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Pharma salesforce cuts predicted

Survey suggests European firms will shift to targeted forms of drug marketing

European pharmaceutical companies are preparing to reduce salesforce numbers and concentrate on more sophisticated and targeted forms of drug marketing, according to the results of a new study by strategy consultants, Roland Berger.

The study, entitled The European pharmaceutical industry; Delivering Sales Excellence in Turbulent Times suggests that pharma will significantly alter its sales model to respond to market pressures such as diminishing pipelines, regulatory changes, pricing and increased generic competition.

ìThere is a general awareness within the industry that it needs to change its sales model,î Roland Berger partner and study author, Stephan Danner told PMLive. ìI don't know a single big pharma company that is not piloting new approaches.î

According to a sample survey of 236 pharma and related industry executives, nearly one third (31 per cent) said the number of pharmaceutical sales reps would decrease over the next two years, bringing to an end a previous ìarms raceî within the industry, which saw aggressive hiring of reps as firms sought to gain a competitive edge over their rivals.

The study, also highlighted how pharma's perception of key stakeholders is changing. Over one third (34 per cent) said that they regarded the payer as the most important stakeholder that they needed to address when taking a drug to market in the next two years.

Danner said that in the past, big pharma firms had focused on GPs as the key stakeholders to the detriment of payers.

ìIn countries such as Germany, governments have opened up a whole new channel of communication between payers and the pharmaceutical industry,î he said.

The study argues that as pressure on pharmaceutical companies' margins continues to grow, the industry will be forced to explore more cost-effective promotional channels such as direct mailing and e-detailing.

ìPharma firms simply cannot afford the `size sells' strategy anymore,î said Danner. ìIt has been the most expensive sales approach any industry has ever taken and companies have started looking at how to save money both top and bottom line.î

He added that regulatory changes had made it an imperative for firms to review their models: ìIn some European markets, the sales rep is not allowed to visit the hospital more than two or three times a year.î

The survey was conducted at the Eyeforpharma Salesforce Effectiveness Summit, which was held in Barcelona in March. Respondents came from companies operating in all European markets except Russia.

30th September 2008

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