Monday, March 23, 2009

Pharma Reps' Worst Fear Is Near: Outsourced to the Internet!


When eDetailing was relatively new in 2003 -- before the dawn of Web 2.0 -- there were about 90,000 pharmaceutical sales reps. In 2007, just when the hype about Web 2.0 began and the physician social networking site Sermo was launched, the number of sales reps peaked at 102,000. Today, there are about 92,000. In 2012, ZS Associates predicts the number will be 75,000 -- the lowest since 1996 when the sales rep expansion was just starting.

About 45,000 doctors meet with detailers using online video, and 300,000 physicians say they are open to doing so, said a September 2008 study from Manhattan Research. This trend is worldwide. Tomorrow, in an exclusive interview with Mark Bard, President Manhattan Research, we will talk about technology adoption and integration trends in physician practices across Asia (see "Taking the Pulse™ Asia: Asian Physicians and Emerging Information Technologies").

There seems to be a correlation going on here -- one that sales reps have long feared: as pharma adopts the Internet for reaching physicians, they will start getting rid of sales reps. Those that supported the adoption of eDetailing by the industry used to allay these fears by saying things like "the best eDetailing programs work hand-in-hand with the sales force" and "eDetailing should complement the sales force" (for more on the history of eDetailing, you can order the eDetailing Supplement to Pharma Marketing News. Use the discount code 'EDET64297N' and save $7).

You may no longer hear concerns from pharma people -- except from sales reps -- about eDetailing replacing sales reps. And developing programs that "complement" the sales force may now have less appeal. "Drugmakers are responding to hard times with layoffs and a shift toward online marketing," proclaims an article in today's American Medical News ("Doctors increasingly close doors to drug reps, while pharma cuts ranks").

The current recession offers pharma (and other industries) a great opportunity to adopt new technology! You can lay off people and replace them with off-shore resources (see "Pfizer Pfires Thousands of Americans, Outsources Tasks to India") and/or with new technology (eg, social media).

To be sure, visits by drug reps will not disappear entirely. The hope is that the sales force that survives the layoffs will be "better trained and have a greater depth of clinical and scientific knowledge," according to experts cited in the American Medical News article.

10 comments:

  1. Len Starnes2:20 PM

    John, what a timely and sobering post this is. A true wake-up call for the industry.

    Quite rightly you cite the advent of physicians' social networks on the attrition timeline, and, as it happens, I opened a Linkedin poll this weekend asking:
    Will doctors' social networks radically change pharma marketing & sales?

    The response has been overwhelming, the comments thick and fast:
    http://polls.linkedin.com/poll-results/28204/lakmg

    So far it looks as though the majority believe that radical change is on thé way.

    ReplyDelete
  2. One-to-one to Many-to-one

    Our industry has been known to market pharma goods through one-to-one relationships with prescribers. Today, technology, and globalization is changing the nature of pharma marketing and selling to 'Many-to-one'. There are 'many media' to interact with the prescriber prospects. So change in prescription habit of a target prescriber will not depend on the one-to-one relationship (ie. MR and doctor) alone, it will depend on the 'Many-to-one interactions'.

    Hence, the pharma marketing game is becoming more complex. Pharma marketers have to manage more variables of marketing to engage prospects and customers:

    1) MR-doctor
    2) DTC (mainly TV) in America and New Zealand
    3) Journal and other print ads
    4) Internet sites and internet marketing communication activity like social media
    5) The next slowly building revolutionary mobile based marketing activity (mPharma marketing)
    6) Opinion builder doctors and patients activity
    7) The trend of participatory medicine where the patient is an empowered entity
    8) Conference marketing

    We contemporary pharma marketers are indeed participating in the transformation of 'global' pharma marketing.

    ReplyDelete
  3. We have a social networking and informational site for PAs and nurse practitioners. They want it and it is growing well. So far, pharma has not embraced but we have the capabilities to do e-detailing should a company choose to do this.
    It's a brave new world.
    Dave Mittman, PA
    President, Clinician 1

    ReplyDelete
  4. Stephen Smith12:03 PM

    Pharma isn't reducing rep headcounts because eDetailing has arrived. The correlation is the reverse: as pharma's drop reps, online solutions step in to fill the gap. Pharma built up a huge excess of reps during the late 90s and early 00s as they tried to compete w/ Pfizer on feet in the office. They saturated the market. Now, for purely marketplace and financial reasons (refused access to reps and loss of blockbuster revenue) they are reducing those headcounts. As they do so, they are looking for other ways to maintain voice and share of voice. And e is one solution. But we aren't seeing a spend increase commensurate with the savings from rep reducts.

    ReplyDelete
  5. Anonymous10:57 PM

    Agree with Steve. The lack of new blockbusters, patent expiry, the economics of sales reps have become less attractive. This is particularly true in primary care coverage(where most of the blockbuster attrition has been).

    The reduction in headcount has created a vacuum that requires cost efficient education, sampling and other practice services. Our Alternative Sales Channel has been adopted by many of the largest sales forces AFTER they did their biggest cuts. We also have taken the internet to the rep in the field, giving them 5 different access methods. Rep becomes the lead in enabling the proper method for serving the rep, even if it is not face-to-face. The blending of technology-enhanced rep-in-the-field and online sales reps for expanding night and weekend access (when physician is at home) provides better physician service than ever before.

    Physician patient loads and administrative obligations has left the traditional rep the "odd person out" in many high volume practices. Expanding marketer technology-based capabilities is essential to serving physicians on their terms.

    Mark Gleason
    Aptilon
    847-331-8628

    ReplyDelete
  6. I admit that there is no proven correlation between downsizing the salesforce and increase in non-personal selling/marketing via the Internet. However, the correlations you are talking about are also unproven. As far as I am concerned, we are all correct.

    ReplyDelete
  7. Anonymous12:23 PM

    Do you know what evidence based research is?
    Equating sales rep decline with e detailing is a weak argument, of course as a marketer you are hoping this might convince companies to spend more on this since you may be invested in it?

    ReplyDelete
  8. Don't be silly! Everything I have invested in has tanked!

    And this blog is more about opinion than about evidence. If you want evidence go... come to think of it, where would you go for evidence about such a correlation?

    In any case, I'm sure it's easy to find "evidence" to support any view you choose.

    ReplyDelete
  9. Anonymous2:09 PM

    Basically, you are saying "DON'T go into pharmaceutical sales??? In life/health insurance sales now and the market is oversaturated with agents. Thought pharma sales might be better - doesn't sound true now that I have spent a day researching whether or not to try to change fields.

    ReplyDelete
  10. They may be looking for a different sort of salesperson than they have been hiring for the last 15 years or so. Listen to this podcast and you may find a job opportunity: http://bit.ly/e9YtuR

    ReplyDelete