What does your CEO think about Pharmaceutical Sales Representatives?

In our series about pharmaceutical representatives we have covered factors impacting their job function, market expectations, what needs to be done to launch and market a pharmaceutical product, and what it means to be a professional pharmaceutical representative.  Today we are going to discuss the organizational implications and what has to happen throughout the corporation to make this transformation for professional representatives a successful reality.

If we work back from how the market is evolving and what companies need to do to address the changing expectations of a broader and at times, more sophisticated customer (not just physicians), we can see that the implications for change at a pharmaceutical company are organizational and not just for “sales”.  This is truly transformational for executives and senior management, R & D, and commercial operations.  Companies will fail miserably if they are merely looking at how to change their sales organization (e.g., restructure, new compensation, and new titles).

Of all the issues we could discuss, getting all the functional areas aligned for this change is the one that precludes most pharmaceutical sales organizations from making the fundamental changes they know they should make in light of the evolving new healthcare market. What we are talking about is formulating an organizational strategy that creates a comprehensive culture and support system that embraces the role of the professional representative so they and the company products can succeed in the evolving new healthcare market.

The first change that needs to take place is the organizational mindset from the traditional “sales” position to that of the professional representative.  Your CEO and executive team play a huge role in this.  They must see professional representatives in the light we have described and not as “expendable field people” deployed tactically to drive sales.  This mindset change requires that executives and senior management understand the changing healthcare market at the customer level (not just physicians).  They must appreciate how the role of professional representative will be different from that of the sales job they have known for decades and probably did themselves.  If executives and senior management don’t understand the difference, it will make no sense to implement any of the other organizational changes needed.   In fact, the other changes are probably not going to get their support because they will seem like a waste of time and money to the “sales rep” oriented executive team.

If it is not somebody on the executive team proposing the changes it is incumbent on the person or team that is to make sure the executive team fully comprehends and supports the strategy, organizational implications, and the rationale for the changes being proposed.  As bureaucratic as large companies can be, but more importantly because of the multi-functional implications,  this is not just a discussion over coffee.  It will require well thought out planning with a series of discussions to work out details of the functional implications and to garner functional support.

Each company and executive team will be different.  Company strategy, financial position, product pipelines, and even the expertise and competency within the organization will factor into how receptive an executive team might be to the magnitude of change being proposed.  Whether or not you can get the executive team to buy in and how to do that may be interesting fodder for another series but in our next post, let’s just assume the executive team is on board. They not only understand and are ready for change but  embrace it, expects it, and they are ready to support it.  I know this is a big assumption but we can’t get to where we need to be without it so let’s play this out in the next few posts.  What else has to change?  Stay tuned. mike@pharmareform.com

9 thoughts on “What does your CEO think about Pharmaceutical Sales Representatives?”

  1. Name me a CEO that has been out in the field and sold in the last 10 years. NOT ONE! They forget without the sales rep…no sales!!! Lets give it a spin, the next drug that is approved by the FDA lets put no sales reps on the product. How does that please the investors? CEOs are a dime a dozen. Sales reps drive demand! Period! The problem is too many people have been promoted due to kissing a$$. They have no ideal how to sell or where to begin! There are yes sir men and this is why we have so many issues (off label promotion, marketing issues, selling on price/margins, executives having issues with stock trades). Its easy hire good sales people, pay them well, get rid of middle management (who know nothing). I will solve the issue right now. Managers over 15 reps. they get paid less then the sales reps in base and more in bonus. They ride with there reps 2 days once a quarter. The structure is broken! The CEOs dont know how to fix it because they have never been out there.

  2. coulter,
    I don’t believe this is an organizational structure issue. It has everything to do with a change in mindset about how to market and sell pharmaceuticals in the evolving new healthcare market and the industry seems to be stuck in a rut.

    You hit on the fundamental mindset changes that need to take place for pharmaceutical companies to be successful in commercializing their products in the evolving new healthcare market. CEO’s and the executive team must understand (they don’t necessarily have to know how to fix it or change it) the market and appreciate the need for change in how pharmaceuticals will be sold in this evolving new market. Commercial management (marketing and sales) must recognize and accept that traditional tactics (think advertising and promotion) that have worked for decades will no longer work. Commercial management has the position power and responsibility within most organizations to put forth the plan for change and how to make the changes. And last, sales people have to realize that the market is changing (e.g., less physician driven prescribing influence, expectations for differentiation, and sophisticated product data reviews) and is becoming less receptive to traditional selling skills and tactics. Thinking that you can continue to sell like you have sold for the last 10 to 15 years will lead to a progressive decline in effectiveness and increasing frustration for sales people.

