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Who is Killing the Pharmaceutical Sales Position?

July 29th, 2010 Leave a comment Go to comments

The role of the pharmaceutical sales representative (Chapter 9 in Pharmaplasia™) has been waning for some time.  The internet is full of discussions about the sales representative (“detail person”, “detail man”, “detailing”) position being dead, dying, or even obsolete. Some discussions are defensive while others are unrealistically optimistic about a return to the traditional role.  At the same time,  Pharmaceutical companies are trying to balance the challenges of physician access with the fact that pharmaceutical sales has been one of the most impactful marketing tools available.  More importantly, the pharmaceutical sales representative was probably the best way to inform, and yes, “educate” physicians about prescription drugs, especially new products.

There is a lot of blame to go around for why pharmaceutical sales is struggling for survival.  There is a rarely talked about and hidden reason but first here are a few of the more obvious and frequently complained about reasons for why pharmaceutical sales representatives find themselves either unemployed or wondering if they will still have a job at the end of the year:

Some have also postulated that the advent of electronic communications and internet availability of medical and drug information have made sales representative obsolete.  I believe electronic communications should not be seen as a threat or replacement for pharmaceutical sales but rather could be a future necessity for handling the large volume of data available and to explain the complexities of new treatment options.

Some have suggested sales and sales management brought it upon themselves with questionable sales tactics and the hiring of less than professionally or scientifically qualified sales personnel.  While these may have ultimately contributed to the continuing demise of this important position, I believe you have to dig deeper to uncover the genesis of this unfortunate evolution.

Some have blamed management for just about everything and in this case, you don’t have to be very specific, from C-level to front line managers.  Unreasonable expectations and “stretch” sales forecasts drove a lot of sales organizations and individuals to do “whatever it took” to meet those sales goals.  Sales management complied with these expectations and was bound and determined to make their incentive bonuses and ensure their place at the annual sales incentive trip.  Again, “whatever it takes” to make or exceed your numbers.

Marketing often built those sales forecasts out of hubris and pushed the sales organization to deliver while also provided the marketing message and resources to do “whatever it took” to  deliver the sales.  Think of the virtually uncontrolled, unlimited (by standards for most other industries) funding for tchotches, lunch and learns, speaker programs, and of course, samples and literature (marketing materials).  Of course reps were encouraged to fully deploy and leverage all their resources.

Some people like to blame the regulatory environment (constraints on what reps can say and do) while others point to a less tolerant healthcare market (increasingly difficult physician access and institutional limitations on promotion).  These, however, while real, were more a response to increasingly aggressive and sometimes questionable (unethical or illegal?) activities rather than being inherent in the market.

No doubt, pressure on sales representatives to make their numbers was and is intense and often requires incredible selling skills and creativity to compensate for the realities of marginal product profiles given the market expectations and sometimes even harmful side effects of the products they were selling.

This leads us to one of the less obvious sources for why I believe the sales representative position has become threatened with extinction.  And that is,  the lack of credible clinical data and appropriate regulatory labeling to support the commercial claims needed to deliver the forecast sales numbers.  Sometimes the clinical data and marketing messages provided to the sales organizations have even been inaccurate, intentionally misleading, or even concocted.

Solid credible clinical data and regulatory approved labeling to support commercial claims mitigates the need for overly aggressive and questionable sales activities and reduces the regulatory constraints that bar sales representatives from having meaningful clinical discussions with physicians.  It is hard to imagine the level of sales that might have been achieved had the talented, skilled sales representatives been armed with better clinical data and stronger, more definitive regulatory label claims.

Research teams pushed (and senior management was pushing even harder) for approval rather than building comprehensive product profiles to support the commercial expectations.  The get-it-to-market drive for approval to attain indication- based label claims without differentiation or consideration for what sales representatives will be able to say or use in promotion unfairly puts sales representatives in an awkward, boring, professionally compromised, and near impossible selling situation.

So before you blame or criticize sales and sales management for jeopardizing the pharmaceutical sales position, look at the clinical data they had to work with.  You might find that they did a better job than might have been expected and you might find the reasons they felt compelled to go to such extremes in some cases to make their sales numbers.

mike@pharmareform.com

Categories: Management, marketing, Pharma company reforms, R & D, sales Tags: , , , , , ,
  • Dana Webster

    Mike-

    Interesting article. I’m glad you assessed all the components and possible players.

    Many of us are still scratching our heads trying to understand the reasons it all happened at once, what methodology has been used regarding retention and removal of representatives.

