Days of Live Pharma Reps are Numbered: M&A's and Outsourcing - the "Bain/Bane" of the U.S. Pharma Industry

Days of Live Pharma Reps are Numbered: M&A's and Outsourcing - the "Bain/Bane" of the U.S. Pharma Industry

Last night, my sons and I attended a NJ BioPharma Networking Group (NJBPNG) meetup at the Princeton Sports Bar and Grille. NJBPNG is an ad hoc LikedIn group, which you can join (here).

This group is mostly comprised of senior pharmaceutical executives in the research side of the drug industry (click on infographic on the right for more NJBPNG demographics).

It was a good night out with my sons, but not so upbeat for most of the people I met there, many of whom are out of work -- including PhDs, organic chemists, and project  managers.

When meeting new people I usually ask "What do you do?" The most frequent answer I received last night was "I'm in transition," which is one of those "Awkward Euphemisms" for out of work and looking for a job (see other euphemisms listed by Michael Spiro, a professional recruiter, on his blog here).

When I asked "Why?", the response was either mergers and acquisitions or outsourcing, which, I note, was the specialty of Bain Capital in its glory years. Sorry, I just had to throw in a Romney reference and relate "Bain" to "Bane" (i.e., the super-villain nemesis of Batman).

Seriously, outsourcing in the pharmaceutical industry is on the rise. Clinical research is being outsourced to countries like India, and China. Basic research is also being outsourced to startup companies and academia and maybe even overseas.

I also met a few people who are doing very well, thank you. One was the owner of a sales outsourcing agency that specializes in non-personal pharma sales and marketing; i.e., sales calls done by phone via a call center.

"This year has been my best year ever," said this person. He's been doing this for several years. In fact, his prediction for the future of live sales reps is dire: "they will disappear."

Frankly, I had hoped that my son -- a recent Penn State Smeal College of Business graduate -- would make some connections at the meetup that could help him find a job. He doesn't have any pharmaceutical experience, which is what a young recruiter attendee was looking for. Perhaps my son should become a recruiter -- if you aren't qualified for a job, maybe the next best thing is finding a qualified person.

But we learned of one job that my son IS qualified for: one of those people on the phone at the call center mentioned above. It turns out that this is a low-paying, entry-level job paying about $20 per hour. You don't have to be a nurse or former pharma sales rep. In fact, such people are over qualified for this sort of non-personal sales and marketing.

Just like young, entry-level commercial airline pilots bunk together in small apartment nearby airport hubs, young call center employees relocate near the call center and share low-rent apartments. Sounds like Penn State to me!

What advice should I give my son? Should he apply for a job at the call center?

Will Drug Samples Soon Be a Thing of the Past?

Will Drug Samples Soon Be a Thing of the Past?

We all know that the number of pharmaceutical sales representatives have declined significantly since the high point in 2007 when approximately 105,000 members of this species were alive and well in the U.S.

Sales rep visits that included samples have dropped even faster. According to Cegedim Strategic Data (SD), the number of detailer visits that included samples has decreased 35% from 116 million in 2007 to 76 million in 2011 (see " Spending on Drug Samples Continues to Decline").

There are lots of reasons why sales rep visits that include drug samples is declining. For one thing, many physicians are refusing samples because they think they promote more expensive treatments. However, it's more likely due to cutbacks to the sales force. "If we're seeing a decline in samples at this point, today one of the major drivers is the drop in the overall number of sales calls being delivered," Jerry Maynor, director of marketing and business development for CSD's U.S. division. eSampling, where physicians can order samples without the sales rep, is a very minor activity that does not account for the trend (only 5% of doctors want to receive samples by mail only).

What percent of total details include samples? That gets complicated because numbers are all over the place. In 2008, there were 92.93 million details according to data reported here. But CSD says 106 million details in 2008 included samples. Of course, that's a mathematical impossibility. I will have to track down more compatible numbers.

How much do drug companies spend on samples? That's a number in dispute, depending on how you calculate the value of samples (ie, retail value of samples vs. Average Wholesale Price; see here). By CSD's estimate, in 2007, drugmakers spent nearly $8.4 billion on samples. That figure fell to about $6.3 billion in 2011, the most recent data available.

Paula Deen & Victoza: Brilliant or Dumb?

Paula Deen & Victoza: Brilliant or Dumb?

OK. I've written so much about Novo Nordisk's deal with celebrity chef Paula Deen that even I am tempted to say "Enough already! Move one." Well, there is one side of this story that I and others have not yet commented on. That is, what do Novo's troops (ie, sales reps) have to say about it? Specifically, do they think this deal will help them sell Novo's type 2 diabetes drug Victoza -- the drug Deen is a spokesperson for? Or will it hurt sales?

To get answers to those questions, I turned to the Novo Nordisk company board on Cafe Pharma (CP) - the notorious but always entertaining and enlightening pharma sales rep message board. I learned about some other issues that the "troops" discussed, including:

• Heredity vs. Lifestyle as contributing factor
• Is drug treatment the first option recommended when diagnosed with type 2 diabetes?
• The role of the American Diabetes Association (ADA)
• Will Victoza be prescribed off-label for weight loss?

One anonymous commenter,  had this to say:

"This is either the most brilliant marketing strategy ever or the dumbest."

That, of course, remains to be seen.

