The decline of the pharma sales reps
guest blogger Daniel Hoffman: Many people who live in the Philly area, a huge hub of the pharmacy industry, know that the drug makers have been laying off sales reps. Lots of them. This week IMS Health, a supplier of sales and marketing data, sponsored a conference near the airport where speakers and panelists claimed the downsizing trend would continue for the foreseeable future. And those sales people that remain will soon work at vastly different jobs.
The decline of the pharma sales reps
Daniel Hoffman
By guest blogger Daniel Hoffman:
Many people who live in the Philly area, a huge hub of the pharmacy industry, know that the drug makers have been laying off sales reps. Lots of them. This week IMS Health, a supplier of sales and marketing data, sponsored a conference near the airport where speakers and panelists claimed the downsizing trend would continue for the foreseeable future. And those sales people that remain will soon work at vastly different jobs.
In the decade between 1996 and 2005, the so-called “golden years” for sales reps, their ranks more than doubled as many companies used “mirror” deployments with four to six different reps visiting each physician. The total cost for each rep on the street rose to over $475,000 a year at some companies.
But as the number of new product introductions declined by mid-decade, the productivity and credibility of reps also fell. Moreover, by 2007, one in five physicians refused to see any pharma reps. And today nearly one in four refuse to meet with reps.
The changing numbers and role of sales reps also reflects changes to the industry's customer base. As hospitals and healthcare systems (what some call “integrated delivery systems,” IDSs) buy more and more private medical practices, a commensurate number of physicians work as salaried employees. Today, less than half of physicians own the practices where they work.
Within hospital systems individual physicians will no longer decide the optimal treatments, including drug selection, on their own. Those decisions will be made by therapeutic committees at the various IDS headquarters, each composed of “wisemen”drawn from various specialties. Ultimately, these committees will become pharma’s influential customers.
As a result, the pharma companies will no longer need a Red Army of reps to convince individual physicians to buy product. The industry “sell” will turn into a business-to-business affair. Selling or, strictly speaking, representation of product features and benefits will be replaced by efforts to create and nurture enduring relationships/alliances with the hospital-based practice systems.
In my own work I’ve told clients that pharma companies can no longer think in terms of promoting sales transactions. They have to think about developing win-win-win relationships that benefit the patients, the practices and the companies.
In short, good business relationships will help foster better medical care while controlling costs. The role for traditional reps in this emerging setup will be far smaller than it was.
To check out more Check Up items go to www.philly.com/checkup.
They're pedaling poison anyway.— RightWingHypocrite- pharma sales reps losing their jobs should = more 'talent competition' at local strip clubs - excitement!— PhillyExcitement
- Hey RightWingHypocrite - did you know that cardiovascular and oncology mortality has significantly dropped in the past 10 years? That "poison" is the reason. Pharmaceutical products are like lawyers - you think ill-will of them until you need them and realize they can save you life!— EagFlyPhilSix
- Geez...in the not-too-distant future, will there be anything left in America that's NOT controlled by big corporations?— everydayguy
- thats odd, because i see advertisements every single day for pharma sales reps...everyday on monster, careerbuilder, simply hired..etc.— tdoc
- Sorry but lawyers are a big problem in this country and affect us more negatively than anyone can fathom. If we just change our tort system to a loser pays system like other developed countries you would see the cost of so many things dramatically reduced. But let's keep the fat cat lawyers around and kill the pharma rep jobs that were a huge contributor to the growth of the middle class. And tdoc how ant there be jobs on those websites...that would mean that maybe Tom Corbett had a point about people enjoying their unemployment benefits.— ResponsibleAmerican
- Sorry but lawyers are a big problem in this country and affect us more negatively than anyone can fathom. If we just change our tort system to a loser pays system like other developed countries you would see the cost of so many things dramatically reduced. But let's keep the fat cat lawyers around and kill the pharma rep jobs that were a huge contributor to the growth of the middle class. And tdoc how ant there be jobs on those websites...that would mean that maybe Tom Corbett had a point about people enjoying their unemployment benefits.— ResponsibleAmerican
- Yo Excitement, that's a great one! All the hot female drug reps will go to Delilah's...— Domenic
- Here's the future for pharma: www.ECSspartan.com— cowand
- Abington Memorial Hospital
- Agency for Healthcare Research and Quality
- American Medical Association
- Aria Health
- Centers for Disease Control and Prevention
- Centers for Medicare & Medicaid Services
- Consumer Medication Safety site from ISMP
- Cooper University Hospital
- Crozer-Keystone Health System
- ECRI Institute
- Inquirer Health & Science
- Institute for Safe Medication Practices
- Jefferson Health System
- Kaiser Health News
- Kennedy Health System
- Lourdes Health System
- Medical Society of New Jersey
- Mercy Health System
- New Jersey Department of Health and Senior Services
- New Jersey Hospital Association
- NPR.org Shots
- NYTimes.com: Well
- Penn Medicine
- Pennsylvania Department of Health
- Pennsylvania Health Care Cost Containment Council
- Pennsylvania Medical Society
- Pennsylvania Patient Safety Authority
- St. Mary Medical Center
- Temple University Health System
- Tenet Healthcare
- The ACP Advocate Blog by Bob Doherty
- The Chester County Hospital
- The Hospital & Healthsystem Association of Pennsylvania
- U.S. Department of Health and Human Services
- U.S. Food and Drug Administration
- Virtua
- WSJ.com Health
