In Defense of Sales Reps

April has brought yet more news about layoffs in pharma—the most recent being Johnson & Johnson announcing a 6% reduction, specifically of sales and marketing people. There have been too many headlines to count about staff reductions across the board in biopharma, along with statistics on the restrictions of sales rep calls on physicians in their offices, and limitations on industry-physician interactions. There has been an endless stream of white papers and conference presentations about the changing dynamics of biopharma marketing—indeed, of upheaval in the entire drug discovery, manufacturing and distribution process.

You would think biopharma is a dying industry. You would be wrong.

My growing exasperation at these topics—especially the beleaguered folks who “carry the bag” for the industry—reached a breaking point when I read these sentences in a recent pharma publication:

A few [sales reps] may today still fan out to medical offices, armed with samples and brochures, trying to peddle prescription drugs—but those folks are a dying breed. . . . The era of the ‘blockbuster drug’ is over; pipelines are far less robust; and the physician-focused marketing model has become obsolete.

There are data that belie these points, which I’ll get to in a minute. But the main point I want to stress here is that while the industry is changing and adjusting—this is nothing new. Biopharma, like any industry driven by innovation, continually changes and evolves. We try to fill the pages of every issue of Pharmaceutical Commerce with information on these changes. But the breathless sense of doom from many commentators runs the risk of damaging what is good and strong about the industry, and about how it’s succeeding in functioning better. We do not think anyone should be writing an epitaph for the industry, and specifically for the sales rep.

Here’s some data to mull over: It is true that there are fewer sales reps. ZS Associates recently published data on their count of sales reps in 2008. It is 92,000, down from 102,000 in 2007, the historical peak. ZS projects that it will continue dropping to 75,000 in 2012. I would submit to you that 92,000, or 75,000, is neither “a few” nor “obsolete”—it represents a substantial investment on the part of biopharma in keeping a line of communication open.

Another interesting note comes from IMS Health’s summation of 2008 US sales. A ranking of the top 10 companies shows that their collective revenue dropped from $155.5 billion in 2007 to $148.0 billion last year—a reduction of $7.5 billion. That’s bad. But note that overall, pharma sales were up 1.6%, to $291.5 billion. The bottom half of the pharma industry more than made up for the losses of the top half. That’s good.

Much has been made of shifting from knocking on individual doctors’ doors to “key account management” at managed care organizations and health plans. Here’s the news: MCOs and health plans weren’t invented yesterday. And I bet that pharma reps have been meeting with them for years. Are they doing it more consistently and productively today than in the past? I hope so. Will they still be interacting with individual physicians in the future? I bet they will.

Numerous vendors of sales force automation (SFA) and e-detailing tools have developed innovative, powerful resources for physicians to interact with. As this field has evolved, the concept of a “concierge” that works shoulder to shoulder with physicians to obtain and analyze medical data is emerging. That sounds like the right path to me. The physician role is changing, and their ability to make use of online resources is to be expected. (Actually, they seem to be rather slow on the uptake, given the snail’s pace adoption of e-prescribing and electronic health records.) Notwithstanding all the hubbub about online tools, I don’t see the need for information for physicians, MCO medical directors and other healthcare professionals declining. The sales rep role will evolve—it has to evolve—along with the industry itself.

Nicholas Basta

Editor in Chief