    I’m not sure any of us have the answer, but we need to understand the solution very quickly and find out how to pave the way for the future. Unfortunately, I don’t know if everyone’s received the memo that we have to abandon 1990′s sales tactics and provide the HCP the representative they want to interact with vs. the one we want them to.

  • http://www.pharmareform.com Mike Wokasch

    Dana,
    Thank you for your thoughtful comments. Like your Linkedin commentary I am sure readers appreciate the empathy in trying to sort this situation out. I have spent a year and a half reflecting on the evolution of the industry and feel I have some of the answers in my new book, Pharmaplasia(TM). Many are not as obvious as people might think, such as the importance of R & D in the role of the pharmaceutical sales representative. Thanks again for your contribution here and on other sites. mike@pharmareform.com

  • Carl Johnson

    Mike,

    I was one of those old dinosaurs that actually had to know relevant clinical data for my own portfolio, as well as my competitors, and be able to place that knowledge within the prescribers operational reality. While my drug might be a good choice for X, if the population of the practice was such that my product wasn’t the most beneficial based on then current clinical data, we accepted that, and weren’t inappropriately motivated or managed to try to jam the round peg into the square hole.

    As such, since we did not pretend to have the “be all, end all” for every patient, we developed credibility with our prescribers. As for clinicals, we were told that even highlighting a copy of a NEJM, JAMA or other clinical piece was a firing offense. No way in the world would we have considered going into a office store with a homemade piece. We tracked samples appropriately.
    Then, the MAD theory came into our being. Granted that the pipelines of R&D were churning out great products and pharma companies added sales forces to sell the new stuff, it did begin to impact the time we had for speaking with (not to or at) prescribers. Add in the “If it can be measured, it can be managed” impact, where data was overanalyzed, and in quite a few cases used to “manage out” an effective rep who wasn’t in the manager’s faves. All of a sudden we reps weren’t sure where to turn or whom to trust. Adding the fact that I often saw more reps in an office waiting room than patients, I knew we were doomed.

    I was from the old school..one rep per waiting room, all other reps waited outside- regardless of whether it was literally outside, or just in the hallway. There was a code that we inherently followed. We didn’t slam each other’s products, reps, or companies. We sold on merit, developed relationships, hoping to become an adjunct to the practice, not an interruption.

    There are those of us out here who still share that work ethic of our prescribers, not the T0th 10-2 reps. We’re calling on retail pharmacies, EDs, ICUs, performing inservices with pharmacists, nursing homes, ACLFs, on top of making solid sales presentations 8-10 times a day to relevnsat customers, making business relevant relationships, etc. But we are few, and feeling hunted towards extinction, as we are seen as an expense to, not an investment by the company, far exceeding that of an FNG, who costs less to hire, yet who also hasn’t the access and credibility we have.

    I miss the days of having a manger who told me here’s the support available to do what you’ve got to accomplish in your job. Do it, or I’ll find someone who can. And who then got the heck out of the way. I miss having managers who didn’t pretend that the once a month visit with a rep to an office with whom the rep had solid cred, wasn’t seen as the DBMs chance to show off, usually angering the staff and friends we had.

    Unfortunately, the era of instant communication also brought leadership down to the local level, and not in a good way. All of a sudden, RMs developed a “squad leader” mentality and began to dictate how to accomplish the mission, not give the mission parameters, and let the DMs plan and refine, and the reps execute.

    Yes, those of us who have impact are here, unfortunately painted with the broad brush of the reputations earned or not, of the Critical Mass of Kens and Barbies and subsequent implosion of credibility from hiring those who lacked the ability to grasp and be able to discuss complex science and biology. Yet they asked prescribers erudite and insightful questions such as “Do you treat Hypertension?”, which was once answered by a physician to a Barbie rep in my hearing as ” No, I watch them explode and die! Now get the **** out of my office and don’t come back.” Sadly, in my view, that response didn’t happen quickly enough or often enough for management to learn the lesson, that when you’re selling to the highest educated class of consumer in the world. Doesn’t it behoove you to hire people who can mirror that?

    Eventually, we’ll find the balance again and it will remain so, until we forget the lessons learned.

    In the end, it’s all about helping a physician or extender help a patient who needs it. All else is secondary.