It's Dumb!
Interestingly, this commenter added some further remarks that offers intriguing insight into the possible strategy of Novo Nordisk's entire diabetes franchise:

"Just think," said this anonymous sales rep, "Paula and her fat fans go from victoza to levemir to novolog. I give her 1 more year and she is on insulin." Not that this rep thinks this is an honorable strategy for Novo to support. "Novo should do the honorable thing here and cancel this deal. Defeat diabetes my ass. They have just done more to cause diabetes than mcd's [McDonald's]. It is like Marlborough Man being a spokesman for Nicorette. Shameful."

Of course, it's possible that this anonymous rep was a rep from a competing pharmaceutical company and not a Novo rep at all. In any case, other commenters had similar things to say, such as:

"Wow. This is a PR disaster. Who were the brains behind this fiasco? Victoza is taking major hits in the media with the whole world now focused on price ($500 a month!) and questions being raised about drug safety and marketing ethics. Novo just bought itself a few million dollars worth of bad publicity. Time to pull the plug to save face."

It's Brilliant!
There were also plenty of posts in defense of the deal:

"Granted, she is still in denial, but she's on Victoza, she's already lost a dress size since starting and it's a Dean family endorsement. Which is even better because it shows it does take a village to help patients with diabetes treat their disease. This is a horrible disease that is difficult to manage. Everyone is playing into Novo's hands with all the press around diabetes and becoming more aware. Novo couldn't pay for all the ads they've gotten over the past week."

"First of all, this whole flap will be short lived. It wont be long before it's been long forgotten. Secondly, PD's hardcore fans couldn't care less about how long she took to reveal her diabetes. If Paula takes Victoza, guess what those hardcore fans are going to ask their doctors to prescribe for them. And there's millions of them too. Most of the critics are selling Novo's management short. Time holds the answer as to what will happen, but my money is on the whole thing being wildly successful.

"the posters who think its ridiculous are the competitors bc they are mad their idiot companies didnt do this first. Its brilliant. Brilliant bc we all know the success rates with Victoza. Our docs rave about it all the time. Theyre not going to write more lantus bc PD was hired by Novo.

"This is brilliant. Do you think Weight Watchers cared when Barkely supposedly trashed their endorsement by saying it was easy money to eat their meals and lose weight? No, it was good TV. This will be for Novo, too. Welcome to big pharma."

From a marketing perspective, is the Novo Nordisk deal with Paula Deen Brilliant or Dumb?
	Brilliant!
	Dumb!
	It remains to be seen.

Someone else pointed out that drug treatment is not the only solution for people with Type 2 diabetes ("T2DM"):

"It is not a 'horrible disease' – it is a disease of gluttony and sedentary lifestyle. T2DM is reversible with implementing healthier eating habits and adding exercise to your daily routine. The alliance with Paula Deen (spelled D-E-E-N) suggests that people can continue to eat what they want and take a drug to make everything all better. Don’t try and spin this alliance as social responsibility – your intentions are purely economic in nature."

You'll Hear More About Heredity and Type 2 Diabetes
The lifestyle change solution POV will be something that Novo and Deen will have to combat as they get deeper into this. In fact, they have already pinpointed "heredity" as the most important factor. This was re-iterated in a comment in response to the above:

"Heredity? Have you ever heard of that? But, what do doctors know? After all, you're an anonymous CP poster, so you know it must only be about gluttony and a sedentary lifestyle. Pick up a textbook some time...you might actually learn something."

In response:

"When diagnosed with t2dm, what are the first instructions a doctor should give to their patients according to the ADA? The answer: diet and lifestyle changes. Why is that? Is the ADA wrong? Are doctors wrong for following the ADA guidelines? Why even bother with this step if heredity is such a controlling factor? Your message to people with diabetes suggests that they can't help themselves without the aid of your pharmaceuticals."

Will the ADA be Caught Up in This?
I'll have to check up on what the ADA has to say about first options. I already know that ADA is part of the deal because the organization has said the Deen family will participate in select diabetes health expos the ADA hosts around the country. It has also been reported that Deen will contribute some of her Novo earnings to the ADA, although no specific monetary amounts were mentioned.

Is Weight Loss a Possible Future Indication for Victoza?
One last point concerns weight loss and whether or not Paula Deen will help sell Victoza for that purpose. CP comments relating to that include:

"She will drop 40 lbs over the next year or less and "bang" we have an unofficial weight loss drug. (no indication necessary) Frankly I think its brilliant, she is probably under contract to eat healthier and exercise....and write a a cookbook with healthier versions of her food. We should look forward to seeing her at the next national POA. May I suggest identifying and adding the weight loss clinic docs in your area to your universe, otherwise you will not get paid Bad press now...millions of dollars later. Laughing all the way to Denmark."

Of course, if Novo or any Novo sales rep were caught mentioning weight loss as a indication, they would be breaking the law and subject the company to hefty fines, as this commenter pointed out:

"glad to hear all the weight loss drug talk. Can't wait to see Novo pay all those off label promotion fines"

Lilly Sales Reps Learn Marketing Lessons From Disney's Animal Keepers

Lilly Sales Reps Learn Marketing Lessons From Disney's Animal Keepers

Lilly sales representatives are learning about customer service by observing Disney Animal Kingdom workers as they "[greet] families at the gate and [answer] questions around the attractions," according to an article in today's Wall Street Journal (read "Drug Sales Reps Soften Pitches").

"Lilly's most recent national sales meeting, held at Disney's business training institute in Florida in February, was devoted to customer service, not product training," said the WSJ.

"Increasing physician satisfaction, it turns out, is a much better way to promote a pharmaceutical agent than simply telling them to write more prescriptions or what the benefits" are, said David Ricks, president of Lilly's global business unit.

