Monday, July 14, 2008

Thinning Sales Forces

The stories about cuts in sales forces are commonplace. The Pharmalot blog reported another downsizing on Monday, July 14: this one from Boehringer Ingelheim cutting half of its neurology sales force (another 200 sales positions shed).

As if to add insult to the pain of the continuing force reductions, the big pharma firms have found yet another way to “thin” the ranks of drug sales forces.

In addition to cutting the ranks, they appear also to be out to downsize the remaining reps themselves. Those reps who do remain employed are being pushed away from the entertainment table.

As part of the revised Pharmaceutical Research and Manufacturers Association Code on Interactions with Healthcare Professionals released on July 10, sales reps will not be able to take medical staff out for meals.

That’s a smart policy from a public relations/policy perspective. There clearly has been an outcry from medical groups (the Association of American Medical Colleges, for example), politicians and the media against entertaining and meals.

PhRMA President Billy Tauzin spoke convincingly and candidly about the bad impression left by private meals in restaurants while introducing the new code recently. He said those types of meals do not send the right message about the serious educational objective of appropriate contact between drug companies and the medical professions.

But PhRMA did not note one of the fine distinctions made in the new code about the ban on free meals. It relates primarily to the beleaguered sales reps.

"The Pink Sheet" looked more closely at how the code describes the ban on free meals (see here). There is a clear exemption for modest meals (pizza and sandwiches) delivered to doctors’ offices or medical centers with an educational presentation. PhRMA defended that exemption noting that “even the counterdetailers” use food to find a slot for their anti-brand messages.

When you look more closely at the prohibitions against meals, it becomes clear the prohibition is really against reps taking docs out for food. Other company execs (beyond the sales forces) can continue to provide occasional, modest meals for doctors.

The new code and explanatory Q&A does not get into specifying who might be the new class of dining execs but that might seem to be a new function for the medical sales liaisons. Sales reps can attend dinners outside of medical settings in one situation: if the meal is part of a presentation by an adequately trained expert physician and the rep attends to help with the logistics of the meeting.

There is a deeper significance to the focus on the sales reps for the cutbacks on wining and dining. It is another example of the ongoing effort to drive expenses out of the detail force: a form of industry-wide standing down in the face-to-face sales effort. From that perspective, it is closely related to the cuts in the numbers of sales reps. Companies have always been reluctant to cut the sales forces and sales force expenditures unilaterally; they feel more comfortable if they believe that all their competitors are making similar moves.

The pharma firms were willing to walk away from entertainment by reps because it looked unseemly and it was expensive. One of the critics of industry marketing practices, Sen. Herb Kohl (D-WI), estimated that gifts, meals and continuing medical education expenditures could represent as much as $19 billion per year in industry spending.

That probably overstates the saving potential from the recent code changes but the point is well taken. Just getting back a chunk of that money would create an attractive pool of resources that the companies need to support profits from their aging product portfolios and to free up funds for more efforts at consumer marketing and/or reaching the medical professions through new media. There will be lots of other places that money can go.

The new PhRMA code does not go into place until the beginning of next year. That means there should be some very interesting and rough budget re-allocation debates within the pharma companies during the final months of this year.

Drug execs have talked for years about a time when they would not need the large armies of reps for face-to-face detailing. Some companies already have strategic plans for the next decade that do not include lines for detailing expenditures.

Banning the detail forces from the fancy restaurants is just another step towards a much different world for drug marketing – one that has moved away from the personal sales efforts that have dominated for nearly sixty years.

1 comment:

Anonymous said...