  • http://www.pharmareform.com Mike Wokasch

    Carl,
    Thank you for your thoughtful feedback. There is a reason behind what you and others in the industry have experienced and observed. It took me a long time to put my finger on it but the unintended consequences that I refer to in the subtitle of my book Pharmaplasia (TM) stem from rapid organizational growth that led to a dilution of expertise, including management expertise. While those in the field and at pharmaceutical companies are feeling the ramifications today and it may seem like they just happened recently, the destructive forces have been in the works for more than two decades. I’d go into greater detail but it took me 180 pages to convey what happened , why it happened, and what needs to be done about it. Again, thank you for your contribution. mike@pharmareform.com

  • http://www.linkedin.com/myprofile?trk=hb_tab_pro Howard

    ‘Pharmaplasia’ – from the title sounds as if Mike has hit the nail on the head …

  • http://www.innovara.com Aaron

    Thanks for the insight Mike.

    Just wanted to throw my 2 cents in. Market and regulatory changes in the 1990s set the stage with opportunity to market and sell sell sell. The more reps that were sent out, the more money companies made, it was a simple recipe. With shrinking pipelines and fast approaching patent cliffs, things are changing. As the number of US reps gets back to just under 100,000, as they were before, that will help solve the over supply. It’s no one’s fault, it’s just opportunistic growth and the balancing of supply and demand.

    Sales reps who can deliver real value will, as always, make a difference and find career opportunities. Just need to keep customer service and medical selling skills sharp. aaron@innovara.com

  • http://www.pharmareform.com Mike Wokasch

    Aaron,
    Thank you. I share your perspective about delivering real value and keeping customer service and selling skills sharp. Having products with meaningful clinical benefits supported by valid clinical data and definitive label claims can also reduce market barriers, increase market acceptance, and more importantly, bolster the credibility and relevance of the sales rep position. mike@pharmareform.com

  • http://www.spbt.org Bob Rodman

    Interesting comments from everyone. I started in the industry in 1960 as a Medical Service Representative (Yes, even then detailman and later detailperson was a negative term) working for a marketing division of one the largest Pharmaceutical Companies in the US. Five years later moved to a new upstart company and retired in 1994 when it was bought out by one of the Swiss giants.

    The one area that had a significant change in measuring a MSR’s effectiveness was the sales data that became available to each company. The hue and cry then became, “What is your prescription penetration of the market for that product?”

    Early, when this data was originally offered to the companies, a very good DM that I knew from another company was being threatened with termination if he didn’t fire a particular representative that did not show good market penetration figures. He knew the figures to be badly skewed and inaccurate. The company that supplied the data specifically said that there were error rates and only use the data as supplemental information. He wouldn’t fire the person and the DM lost the position.

    The data did get better as more wholesalers and chains participated in the data mining effort. Bonus and salary were closely tied to the results. No wonder relationship selling based on honesty and service was going to take a hit. Getting the prescription was the goal…at any costs.

    Then the business model became: If you can only mention three products in front of the doctor, and you have more then three, then split the sales force. We can even split it based on the indications. One rep. talks about one indication and another talks about a second. Is it any wonder Physicians were barring reps at the door? Oh, and maybe we will license another company to present the same product.

    The industry practices helped kill the goose that laid the golden egg. Is the future what GSK has just declared? Stop looking at prescriptions filled and start bringing service and information to the physician. Is it too late for this change? Can the industry become creditable to the patient and doctor?

  • Warren Czerniak

    Dear Mike,

    There are numerous factors that are driving the demise of the sales representative in the US pharmaceutical industry. Some of the factors are outside the control of sales management and the representatives. For example, the fact that doctors need to see more patients to make the same income level due to reductions in reimbursement is a reality. The result is less time to spend with a rep. Not much you can do in this case.

    However, the majority of the problems are self-imposed. Sales leadership who viewed this as an arms race with competitors were a major driver. The ridiculous premise that you need 3 or 4 reps to sell the same portfolio with different priorities to the same doctor is ludicrous. This is particularly true when the products are mature. These same sales leaders were more focused on call activity than results. Considering how intelligent these people were, many were extremely naive in thinking that the call numbers would be completely legitimate. Ask for 8 calls per day and you will get 8 calls per day reported. Garbage in, garbage out.

    Next, the decision to dumb down reps in many companies was a detrimental one. In most organizations sales leadership along with marketing decided to limit training to the core message. Essentially they transformed the rep into a glorified brand message carrier, not a source of high quality information for clinicians. MSLs were created to speak intelligently about clinical studies as well as off-label matters.

