marketing model.

The challenge for pharmaceutical leaders lies not just in bringing about change, but in having the right leadership. Transformational change is something the sales force carries out rather than the leader, whose role is to create the conditions for change.

Companies that recognize and understand these issues will be able to rise to the challenge. Many pharmaceutical companies are already training their sales reps to be better marketers by redesigning their entire approach to marketing strategy. They have studied physician prescribing behaviors and have created new methods to address the physician access barriers.

Although some models and strategies are still theoretical, they offer a bright future for the pharmaceutical companies. The possibility remains to increase sales and cause physicians to look to sales representatives for critical information again. As James Robinson has suggested there is a way to develop a stronger relationship between physicians and the pharma sales representatives.

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