You Have Now Been Sampled
While the pharmaceutical industry’s image and reputation has and appears to continue to suffer, added damage has expressed itself with costly patent expirations, as PhRMA president may concur to a degree if asked, the image of this industry, has experienced noticeable trauma over the past two decades in particular. We will start with the issue of samples.
Quite remarkable, and apparently legal, is the ability of prescribers to request branded pharmaceuticals from the makers of certain medications if a prescriber obtains a request form. For possibly a number of reasons, this avenue is rare for obtaining samples..
So even though the value of requesting samples of medications by prescribers is, apparently, an authentic method of obtaining samples, it appears that most pharmaceutical companies prefer to have their own representatives dispense samples of their promoted medications. This allows for the release of inducements to certain prescribers, which they believe affects the image of their products and its preference for them related to the inducement they may have accepted from you, which does not seem to be the situation.
These sales forces of pharmaceutical companies have been examined more now than in the past due to their size, for one reason. The size of the sales forces of large pharmaceutical corporationstripled at one point, starting in the mid 1990s. Also, estimated total income for an individual pharmaceutical representative may exceed 200,000 a year. Overall, the amount spent on these reps exceeds 20 billion dollars annually.
Sadly, and with a high degree of confidence, most big pharma representatives are viewed and evaluated by their employers as it relates to their offering of prescriber inducements they may provide to targeted prescribers, as their ability as a sales representative is difficult to determine, since most with big pharma have several representatives visiting the same doctors with identical blockbuster promoted products. In fact, one could conclude that an individual representative in such a work environment is ultimately exonerated from any individual responsibility in regards to their vocation, which is one etiology of the premise that they are judged by their employers according to how much of their employer’s monetary surplus they dispensed in a certain period of time. This will be further addressed later. Yet the inducements are never described by what they actually are, which are bribes. Who receives these bribes is largely determined by the volume of scripts they write, as well as their loyalty to a particular pharmaceutical company’s products. This data of the prescribing habits analyzed by certain pharmaceutical companies is certainly available, and this will be further addressed below.
However, and empirically, the drug sampling of doctors may be considered an ultimate if not primary type of an inducement of certain representatives. Some pharmaceutical representatives are falsely led to believe that their territory’s performance is due in large part to their powerful ability to influence others. Although such pharmaceutical representatives want to believe such a false premise, it is samples of medications that determine the prescribing habits of health care providers. This is obvious now more than ever.
Many years ago, drug reps used their persuasive, yet ethical, abilities to influence the prescribing habits of doctors in an honest and credible manner, as they focused on the benefits for the doctor’s patients with particular drugs that the detailer may promote to such a doctor. However presently, most health care providers now simply preventing drug reps to speak with them. This is especially true when they are in clinic treating and assessing patients. More and more medical establishments are completely banning drug reps from their locations, and I speculate that this is occurring for many reasons, which may include the following:
The doctors lose money. Doctors are normally busy, so their time is valuable. As a drug rep, you are an incredible waste of their time. Yet they will accept your samples still. The credibility you possibly have thought you had and were perceived as such by doctors as a drug rep is no longer viewed to exist to any noticeable degree by the prescriber.
Based on information and belief, the prescriber’s perception of you as a drug rep is you only provide information that is presumed by them to be overall inaccurate and void of authentic objectivity related to your promoted products as a pharmaceutical representative. This view is due to the frequent statistical gymnastics the employers of drug reps engage in way too often in relation to the clinical benefits of their medication illustrated by what is likely biased data.
Doctors by their very nature seek answers objectively. And doctors do in fact find out about drugs through other methods besides the representative of the drug’s maker, such as the internet and experience with certain medications, because of their awareness of the lack of authenticity of certain medications combined by the absence of credibility of the representatives of such medications. This is further illustrated by reps being selected by pharmaceutical companies due to their perceived appearance and personalities judged by certain employers. Further trait desired is their candidate’s potential and complete obedience in relation to their directives to them, which is expressed by the displayed affinity for money from a potential candidate. Qualities related to anything of a scientific, medical, or clinical nature is of no concern to most pharmaceutical companies, quite apparently.
This is why pharmaceutical representatives have no interest or concern regarding public health, perhaps. This premise is further validated by their employers’ minimal concern regarding the medical knowledge of their sales representatives, as this is replaced with teaching their representatives on how to issue various inducements to select prescribers., yet are just shy of calling these inducements what they actually are, which are bribes. Examples may be creating a check from your company to a certain supporting doctor and handing this check to thank a doctor for supporting your company’s products for doing little, if anything, for your employer to justify this check. Knowing this, it seems to validate their apathy regarding the medical knowledge of their sales representatives, while emphasizing obedience of them instead, which does not allow them to examine what they are told to do by some pharmaceutical companies, which may be viewed as inappropriate inducements to select prescribers.