    On top of that, there are very few ways to increase profit in this business. You can increase revenue or decrease cost. Two levers. With increased pricing pressures coming which should have been seen clearly by management, that left cost reduction as the way to grow the bottom line. R&D expenditures were not going to get slashed by huge percentages due to the need to keep the pipeline full. That left sales & marketing plus administration. Decreased sales productivity along with patent cliffs led to the decreased need for multiple layers of reps. Just take a look at the numbers over the last 4 or 5 years in companies like Schering-Plough before they were packaged up and sold. Sales flat, costs and jobs slashed, bottom line looked good. It’s like putting lipstick on a pig.

    So in a nutshell, there were a few things that could not be controlled. But for the most part, the best place for sales people and especially sales leadership to look is in the mirror. Doctors no longer have time to spend with the “Kens and Barbies” who delivered little or no value. TIME=MONEY! Samples can be mailed. Vouchers also work. Make reps productive again, have them deliver high value again and maybe you’ll increase access and productivity. However don’t be surprised when rules and regulations limit the number of times reps are allowed to see doctors per year. It has been happening in Europe for years and is already happening in the institutions in the US.

    The dinosaurs need to reinvent themselves quickly. Oddly enough you are now hearing the term “customer centric selling” in major pharma companies as if it were something new. Just a question: if your selling wasn’t always “customer centric”, what was it? Call activity centric? Think about that and you’ll know why dinosaurs become extinct.

  • http://www.pharmareform.com Mike Wokasch

    Warren and Bob,
    Thank you for the thoughtful and enlightening commentary. While you could understand and maybe see how one or even a couple of companies with misdirected leadership might blow it, don’t you find it interesting that an entire industry could get it so wrong? mike@pharmareform.com

  • Mike

    Hi Mike,

    The multi-layerd pharmaceutical rep model started with Pfizer but, the path of the pharmaceutical industry is following the auto industry. A few years ago while watching experts speak on the problems with the auto industries demise I realized that the pharmaceutical industry was going down the same path.

    Their position was that non-auto CEOs were brought in to run the companies and that the bottom line was profit. They started building SUVs for profit and not reinvesting in R & D.

    The pharmaceutical industry is all about profit. That’s why you see large sizes of products. Higher profit on the larger size products and supposedly a savings for the patient. You will also see that companies are repackaging branded products that are going generic but, no
    big blockbusters. They are not investing in R & D but, buying up generic companies and
    moving their business into China and other countries.

    Take Care,

    Mike

  • pharmavet

    Mike, I agree with your article. Sending a rep into a doctor’s office with 10 year old clinical data is like sending a soldier into war with a BB gun. I started in Big Pharma clinical R&D in 1983.. We didn’t get much input from Marketing in working our development plans because Marketing knew that at the time of NDA approval we could get them 3-4 solid indications that they could differentiate with. This generally required 4-5 extra years in Phase II/III, but everone understood that the ROI was worth it. The model changed somewhere in the 1990′s when Marketing realized that they could save time and money by getting a single indication approved while selling the additional indications off label. This was aided and abbetted by the FDA’s lax enforcement, and no pressure from the legal community. Because of the resulting lack of clinical data in the rep’s hands, Marketing pushed Biostatistics to conduct evermore post hoc analyses (data dredging) to support marketing claims. Also, Marketing cut back on money for patient enrollment, the result being that we were only able to power studies at 80% (basically an estimate of probability of success) rather than the standard 90%. Not surprisingly, the result was a higher failure rate in Phase III trials. Also with outsourcing of trials to CRO’s the sponsor lost a key element of control, since in most cases the CRO does not have a vested interest in the success of the product.

    The influence of Marketing on the design, execution and outcome of clinical trials has been pervasive and pernicious over the past two decades, IMHO.

  • http://www.pharmareform.com Mike Wokasch

    pharmavet,
    Thanks for joining the discussion and providing a research perspective. mike@pharmareform.com

  • http://www.pharmareform.com Mike Wokasch

    Mike,
    You’re right and how long do we think this business model last? Until the cash runs out or the acquisition opportunities run dry? mike@pharmareform.com

  • imout

    shoot, ill buy the book! im out of the industry and ive put on my linked in profile that pharma opportunities need not contact me. Im out but I leave behind a few friends holding on but they are nervous, paranoid, basket cases with physical disorders of anxient ibs and depression that is growing by the day. they’re medicated and drinking and functioning some how. this is what is left behind. i made it out with my peace of mind. priceless. almost 2decades in..and the rudeness and unprofessionalism that is left in the industry is dispicable.
    BA biology
    MS phsiology
    plenty of certifications and experience BEFORE pharma., so im fine. But educated people that think need not apply.