I'm not sure it was necessary for Lilly to bring its sales reps to a Disney resort in order to learn about the "new service model," which I have been writing about for the last few years in collaboration with Kantar Health (a client). You can read the latest installment, "Stakeholder Effectiveness: Maximizing the Value of Your Interactions with Multiple Stakeholders" (here - use discount code '101701stake'), which ranks the top 15 pharmaceutical companies on how well their sales reps provide services desired by physicians. Also, you can read the first article in the series, "Reinventing the Sales Model: Moving from Sales to Service" (pdf).

Each year Kantar Health asks physicians in the U.S. and Europe if they have started to notice a move toward a “service model” experience, where other services are emphasized beyond sales reps detailing physicians, such as patient education and information and internet-based services. They quantify this using what is called a TRI*M™ index. The lower the TRI*M, the better service provided and the higher the ranking. The 2009 through 2011 U.S. Primary Care Physician rankings are shown in the following chart (click on it for an enlarged view).

Lilly improved its rank somewhat in the last two but is still not among the "Top Tier" companies such as Pfizer, Merck, and GSK. Hopefully, Disney's animal trainers will help improve Lilly's TRI*M index in 2012.

Some Interesting Numbers Regarding US Sales Reps & Budget

As reported in the WSJ (op cit), "the industry has slashed 33,000 sales jobs in the U.S. from its peak five years ago, when 105,000 representatives flooded the zone. Most recently, AstraZeneca PLC said it would cut its U.S. sales staff by 24%, or 1,150 jobs. The industry spent $14.5 billion on marketing in the U.S. in 2010, down about 15% from five years ago, according to Cegedim Strategic Data."

Predicting the Future of the Drug Industry: 2012 and Beyond

Predicting the Future of the Drug Industry: 2012 and Beyond

It's time to revisit a survey I ran a couple of years ago that attempted to predict future healthcare market scenarios that would impact the drug industry. The survey asks respondents how likely it is for certain events or conditions to unfold in the next 5 to 8 years (ie, 2012 to 2019).




You can take the survey here. But before you do that, let's review the first-round of results (ie, responses collected from 2 December 2009 through 8 January 2010). Events since then may have made some of the following scenarios more or less likely. You tell me.

The scenarios -- with my updated comments included in brackets [] -- that are included in the survey are as follows (see the chart afterward for the first-round results):

1. New follow-on biologics legislation in the U.S. will increase competition from generic equivalents and eventually decrease brand profits. [I think the legislation is still bogged down and when finalized may not have much impact within the time frame specified.]
2. Broadcast (ie, TV) Direct-to-Consumer (DTC) drug promotion will be banned or sharply curtailed by law in the U.S. [This may have been a big issue back in the day, but it doesn't seem to be center stage right now.]
3. The European Union will finally allow Direct-to-Consumer (DTC) advertising to its citizens. [The European Commission, the executive arm of the EU, recently ruled that pharma companies would not be allowed to disseminate information about drugs and their indications beyond a narrow set of circumstances. For the details, see, "In Rejecting Proposal, EU Dashes Drugmakers’ Hopes of Having a Voice"]
4. Internet-based drug promotion (including search engine marketing) will overtake TV-based DTC in the U.S. in terms of dollars spent. [There's still time for this to happen. I'm guessing that right now only about 5% (maybe 10% if you include search advertising) of pharma's DTC advertising budget is spent on Internet advertising whereas TV accounts for over 50% of the budget. See "Double Dip in DTC Spending Plus 33% Drop in Internet Display Ad Spending!"]
5. Due to decreasing effectiveness of traditional physician detailing and rise of non-personal detailing, the role of traditional sales representative will become obsolete. [I'm surprised that over 50% of respondents think this is likely to happen before 2020 (see chart below). Perhaps a sign is the recent closing of Pharmaceutical Representative Magazine (see here). Also read this article: "Consequences of eDetailing Technology".]
6. New healthcare reform legislation will dramatically increase the sales of drugs in the U.S.
7. Extensive outcomes data available to payers and comparative effectiveness research will force the industry much further down the path of pay-for-performance (ie, adopt a more flexible approach to pricing). [For background in this, read the article "A Case for Supporting Comparative Effectiveness Research".]
8. Patients will become even more influential and empowered in making healthcare decisions as they are forced to pay a larger share of costs and/or have access to health information from a variety of sources. [For more background on this, read the article "The Empowered Patient: What It Means for Pharma Marketers".]
9. Despite lack of innovative new drugs and/or generic competition, sales of brand drugs worldwide will show a sharp increase due to increased demand in emerging markets (eg, China). [See the following articles: "Getting Market Research Right in Emerging Markets", "Getting Market Research Right in the Middle East", and "Getting Market Research Right in India & China".]
10. More efficient targeting of drugs and marketing to specific patient populations will greatly increase effectiveness and decrease side effects of drugs. [See, for example, "New Big Pharma Economies of Scale: Less Patients Needed to Reach Blockbuster Sales". At least one targeted therapy (I can't recall which), however, recently failed and that may cast a shadow on progress in this area.]
11. Social media marketing will become a significant part (>10%) of the pharmaceutical marketing mix. [Hmmm... A lot of people seem to believe this is likely (see chart), but FDA's delay in issuing guidance may have dampened the outlook for pharma use of social media.]
12. The next BIG opportunity for targeted marketing to patients and physicians is mobile apps on "smart phones." [To prepare for this, I recommend you read the article "Everything You Need to Know About Mobile Platforms". Take the survey and you will get a discount code that allows you to get this at no charge.]
13. Pharmaceutical and biotech companies will continue to increase their outsourcing of clinical trials and related drug development. Outsourcing will account for more than 50% of R&D spending by 2019.