    As I look across the industry, there are few executives, commercial managers, or sales people who are ready or willing to make these mindset changes (remember the professional representative discussion?) that are required to transform pharmaceutical sales to a more productive and market valued role. mike@pharmareform.com

  3. Here is another view of the problem of which you are speaking. The “change in mindset about how to sell and market pharmaceuticals” is where the problem starts. Pharma companies, at least the past 10 years, have stopped hiring CEO’s and many executive mgmt. teams that came up through the ranks of sales in the pharmaceutical business. More importantly, many of the CEO’s are lawyers (think Pfizer), and long gone are the days where the CEO was an R&D or medical educated individual who actually knew the business and respected the role of the pharma sales rep. The current crop of executives simply do not really know how to effectively market and sell pharmaceuticals, so how can they grasp the need to change their mindset? These very executives have nearly destroyed the role of the pharma sales rep. (which started in the late 90’s) by putting every Tom, Dick, and Harry to sell the same product to physicians who then struck back at the industry by shutting down access. Coming from the days where a rep. could see a doctor by simply walking in (no appts., no lunches, no 3 reps. in the morning & 3 int he afternoon restrictions, and observing all the restrictions imposed to access, I can speak for all reps. in this industry that access will never go back to the old days where you could spend 10 minutes or longer talking about product to a physician. I’m sorry to be the cynical one, but reality is necessary. No one currently in this business believes that the executive mgmt. team or the CEO will be on the path to change their mindset. The only way to resolve the pharmaceutical conflicts is to REPLACE these non-medical CEO’s and go back to the days when pharma companies were run by people with a medical related backgroud.

  4. It is a dog chasing its own tail. First I believe it is true that the arms race in pharma sales precipitated our current malaise in a short sighted effort by executives to maximize revenue. Second I need to step back and say that despite such poor vision, executives are still the best and brightest of any organization that has success over time. Having said that I see the problem as regulatory; As I agree with the future being most rosy when commercial management is quick to embrace the new mindset that is the “professional representative”. But alas their hands are tied. As much as they want to upskill their sales team, hire science grads and tie incentive structure to more qualitative, value added metrics, the regulators will continue to minimize this pipe dream by a gradual tightening of code of conduct. No more literature discussions even if the data is represented in the PI. No pathophysiology discussions concurrent with a product mention. The list goes on and will only get longer. True professional representatives yearn for the days when ethical conversations could be had with physicians counting on balanced information to help treat their sick patients. Executives dug their grave with regulators and now are stuck in their own wrinkle of time.

  5. I wonder if company leadership really does understand what changes are needed let alone know how & when to disseminate them to their own. I think the rep, and most specifically, the senior reps who stays current on what’s going on with reform and the market place, stayed engaged with their docs, and leverages their relationships not only with their high writers, but also administrators, education care coordinators, and pharmacists are going to be the ones not only left standing, but also the ones out on top. I suspect their management will be clueless, though, as to why they are successful.

  6. Pete,
    As you know, regulators have not changed the rules they have merely increased enforcement after decades of industry abuses which are well documented in litigation, congressional hearings, and my book, Pharmaplasia (TM). The recent DDMAC compliance notices suggest that label claims, misleading advertising, and fair balance are the areas the FDA seems focused on. While some might argue it depends on interpretation, I believe companies are continuing to push the regulatory envelope because the financial upsides are greater than the FDA consequences.

    I also believe that professional representative presentations, including the use of credible peer-reviewed literature that are consistent with label claims, that are not misleading, and that are delivered with fair balance are not the target of the agency. If marketing and sales can not deliver the sales forecast in that context, it is unrealistic and unfair to expect professional representatives to fill the label claim, literature, or data void. Despite the challenging regulatory environment, professional representatives will find ways to adapt and be productive within these constraints. Unfortunately, working within these constraints may not produce the results management expects.

    Thank you for sharing your perspective. mike@pharmareform.com

  7. Rich,
    It took me over a year of research and several chapters in my book worth of explanation to describe why and how an industry full of smart people could end up with managemnt teams that appear to be so “clueless” and so out of touch with what is going on, especially at the customer (not just physicians) level. It has to do with the unintended consequences of growth and the dilution of expertise.

    I agree with your assessment that professional representatives will ultimately be the ones that come out on top. Thanks for the contribution. mike@pharmareform.com

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