Global pharma marketing spend dropped by 3 per cent in 2011

Pharma's spending on sales and marketing fell by 3.4 per cent last year as companies slashed costs to cope with an increasingly challenging market.

Worldwide, the industry invested just over $92bn in marketing in 2011, according to Cegedim Strategic Data (CSD), which said companies' spending on reps, meeting and events was all affected.

The Paris-based analyst firm said sales force spending fell particularly sharply and was down by nearly 5 per cent to $55.8bn, mainly due to cuts in the US and Japan.

But the negative global trend was reversed in countries like China, which saw another year of growth driven by pharmaceutical companies' continued expansion into emerging markets.

Christopher Wooden, vice president for CSD global promotion audits, said: "The increases we saw in Japan in 2010 reversed last year as that country along with the USA and major European markets consolidated marketing expenditure in the context of fewer product launches and the end of patent protection for major brands.

“Meanwhile, emerging markets powered ahead in 2011 with China leading the way followed by Brazil and India. These countries saw significantly increased investments across the entire marketing mix."

Within pharma sales, CSD said detailing now represents just over 60 per cent of global marketing investments.

They noted that use of meetings and events was also down worldwide by four per cent with use of this channel in Japan dropping by 11 per cent. In China however spend on meetings and events jumped by over 40 per cent.

Pharma sales job cuts

At a company level, despite the focus on emerging markets, there was general consolidation among the leading ten companies during the 12 months to December 2011 as firms struggled to contend with government healthcare spending cuts and wave of generic competition as many important products lost patent protection.

In the last 12 months AstraZeneca announced 1,150 US sales jobs in December and in October Amgen said it would cut 300 US sales jobs as part of a “targeted and strategic” move to streamline its operations.

The trend is set to continue this year, and already AstraZeneca has plans for a further 3,750 job losses within its global sales, general and administration operations and Novartis said it will shed 1,630 US sales jobs. They join Abbott, Merck KGaA and Takeda, which all also plan layoffs. Meanwhile, GlaxoSmithKline is set to increase its sales presence in China, where it plans to recruit new reps.

CSD said that among the top ten companies only two increased worldwide promotional expenditure in 2011.