The following chart summarizes first-round (prior to January 2010) survey results. Please take the survey now and help me get a more current view of what may be dow the road.

Pharmaceutical Representative Magazine Closes. Blame CafePharma!

Pharmaceutical Representative Magazine Closes. Blame CafePharma!

"Pharm Rep Closes After 41 Years" is the title of parting editorial by Reid Paul, Editor in Chief of Pharmaceutical Representative magazine, which was trade publication focused on pharmaceutical sales.

"Nostalgia from my days 'carrying the bag' makes me sad to see this publication go," tweeted Mike Capaldi (@mikecapaldi), Associate Vice President at Sanofi.

"The reality is that pharmaceutical sales and marketing has changed dramatically over the past few years," said Paul. "It's more than a numerical decrease in the number of pharmaceutical sales professionals. The "traditional" sales role of the rep is rapidly evolving into something new and different that defies easy categorization. In the inaugural editorial, founding publisher Bill McKnight wrote, 'If salesmen really needed their own communication medium, then there must be enough sales managers willing to provide it through paid subscription.' While that may have been true in 1971, over the past four decades the publishing landscape has changed equally dramatically. Pharm Rep was one of the first, but now reps and execs have a broad range of options to communicate and find objective information on the industry."

Reps and execs certainly have a much broader range of communication options. As for reps, one of their favorites is CafePharma, an online discussion board for sales reps that is often maligned by pharma executives who have little time themselves for such frivolous activity! When Lilly's Deirdre Connelly described CafePharma as one of those "outlets for people who don't have the courage to speak out with their ideas," it didn't negatively affect her rise up the ranks (see here).

I'm thinking that other glossy print, paid subscription pharma trade publications will follow Pharm Rep down the worm hole of extinction.

Sales Reps in the Wild: An Interesting Way to Promote a Sales Force Effectiveness Conference

Sales Reps in the Wild: An Interesting Way to Promote a Sales Force Effectiveness Conference

I received this Twitter DM (direct message) from @eyeforpharma: "Thought you might like this. youtu.be/gCDeBAD75Pg"

There was also this @eyeforpharma tweet: "Save pharma sales from extinction. This is serious. http://youtu.be/gCDeBAD75Pg #savepharma #e4p #hcsmeu #hcsm #pharma"

Eyeforpharma (aka "E4P") is a UK company that hosts pharma industry conferences, some of which I am paid to help promote via ads on Pharma Marketing Network and Pharma Marketing Blog. I haven't been paid to write this post, however, nor has E4P asked me to write this post as a favor.

So why am I doing this?

In typical UK parlance, I just think what E4P is doing with YouTube and Twitter to promote its Sales Force Effectiveness Conference (find it on the PMN Calendar here) is "brilliant," by which I mean interesting and funny, almost "snarky" to borrow another UK phrase.

I am reviewing this here because I wonder if pharma companies can use some of the same social media techniques to promote their products or other special interests.

The YouTube video that @eyeforpharma thought I would like is titled "REVEALED: E4P Nature documentary discovers reps in the wild." It's a spoof of how pharma sales reps have been known to pursue physicians to detail them about Rx drugs. It's done in the style of David Attenborough's famous Life on Earth nature shows, portraying sales reps as wild animals seeking their prey.

The description associated with the video tells the story:

Join us as we journey to the edge of civilisation where pharmasuiticus rep can be seen in its natural habitat. In order to prevent the extinction of pharma sales entirely, CLICK HERE: http://bit.ly/prevent-extinction

Only a few dying remnants of this species now remain. The E4P team have managed to capture the last of this species and are urgently recommending immediate action in order to revitalise the remaining population.

Thank you also to our intrepid camera crew at www.stantonmedia.com for their courage in coming into such close contact with these dangerous animals.

If you would like to participate directly in the effort to save pharma sales from total extinction then please email psimms@eyeforpharma.com

Twitter: #savepharma @eyeforpharma

The video ends with the message "Your customers have evolved? Have you?" and a link to the conference site.

The last sequence in the video shows the "alpha rep" eating an iPad, which also emphasizes the "unevolved" nature of many pharma sales reps; reminiscent of the apes gaping at the obelisk in Kubrick's film 2001. Here's a screenshot:

Is it just me or doesn't this guy look like Paul Simms, the co-founder and chairman of E4P? Here's Paul as seen on the @eyeforpharma Twitter page:

A video like this must cost a pretty pence! So, it's frugal to use employees as actors. Unless, of course, the video was paid for by one of the sponsors of the conference. I don't see any sponsorship message though.

But how effective will this video be in promoting the conference and increasing registrations? It's gotten  only 172 views as of this post, but I am sure it will get many more now that I have featured it here!

One last thing. I worry about using Twitter's direct messaging (DM) service to do promotions like this. I know Paul personally and whenever he sends me a DM, I open it. I don't know how many other people Paul has DM'ed about this video or if he used an automated service to send out the same DM to ALL of the followers of @eyeforpharma. But if I start to get bombarded ("blasted") with automated DMs from people I follow on Twitter, I will not be a happy camper. To be clear, E4P has NOT sent me many DMs at all.

I use my @pharmaguy Twitter account to send out promotional messages to followers, but I do NOT send automated promotional DMs in a single "blast" to all my followers. I feel that my followers did not agree to that. I do, however, send out one automated DM to each new follower thanking the person for following me and requesting that they fill out my follower survey (see results of that survey here).

