Lilly "plans to axe a third of US sales reps"

There was more bad news for beleaguered pharma salesforces yesterday as Eli Lilly said it aims to cut rep numbers in the US by 30 per cent, according to the Wall Street Journal.

The layoffs – which are equivalent to around 1,000 people and come from a combination of internal employees and contract workers – will happen quickly with most due to be completed by July, said the paper, which cited a person "familiar with the matter".

Lilly is already under financial pressure following the loss of patent protection for former $5bn-a-year schizophrenia drug Zyprexa (olanzapine), and will feel additional pain when generic competition starts for antidepressant Cymbalta (duloxetine) in the US later this year and osteoporosis treatment Evista (raloxifene) in 2014.

Cymbalta and Evista have supported the business during the Zyprexa fall-off, but together brought in $6bn in sales last year – almost 27 per cent of the company's total turnover. In the US the situation is even more precarious, with the two products accounting for 43 per cent of overall sales.

Pharma companies are trying to anticipate the loss of exclusivity for blockbuster drugs by bringing new products through the pipeline. Some of Lilly's latest entrants – notably anticoagulant Effient (prasugrel) – have however not fulfilled initial sales expectations.

Meanwhile, there have been some pipeline disappointments for Lilly, such as the failure of arthritis candidate tabalumab and a significant delay to Alzheimer's hope solanezumab.

The WSJ cited a company spokesman as saying that the cuts would only take place in the US, and around 300 staff would be added in its diabetes operations.

Lilly's announcement comes at a time when questions are being raised about the traditional pharma sales model based on detailing activities to doctors, and there has been a continual decline in overall rep numbers in recent years. Access to physicians is getting tougher, while changes to healthcare systems mean that they are in any case no longer always the gatekeeper of prescribing decisions.

With results increasingly separated from manpower, companies are increasingly adapting their sales strategy to concentrate on education and account management, trying to influence key opinion leaders (KOLs) rather than individual doctors, which can be achieved with a smaller headcount.

Companies are also making increased use of alternative sales and marketing tools such as websites and smartphone apps, rather than relying on face-to-face contact with prescribers.