  • Mary

    I have been in the industry almost 9 years. Previously I was an RN with insurance and sales experience. I truly believe that the industry has killed itself by the nuclear proliferation of drug reps hired for their sex appeal rather than their medical knowledge. Much as the tale “The Emperor Has No Clothes”, most are very aware of the problems–too many reps, very few physicians having time to engage, an average 10-20 second call—but are unwilling to state the facts and take the necessary actions. We need to get rid of at least one half of the reps and all of the marketing. If all of us were required to ONLY use the PI’s and peer-reviewed journal articles, marketing costs would be virtually eliminated and maybe, just maybe, over time the rep would again be viewed as an asset to impart valued education and knowledge instead of a hinderance. In my perfect world, a science based consultant (not a drug rep) would talk to drs only through appts, leaving the sampling to UPS. The territories would be large and drs would only be seen once a month or less. These consultants would be highly trained in pharmacology and salaried with no bonuses tied to sales and allowed to speak to any competitor’s PI or clinical trial, but that’s it—-no fancy marketing “tools”. The only way the industry will ever recover it’s tarnished reputation is to elevate the message to one of science and value to the customer. This type of consultant would represent my ideal position as one who honestly brings value to the patient and the HCP and would make me feel good about my job again, instead of being demoralized and disgusted by the behavior of both industry reps, management, and yes, even physicians and their staff. Thanks for letting me vent.

  • http://www.pharmareform.com Mike Wokasch

    Mary,
    Thank you for “venting.” We share a common vision for what should be that I believe could be a reality. Thank you. Mike

  • http://www.pharmareform.com Mike Wokasch

    imout,
    One of the reasons I decided to write a blog and a book about the need for change in the pharmaceutical industry was because the industry was such a great place to work for me and I still feel it is our best hope for finding the treatments and cures for the many diseases that continue to cause disability, pain, and suffering. No other institutions (not government, not universities, not medical schools) have the necessary infrastructure, capabilities, or expertise to manage drugs and other treatment options through the clinical development and regulatory gauntlet to make sure that products coming to market are safe and effective.

    The industry needs to make major changes strategically, operationally, and philosophically to continue to be this source of treatment options and to reestablish itself as a credible trusted source of drug information. You have hit on one of the biggest hidden threats to the industry that few talk about. If the industry doesn’t change, it will become increasingly difficult to retain and hire the necessary scientific expertise, operational competence, and experienced management talent. Discovering innovative drugs and managing a large complex business like a pharmaceutical company in an increasingly complex market requires a commensurate level of expertise, competence, and organizational integrity.

    I hold out hope that those who remain in the industry with aspirations for leadership and continued careers in the industry will be receptive to some guidance and sideline coaching, and begin to assert themselves to make the changes. Only those in the industry can make the changes. You and I who are now out can only observe, advise and try to inspire. mike@pharmareform.com

  • Guy

    Hi Mike – Great site. I’m a 12 year Pharma sales rep that is worried about the future of my job but I have to say in my opinion most of the layoffs that are currently happening with Pharma sales reps is just the market adusting to blockbuster drugs going generic and no new drugs in the pipline. Most sales reps have know for years that the “pod” selling system was a farce and would not last. About 7 years ago I moved from a “pod” system to a specality job in which I cover a big area with no counterparts. I did this to try and avoid what is currently happening at most big Pharmaceutical companies. So far I’m safe and there is no idication of layoffs at my firm but in this economy who knows. If you look at the majority of layoffs they are with the big Pharmaceutical companies that deployed huge pod sales forces, ie Pfizer, Sanofi, GSK, and Merck, smaller more specialized companies that employ a reasonable amount of reps have not cut back on sales people as drasticly. Sure factors like doctor access, regulatory issues, and cost cutting have played a roll in all of these layoffs but to me what we are currently seeing with the Pharmaceutical Sales position is more of a buble bursting like with the housing market. Just like a 2 bed-room condo in the suburbs was not worth 350K a Drug company did not need 6 sales reps selling the same two products to the same 100 doctors.

  • http://www.pharmareform.com Mike Wokasch

    Guy,
    Thank you. One of the other less appreciated impacts from hiring a lot of sales representatives was the dilution of management talent within companies and across the industry resulting in a lack of experience and expertise at the DM and RM levels. Thanks for contributing to the discussion. mike@pharmareform.com