Anyway, kudos to E4P for a fun promotion.

Are Pharma Sales Reps Service Employees?

Are Pharma Sales Reps Service Employees?

The Supreme Court agreed to decide whether drug companies have to pay their sales representatives for working overtime hours, "a question that could have considerable financial impact on the industry," according to the Wall Street Journal (see "Supreme Court to Decide if Pharma Reps Are Exempt from Receiving Overtime Pay"). The question (see here) before the court in case "CHRISTOPHER V. SMITHKLINE BEECHAM CORP" is:

The outside sales exemption of the Fair Labor Standards Act exempts from the overtime requirements of the Act "any employee employed ... in the capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the Secretary ...)." 29 U.S.C. § 213(a)(1). The Secretary of Labor has implemented various regulations that "define and delimit" the outside sales exemption and, filing as amici in this and other related matters, has interpreted these regulations to find the exemption inapplicable to pharmaceutical sales representatives. A split exists between the Second and Ninth Circuits concerning whether this interpretation is owed deference and whether the outside sales exemption of the Fair Labor Standards Act applies to pharmaceutical sales representatives.
The questions presented are: 

1. Whether deference is owed to the Secretary's interpretation of the Fair Labor Standards Act's outside sales exemption and related regulations; and  
 
2. Whether the Fair Labor Standards Act's outside sales exemption applies to pharmaceutical sales representatives.

If the Supreme Court rules that pharma sales reps are NOT exempt as per Q#2, some sales reps worry that they will become "service" employees. "This will be a similar model to UPS / Fed Ex etc. Log in.............track activity..........gps............clock out at 5:00 pm." (see this CafePharma thread in the GSK discussion board).

This is interesting considering that the pharmaceutical industry is now moving away from the sales force being the primary channel of promotion focused on a narrow stakeholder audience to that of "a multi-faceted influence model where it has to really maximize its return on investment,” according to Mark Sales, Head of Global Brand and Stakeholder Management at Kantar Health (see "The Changing Pharma Commercial Model in 2010 and Beyond"; a PMN article sponsored by Kantar Health). The new sales model drivers are all about becoming more customer-centric and service model-focused. So, a NO ruling by the Supreme Court in this case would be a good thing for the pharmaceutical industry, aside from the billions in additional expenses?

Reps also worry that their companies would cut back on the number of sales reps and overtime hours to forestall the added expenses going forward. "The problem is that if overtime has to be paid out it will lead to more cuts," said an anonymous CafePharma poster. "Lets face it, the impact of reps has been going down for quite a while."

What do pharma sales reps do in "overtime" (after 5 PM) anyway? It may be "role-playing": "Would the role playing to India at 9:00pm count as overtime?," asks another anonymous CafePharma poster. "Get ready for bye bye role plays after 5pm," said another.

Some reps do not think this is an issue at all: "Since most reps really only work a couple hours a day, this really looks like a non-issue." To which this response was made:

"Actually it's a huge issue! Other big pharma companies have had to pay and pay big! This could cost GSK hundreds of millions. As to your comment about a couple of hours, please stop with that nonsense. I avg about 9 hrs per day. It's not back breaking work (that's why I went to college) but it is work. Inventory at the storage facility, lifting boxes, conference calls, emails, coordinating lunches/dinners, knowing and understanding the complex molecules and how they interact invivo/invitro, analytics, ability to utilize Microfoft word/excel, intrapersonal skillls, the list goes on an on...oh but you say reps only work 2 hours. When are reps supposed to answer email, voicemail, build a business plan? On their office day? Ohhhh that's right, there is no office day. So when does all this work get done? According to you we only work 2 hrs a day. C'mon dude! Look, I'm not saying the law suit is a good thing, but the pharma companies had their cake and got fat eating it."

Are Pharma Reps Important to Docs or Not?

Are Pharma Reps Important to Docs or Not?

Back in March, 2011, I reviewed a PhRMA sponsored survey of physicians the results of which PhRMA claimed shows that "nearly eight out of 10 physicians view pharmaceutical research companies and their sales representatives as useful sources of information on prescription medicines" (see "New PhRMA Survey of Physicians: Are Sales Reps as "Useful" as PhRMA Wants Us to Believe?"). If you look at a chart of the relevant data (see below), however, you see that the 80% mentioned by PhRMA includes 53% of physicians who find sales reps only "somewhat useful." Only 26% of physicians surveyed found reps "very useful."

Yesterday, I came across the Wolters Kluwer Health Point-of-Care survey of physicians, part of which looked at where physicians receive information to make decisions about diagnoses, treatment and ongoing patient care (see press release and executive summary here). This study asked physicians: "How often do you use the following sources to gain information used to diagnose, treat and care for patients?" The results are shown in the following chart:

The trends are comparable (eg, prof'l journals are rank near the top and sales reps rank near the bottom in both surveys), but you can't group the Wolters Kluwer categories "frequently" and "occasionally" together as well as you can group together PhRMA's "very useful" and "somewhat useful" categories. Because of the way PhRMA designed it's study -- using categories that can easily be combined -- they were able to spin the results favorably, whereas no such spin of the data is possible in the Wolters Kluwer survey.

So, looking at ALL the data, IMHO, the best that can be said in answer to my question is that most physicians find pharma sales reps among the least important sources of information they use to help them diagnose, treat and care for their patients.