In relation to non-monetary inducements given to certain prescribers, they may be of a certain value and are possibly without any clear medical benefit, such as TVs or DVDs, perhaps. And the autonomy that exists with some pharmaceutical companies allows such activities of legal or ethical consequences to be applauded by them to certain representatives of theirs as examples of innovation or creation by representatives who implement these activities. This appears to eliminate the need to examine the consequences potentially of some activities and tactics encouraged by certain pharmaceutical companies.
Another issue is what is referred to as data mining, which is a determining variable as it relates to who a pharmaceutical maker may choose to support financially, as determined by this data available to them, which authenticates the prescribing habits of others. When a pharmaceutical company issues such a reward, that takes many forms, the pharmaceutical maker, which is often very large and lucrative, alters their relationship with certain prescribers into a pathological symbiotic relationship of one that is focused on the continued monetary gain presumed to be of one that is great benefit to the maker of such medications. By doing this, the maker has not even allowed in a conceptual sense to be of an entity of any medical benefit of others ho to reward via numerous financial incentives for supporting the medical products produced and marketed by the gift giver, as this product maker often manifests itself into a creator of a quid pro quo relationship through what could be considered a pathological form of symbiosis that becomes a destructive host upon its creation by such companies. The receivers of such corruption are determined by those pharmaceutical companies that analyze this prescribing data, which is available to them starting with the selling of various identifying numbers of certain prescribers that are made available through the selling of these identifiers for the monetary gain of the providers of this data, which starts with the American Medical Association. Further disturbing is the fact that this behavior is not prevented by our lawmakers. In addition to pharmaceutical companies determining the supporters of their medications, the data also allows these companies to select certain prescribers that are of high volume, both of particular disease states and overall frequency. Because this variable allows a pharmaceutical company to conclude who could potentially affect their business and therefore dispense their financial stimulus methods accordingly. This allows certain pharmaceutical companies to create reciprocal relationships in addition to the anticipated continued prescribing habits of known supporters of certain drugs provided by and promoted by their makers.
Conversely, if a prescriber is determined by a pharmaceutical company to be harmful or of minimal financial benefit to a pharmaceutical company in relation to its promoted products, such a prescriber is often determined by such a company to be ignored by such a company, which includes any items of benefit to the health of others become forbidden and without access to such prescribers, which could include samples to such a prescriber as well.
While such unethical activities may appear to be ridiculous and without reason to some, this does not mean they do not occur, as the apparently unethical behaviors of certain pharmaceutical companies seem to be unbelievable by others on occasion. Furthermore, such tactics may cause an outbreak of corruption by other similar organizations, perhaps.
For example, possibly as a response to some tactics of branded pharmaceutical companies, some managed care providers are giving financial incentive to prescribers if they choose a generic medication that is typically less expensive than the branded variety. While legal, this activity is overall unknown to most citizens. However, such activity makes them no different in their approach to health care than certain pharmaceutical companies, as both affect the sterility of the judgment of some doctors who accept these inducements.
It seems that external regulation is necessary to prevent the drug companies from allowing the autonomy of drug reps and their own often secretive tactics that are utilized by some of the companies in the pharmaceutical industry. To many, it is rather obvious that internal controls of companies that perform such wrongdoing, are void of self-regulation, and choose to be this way with deliberate intent. If regulation happens, then it may be possible to resurrect the ethical element necessary as a participant in the health care system. The importance of public health should be the apex of their existence as a company that participates in this system..
Overall, pharmaceutical representatives are good, intelligent people who perhaps do not realize the results of actions that many consider to be unethical. Yet they do as they are told in order to maintain their employment, yet may compromise their integrity at the same time- as at times these methods implemented by members of the pharmaceutical industry with progressive frequency may result in a toxic culture and environment of certain companies that create with force certain representatives who perform activities that may be against their desire as a person.
I believe most reps really WANT to do well for their employers, yet are prohibited from doing so now because of how their employers are now viewed in their medical community, in relation to any contributions they may appear to make, which is not in the best interests of the patients, overall. Ethics once associated with this industry have atrophied over the past decades, and the result is the pharmaceutical industry is no longer viewed as a segmented type of a corporation, yet is unfortunately viewed as one with the objectives of greed and profit, and there are no exceptions of this perception that has been known to members of the pharmaceutical industry, yet have refused to shift their own point of view regarding this accurate premise the public has of them

Fear ensures loyalty.” --- Author unknown
Dan Abshear (what has been written is based upon information and belief).