Pfizer Inc., the world's biggest drugmaker, may cut as much as 30 percent of its 38,000-member sales force as it loses patent protection on several key drugs, according to Lehman Brothers analyst Tony Butler, who cited ``industry contacts.'' (Bloomberg, 2/8/2005)According to a 12/20/2004 AP story:
New prescriptions for Pfizer Inc. pain reliever Celebrex have fallen by more than half since a government-led study linked the drug to an increased risk of heart and strokes two weeks ago. New prescriptions for Celebrex fell 56 percent to 70,760, according to Verispan. The U.S. Food and Drug Administration requested that Pfizer stop advertising Celebrex but data from ImpactRx reveal that the company has intensified its sales calls to physicians. According to ImpactRx, 45 percent of sales representatives' visits to primary care doctors to discuss popular pain relievers were about Celebrex in the three days ended Dec. 20. For the three days ended Dec. 17, the day of the announcement, it was 35 percent. That increased to 55 percent in the three days ended Dec. 22I guess you don't cut this deeply without a reason. Could it be that they are preparing for bad news about Celebrex in advance of next weeks FDA hearings?
Here are some other explanations offered by members of Pharma Marketing Network and subscribers to Pharma Marketing News:
This could be the signal that starts the great pharma salesforce massacre. On the other hand, I'll believe it when I see the blood in the streets. Seems I just saw McKinnel on record as saying PFE would stay the course. Of course, when the denials are strongest just before events belie them.Hmmm... could this be the tremor before the long-anticipated Tsunami of pharma salesforce cuts? Could be. As reported in today's NYT: "Large-scale layoffs from Pfizer may lead to a new period of retrenchment among leading drug makers, with many of them under profit pressure as a result of rising spending for marketing and failures in the last several years to discover medications with blockbuster sales. Other companies would probably follow Pfizer's lead, analysts said." (Some Analysts Expect Job Cuts From Pfizer, NYT, 2/9/2005).
I think it's even bigger than Pfizer/Celebrex. I saw a segment on CNBC the other might where an industry analyst mentioned that there was a lot of buzz that pharma marketing and especially the sales forces are next to go (and soon). Pfizer could make the first move, but we can probably expect a much broader trend due to increasing financial pressures.
We are just starting to witness the fat trimming that is about to take place mostly in sales force side then marketing. With 26% decline in sales rep productivity since 1996 when the industry started to fight for Share of Voice and doubled rep numbers to what we have today, something got to give when there is no ROI. This is not going to be pretty picture friends. I was speaking to a CEO of one of the top 5 multinational companies yesterday and he indicated that there is going to be significant adjustment taking place for the industry especially in sales and marketing.
I believe this is going to start the "Domino Effect". It seems to me that they split the sales forces into different divisions to promote different products to the same physicians and added more sales reps to increase the the number of details and actually reached the "Point of Diminishing Returns" some time ago. I think that a lot of companies have needed and wanted to cut their sales forces, but have been reluctant to "Be the First", for fear of the negative PR.
The NYT article goes on to say: "Since 1998, Pfizer and the other drug companies have increased their sales forces by 42 percent, Mr. Sylvester wrote. As a result, doctors are increasingly resistant to visits from representatives, and only 20 percent of such visits result in seeing a doctor."
Declining sales force productivity has been a major issue on the minds of sales managers and corporate executives of pharmaceutical companies large and small for quite some time. More and more physicians are limiting face time and closing their doors to sales reps.
We all see the problem every time we visit our doctor -- looks like Friday night at O'Hare with all the reps circling.
Perhaps the time has come to reassess the pharma sales process and place greater attention on the quality of the physician-rep relationship rather than on quantity-based traditional representative activity metrics such as number of calls per day. (See PMN Reprint: "Finding the 'Right Stuff' to Revitalize Sales Productivity" for more on this subject).
Still, I got to wonder if this portends the imminent withdrawal of Celebrex from the market, which I predicted weeks ago? (See "Cox-2's Die Hard: With a Vengeance").