P.S. (27-MAR-2012) I just came across another study attempting to answer the question "Do physicians find sales reps useful?" The study comes from Cegedim Strategic Data (CSD), a provider of integrated healthcare market research. CSD analyzed physician-reported diary entries of recent sales calls. Results from over 30 countries showed that overall 93.8% of physicians worldwide, both GPs and specialists, "find sales representative calls useful and of value to their practice, based on over 5.6 million product detailing mentions" (find more details here).

I believe CSD's methodology asks physicians to evaluate recent sales calls. This technique eliminates physicians who did not receive any sales calls, which skews the data to favor physicians who like sales reps to begin with. The CSD study does not compare usefulness of reps compared to other sources of information.

In any case, it's amazing how many studies are out there and how difficult it is to get a straight answer to a simple question.

How Sales Reps Can Use Tablets to Fool Their Sales Manager Overlords

How Sales Reps Can Use Tablets to Fool Their Sales Manager Overlords

While reading "How Pfizer Uses Tablet PCs and Click-Stream Data to Track Its Strategy" (see here), I was struck by two thoughts:

1. Pfizer's use of technology to collect sales analytics seems pretty basic; eg, David Kreutter, a Pfizer VP of US Commercial Operations, revealed a source of "predictive analytics" to be a simple Web log that shows what physicians click on and what they click through to when they visit a product website. But Pfizer doesn't have "any greater data on how those clicks translate into prescription writing."

and


2. The "real-time" data they get from sales reps using tablet PCs seems pretty easy to falsify. Here's how Kreutter describes it:
   
   "As they click the screens with their styluses to illustrate points, those clicks are recorded. That’s how we’re able to see things like the order of presentations, the messages within a presentation that were presented, if the physician found it engaging. Representatives synchronize their tablets on a daily basis, and we get a data stream back to our data warehouse. Our customer data master now has all of that click-stream data for each representative and each doctor."
   
   Maybe I'm being a cynic or not understanding the technology, but what's to prevent a sales rep from doing all the clicking while waiting in the physician's office hallway just to drop off samples?

This sort of thing is probably not new -- no doubt sales reps have falsified paper-based sales call reports as well. But now the amount of data coming in from 4,000 representatives, each seeing "about seven or eight physicians a day," and each detailing "about two to three products in each of those calls," provides a false sense of knowing in detail what's going on. As has been said ever since computers were invented, "garbage in, garbage out."

P.S. I also note that Kreutter only spoke about "tablet PCs" and NOT iPads. I guess Pfizer has not yet progressed to using that technology.

eDetailing Technology Spells Death of Traditional Pharma Salesman & Birth of "Sales Cyborg"

eDetailing Technology Spells Death of Traditional Pharma Salesman & Birth of "Sales Cyborg"

"You can't eat the orange and throw the peel away - a man is not a piece of fruit," says Willy Loman in Act 2 of Death of a Salesman. After reading this article in today's Wall Street Journal, many pharma sales reps may be feeling like tossed peeled fruit.

"Big pharmaceutical companies have found replacements for the army of sales representatives they've laid off in recent years: digital sales tools that seek to sell doctors on drugs without the intrusion of an office visit," says the WSJ.

"Tens of thousands of pharmaceutical sales reps have been eliminated in the U.S., creating a void that drug makers are now increasingly filling with websites, iPad apps and other digital tools to interact with doctors who prescribe their treatments."

Let's refer to "digital sales tools that seek to sell doctors on drugs without the intrusion of an office visit" as "eDetailing."

eDetailing in one form or another seems to be making a comeback since the recession hit the drug industry in 2007 and 2008 (see chart on right). I'm not really sure which is the "chicken" and which is the "egg"; ie, whether an uptick in adoption of eDetailing technology lead to the recent layoff of pharma reps or if reps were laid off because of the economy and subsequently replaced by machines.

Despite the title of this post, reports of the death of pharma "salesmen" may be somewhat exaggerated and not all sales reps can be replaced by machines. According to the WSJ:

"When German drug maker Boehringer Ingelheim GmbH launched the cardiovascular drug Pradaxa in the U.S., it put together a digital-marketing package to target doctors, including organizing webcasts for leading physicians to speak to other physicians about the drug. But the company found that sales calls to doctors' offices were still the most powerful tool for driving new prescriptions, says Wa'el Hashad, vice president of cardiovascular and metabolic marketing. 'No doubt digital marketing does have an impact...I don't believe, however, the shift happens overnight. I think it's a gradual shift,' he says."

In the Pharma Marketing News article "The Changing Role of Pharma Sales Reps," Nancy Lurker, CEO of PDI, Inc., says "reaching physicians requires a new level of sophistication. Live rep calls and dinner meetings and other live venues, however, are not going to go away. But the relative market share in terms of the amount of effort and money that is spent on live interactions is going to shrink and you’re going to see more money being spent in the digital communications space."

Some sales reps will morph into what I call "sales cyborgs" who engage in remote live human conversations with physicians aided by technology. See "Pharma TeleWeb e-Detailing" for more information about that.

Predicting the Impact of Technology on Sales
As of now, pilot programs such as TeleWeb e-Detailing have not been evaluated on how well they drive sales, but on other key indicators of success. Notwithstanding push back by some pharma marketing and sales managers, sales technology will continue to evolve and have greater impact in driving new prescriptions.

Back in 2006, Pharma Marketing News hosted a reader survey to predict future trends in the pharmaceutical marketing mix (see survey summary here).

The survey asked readers for their opinions regarding the impact and risk of several physician marketing channels. They were also asked how they saw the mix shifting in the next few years.

When evaluating impact, I asked respondents to think of reach, credibility, and content richness as important factors -- the greater these attributes, the greater will be the impact. Risk factors, on the other hand, include potential to cause customer dissatisfaction or push back, increased regulation, negative publicity, etc. If marketers should avoid the channel, then risk would be high.

The results of the survey can be plotted in graphical form:


Let's focus on traditional face-to-face promotion (rep) and eDetailing or epromotion.

While face-to-face promotion has a very high impact potential it is also risky and is becoming even more risky, according to survey respondents. [Risky because of increasing physician push back, denying reps access to physicians, and state laws attempting to limit access to physicians by sales reps.]

This is what the downward red arrow is showing. In fact, the tip of the arrow is where this channel may be at today!

eDetailing or ePromotion also has high impact. At the time this survey was run, eDetailing was thought to be as “risky” as face-to-face selling, but now it has the potential at least of being LESS risky and MORE impactful than traditional sales reps.

Additional Reading:

• Internet vs. Sales Reps: Which Do Docs Prefer?
• Rejiggering the Marketing Mix a la Merck

P.S. Forgive my use of the terms "salesman" and "salesmen." Obviously, I am trying to relate this to the play "Death of a Salesman." I am not implying that all pharma sales reps are men. Some reps are actually "cyborgs" with limited sexual attributes and some are machines that have no sex whatsoever!

Competitors Are "Best Source" of Complaints About Promotions Received by FDA

Competitors Are "Best Source" of Complaints About Promotions Received by FDA

Approximately 12 minutes into yesterday's 45-minute "Bad Ad Program Webinar," Catherine Gray, PharmD, Management Advisor at DDMAC, got down to business and started talking about the program that some critics have said is "ineffective, not cost-effective, and biased" (see poll here). At that point, Gray talked about "Limitations" of FDA's drug promotion surveillance. She focused on promotions to physicians.

Among FDA's TOP three "normal" surveillance activities was "complaints submitted by industry competitors." In fact, Gray said "we have found that industry competitors tend to be some of the best sources of information about potentially false and misleading advertising."

I am not surprised that competitors complain to the FDA. I've spoken to industry people who read this blog because they like to see me blast their competitors. For example, when I speculated that Phil Mickelson was on the AMGEN/PFIZER payroll when he said glowing things about ENBREL in the press (see "Is Phil Mickelson Shilling for Enbrel?"), a competitor told me that his company wondered the same thing.

Of course, even competitors cannot hear what's said "behind closed doors" in physician offices, industry-sponsored dinner and lunch programs, and on the floor at major medical meetings. The FDA initiated its BadAd program to "fill these gaps" in its surveillance activities. Thus, the BadAd program is designed to solicit complaints from physicians about verbal statements made by company sales reps or company-paid speakers.

When asked "In cases where there is a complaint about an oral statement, what evidence standard do you use to go forward with an action," an FDA speaker responded: "We have a very high level of evidence that we require that often includes an affidavit ... and verification as well. So, we do have a very high ... standard of evidence that we require before taking enforcement action." No further details were given.

However, in response to another question, FDA said they also accept anonymous complaints, which obviously cannot be substantiated by an "affidavit." FDA does not reveal how many of the 239 BadAd complaints it received in 2010 were from "anonymous" sources, but given the fact that competitors are likely to be a major source of complaints, I image that a good deal of BadAd complaints are anonymous and likely to be worthless.

Of course, some companies are just too dumb not to leave a trail of verifiable evidence, such as Hill Dermaceuticals, which had a nice public website the FDA could plainly see violated its regulations (see FDA's Bad Ad Program is "Phoniest Thing Ever!" and screen shot below).

No wonder then that the Hill Dermaceuticals case was the ONLY BadAd complaint that resulted in a notice of violation letter. Does the FDA need a BadAd program for that? BTW, Jerry Roth, president of Hill Dermaceuticals, complained that DDMAC acted on a complaint filed by "a doctor for another [competing] company." Mr. Roth should THANK the FDA for giving his company some GREAT promotion!

Aside from violative verbal statements, the FDA's BadAd program is designed to capture complaints specifically about "Home-made promotional materials not submitted to FDA."

How rampant is the use of "home-made promotional materials" by pharma sales reps? It must be significant if the FDA specifically mentions it as a reason for the BadAd program, which don't forget, was created by "2 former sales representatives with 11 years combined selling experience." These former reps, said Gray, "are well aware what goes on behind closed doors." Perhaps these two former reps engaged in questionable promotion to physicians themselves? Gray added that they were "quite successful in selling their products."

My impression of the BadAd program is that it was created by former drug industry sales professionals and is designed to make it easier for sales reps and company-paid physicians to "rat out" their competitors, anonymously or not. It just doesn't present a good image of how a government agency should work. In fact, I am sure that under a new administration, the BadAd program will be the first item on the agenda for cutting. While it may be easy these days for a drug rep to begin a career in the FDA, I am not so sure a former drug rep FDA staffer will be able to get a job in the drug industry after being laid off due to budget cuts!

New PhRMA Survey of Physicians: Are Sales Reps as "Useful" as PhRMA Wants Us to Believe?

New PhRMA Survey of Physicians: Are Sales Reps as "Useful" as PhRMA Wants Us to Believe?

"New Survey Emphasizes Value of Biopharmaceutical Company Engagement With Healthcare Providers" is the main point PhRMA (Pharmaceutical Research and Manufacturing Association - the industry trade association) emphasized in its press release (here) regarding a survey of physicians it sponsored. PhRMA also pointed out that nearly 9 out of 10 physicians considered company-sponsored peer education programs to be "up-to-date, useful and reliable."

That's good news for pharmaceutical marketers who spent $24 billion between October 2009 and September 2010 on physician-targeted promotional spending, not including nearly $1 billion on continuing medical education (more data on promotional spending will appear in a Pharma Marketing News article to be published later today). It's good news because the survey justifies devoting the bulk of that promotional spend to support physician detailing by sales reps.

Of course, it's always educational to go beyond the PR and the trade publication stories that merely rephrase the PR (eg, this story) to learn something new, even some things the drug industry may not want you to learn.

For instance, look at this survey result that PhRMA doesn't mention:

What I notice is that only 22% of physicians surveyed said that patient access to the care they need is "working best." There is some survey results interpretation issues here, but it seems that access to care may be a problem in the US according to physicians. And without access to care, everything else -- including the value of medicines, the quality of care in general, and the value of pharmaceutical sales reps -- means nothing. Of course, "access to care" is probably a physician buzz-phrase related to the shortcomings of "managed care" and even "Obamacare."

The very first sentence in PhRMA's press release emphasizes that "Nearly eight out of 10 physicians view pharmaceutical research companies and their sales representatives as useful sources of information on prescription medicines." What PhRMA does NOT say, however, is more telling. Take a look at this survey result:

What I notice is 38% of physicians find Web-based sources of medication information "very useful" versus 26% who find sales reps very useful for that information. Hmmm... either sales reps are not doing their job as well as the Web or maybe they are doing their jobs TOO well -- ie, providing company-sanctioned and biased information rather than information physicians think is useful. Or you could look it another way -- maybe docs are finding a lot more useful "off-label" information on the Web (and CME, which ranks #1?) -- information they technically cannot get from sales reps.

As with any survey, it is difficult to interpret the results of this survey, which allows for all sorts of spins. You can find the entire survey results attached to this Pharma Marketing Forums post.

GSK's U.S. Sales Reps "Europeanized": No Longer Rewarded for Ability to Push Prescriptions

GSK's U.S. Sales Reps "Europeanized": No Longer Rewarded for Ability to Push Prescriptions

According to the Financial Times, "GlaxoSmithKline will this month scrap payments to its US-based commercial staff based on individual sales targets, as it attempts to draw a line under past aggressive marketing practices that have incurred substantial fines" (see here).

GSK’s sales "reps" will no longer receive commissions "based on their ability to push prescriptions. They will instead be paid based on their scientific knowledge, feedback from customers and the performance of their business unit."

An anonymous poster to CafePharma described what the "new" sales model will look like:

You will be judged on 3 categories. Product Knowledge, Customer Value, and Business Acumen. Each one of these will be split into 2 parts. Preparation and implementation. Basically, 6 categories to be subjectively assigned expertise levels by your manager. Hope you have a good relationship... This is how you will get your "cut" of your region's take of bonus dollars.

Oh yeah... you are also no longer referred to as pharmaceutical sales reps... from now on you are called "Customer Facing Staff". No joke...

GSK recently revealed a $3.5bn charge to settle product liability lawsuits and regulatory fines linked to past sales practices (see story here), which may have prompted this change as well as changes in funding physician continuing medical education (CME): GSK will now restrict funding CME courses to a small number of non-profit institutions.

This seems to be a radical shift in the evolution of the pharma sales model that has been followed by companies like Kantar Health. I've written on this subject in several Pharma Marketing News articles over the past year or so. See this recent article: "The Changing Pharma Commercial Model in 2010 and Beyond" (use discount code '95MDK' to download it free).

I also note that in order for a pharma company to reward its sales reps based on prescription volume of physicians they have detailed (the "old" model), the company has to have access to the prescription writing data of individual physicians. It's not a coincidence perhaps that the Supreme Court will soon determine if states have the right to prevent access to that data by pharma companies (see "Supreme Court to Decide Fate of State Laws that Prohibit Use of Rx Records by Pharma"). GSK may be sensing that the decision will go against them and they can take the "high" voluntary road now instead of taking the "low" legally-forced road tomorrow.

Although this model may be new in the U.S., it's not so new in Europe where pharma companies never had access to individual physician prescribing behavior. In Europe -- as I understand it -- pharma companies can only see how prescriptions change among a block of physicians in a certain geographical area more or less equivalent to a zip code in the U.S. Thus, basing sales rep commissions upon "district" performance in the U.S. is similar to how it's done in the EU. From the anonymous post made to CafePharma cited above, it looks like U.S. reps are not going to be happy to be "Europeanized."

Movie "Love and Other Drugs" is More an Ad for Viagra Than an Expose of Sales Tactics

Movie "Love and Other Drugs" is More an Ad for Viagra Than an Expose of Sales Tactics

If you were expecting the movie "Love and Other Drugs" to be a hard-hitting expose of pharmaceutical sales tactics as was the book it's loosely based on -- ie, "Hard Sell," by Jamie Reidy (see review here; use code 'JAMIE' to get it FREE! -- then you are in for a surprise. The trailer (see below) exposes that this is just another "love story" that happens to feature pharmaceutical sales reps and their shenanigans.

"[Anne] Hathaway portrays Maggie, an alluring free spirit who won’t let anyone - or anything - tie her down. But she meets her match in Jamie ([Jake] Gyllenhaal), whose relentless and nearly infallible charm serve him well with the ladies and in the cutthroat world of pharmaceutical sales. Maggie and Jamie’s evolving relationship takes them both by surprise, as they find themselves under the influence of the ultimate drug: love."

The "ultimate drug" may be "love," but the movie seems to focus on how great a drug Viagra is!