Are Sales Reps Necessary?

That's a weird question, considering that there are about 100,000 pharmaceutical sales reps out there today in the US. Sales reps are such a staple of the pharmaceutical sales and marketing machine that it's almost a sacrilege to suggest that they may not be necessary.

Yet, recent announcements by Pfizer, for example, proclaim that there are "no sacred cows" when it comes to cutbacks:

Pfizer CEO Kindler told Wall Street analysts recently: "There will be no sacred cows. Everything is on the table." See "Transforming Pfizer?" (Forbes Online).

In this atmosphere, downsizing the sales force is definitely an option that many pharmaceutical companies will consider.

But the usual 10-20% cut may not be enough, especially if a good portion of that cut is in support staff rather than in-the-field reps.

I've been hanging around CafePharma lately just to hear what pharma sales people are thinking. It turns out that many of them don't think they are worth the salaries they are paid and that they are just not that necessary. Some think any run-of-the-mill UPS delivery person can provide almost the same value-added services as they can, which involves mostly distributing samples and lunches.

Here are some comments I picked up from a CafePharma Lilly discussion board. The thread began when Alex Berenson, a New York Times reporter who wrote an article about Lilly's Zyprexa coverup ("Eli Lilly Said to Play Down Risk of Top Pill", NYT, 12/17/2006), asked for informants to come forward. The discussion quickly turned to how bad cooperating with the press is for reps.

"The NY times is a worthless rag these days. We all know that. Anyone in the industry should turn on that paper. The articles only hurt the reps, not the company. When cuts have to be made, where do they come first? Oh, that's right, the reps."

Yeah, Duh! Reps are first to cut because (1) there are too many of them, (2) they get paid too much, (3) they are less and less effective. That's not me saying these things, that's the reps themselves saying this:

"Hey chief, I've been in this game for 10 years, and guess what:

1.) We don't provide value anymore.
2.) Without the sales and marketing arms, drug prices would go down.
3.) Charity and patient assistance would be the same.
4.) The docs could sure as shit get their samples directly from the company.
5.) The public, congress, and consumer advocacy groups would stop hating us because the most visible part of the industry, i.e., you and your little rolly bag, would not be front and center to the 65 year old man with diabetes in the waiting room.

"You really think that you are worth your salary? Ask Indy why they are sending out web based sample ordering systems to "select" offices to "pilot." We don't have long. Hope you have planned, because I sure as hell have."

To which someone responded:

"It's been tried before...nothing beats person to person contact..."

Speaking of person-to-person contact, you should read the Time article, "Attack of the Pharma Babes," written by Scott Haig, a physician. He notes, among other things, the following: "But 10 minutes of rapt attention from a smiling beauty [sales rep] is still 10 more minutes than usual." You can read more about pharma sales rep babes in my previous post about pharma's penchant for hiring former cheerleaders. See "Sexy Reps Sell Rx."

But, we need to question the importance of person-to-person contact, especially these days when MySpace offers a credible example of the popularity of non person-to-person contact. OK, it's popular, but is it effective? Or is it applicable to pharmaceutical sales? I don't know. Nobody or no company I know of has built a MySpace sales application for docs. Sounds like a good idea to me.

Anyway, let's continue with the CafePharma dialogue;

"Here's some facts for you 'chief'. By the way, I've been in the industry for 9 years, so I don't need to be talked down by your sorry ass.

"1. The good reps still provide value. I agree there shouldn't be 100,000 drug reps in the U.S. That's ridiculous. After the clueless Barbies and Kens are weeded out over the next few years (first Pfizer, then GSK, etc.) it hopefully will resemble what it was like when you and I started and even years before if they eliminate enough. Being able to regularly talk with most physicians would be a great thing once again.

"2. Without sales and marketing arms, SALES GO DOWN. The biggest costs and reasons for high prescription drugs are not the drug reps. $35 billion dollars a year are spend on R and D by Pharma companies in the U.S. $15 billion is given out by pharma

"3. You said charities and patient assistance would remain the same. How? You have to have sales to support samples, patient assistance, etc. Companies like Lilly or Pfizer sure aren't going to continue to spend $35 billion in R and D if they won't have blockbuster products anymore and sales go down--which they would without sales forces. As for cost of drug reps, taking a generous $90,000 per year average in wages/benefits x 100,000 reps= $9 billion dollars. That's a lot, granted and should be reduced. However, $35 billion for R and D, $15 billion for samples and $12 billion for Patient assistance adds up to $62 billion dollars a year. That's not even counting the untold billions that Big Pharma gives to charities. I used to sell for JNJ and we were REQUIRED to give generously to United Way, among other charities. If companies' sales go down, so would charitable contributions.

"4. Samples directly from the company: Like someone else posted, face to face sales is still the most effective method.

"5. The public hates us because of slanted reporting like your buddy Alex Berenson at the NY Times. If he or any of his integrity-lacking journalists would ever present the WHOLE story (including the good things) about our industry and not just the negative--maybe there would be a different perception. I don't know you are attacking me and my "wheelie bag" when you claim to be a rep, also. I'm assuming you slipped and you are not even a rep, but I digress.

"Regarding 'am I really worth my salary'? Hell, yes I am worth my salary. The AVERAGE UPS driver makes over $25 an hour now (straight pay). At 50 hours a week, without any overtime, holiday, extras, etc.=that's around $65,000. I have a friend who's been with UPS and he makes almost 100K. If we are considered 'only UPS drivers and caterers', we should at least make what we do. We are actually doing three jobs: 'UPS delivery people', caterers and sales people. We all have at least bachelors degrees, have to learn technical information and the good reps out there do provide value to the doctor and staff." per year in the U.S. This is listed under "marketing" , which it is; but it's very misleading as many billions of dollars in samples go to those who need it. That's not paid for by the taxpayers, it's paid for by companies like Lilly, Pfizer, etc. $12 billion dollars a year are given out in various Patient Assistance programs in the U.S. per year.

I note that this defender of reps confesses that reps act as UPS delivery people and caterers as well as sales people. Which means that roughly two-thirds of a rep's focus is on sales support rather than sales per se. More importantly, delivering samples and lunches can be handled much more cost-effectively by other means, including via the Internet. Just look at all the companies that are setting up online catering services for the pharmaceutical industry (find a list here).

Another CafePharma member speaks up (boy, these guys have potty mouths!):

"Both of you idiots just keep on thinking that bullshit and maybe someday you will believe it. If you had ANY decent relationships with ANY of your customers you would be able to ask them if there is ANY future to your job, and i can assure you that they would tell you that there was not. The very fact that you equate the need for samples with a need for you should tell you that you are reaching. Come on, you don't really believe that Lilly is going to continue to pay you 100k a year to get little forms signed do you? You just said yourself that a UPS driver could do it for 65K, and that is if they were only delivering Lilly drugs."

Which elicited this response:

"From your brilliant perspective, getting the opinions of my physicians who I have good relationships with will tell us all the future of the pharmaceutical industry. "Do you think there will be drug reps in the future Doctor Jones (my favorite doc.)? No. That's too bad. I'm leaving the industry now". I said in my last post that 100,000 are WAY TOO MANY drug reps and there will be significant cuts over the next several years (Pfizer, GSK and everyone else will follow). That doesn't mean they are going to completely eliminate the sales forces. So what if they try pilots where they mail samples to certain offices? That doesn't mean doom and gloom and EVERYONE is going to have their jobs eliminated.

"If you look at history and even morons (whoops) like yourself, they believe that robots were/are going to replace people for everything. For SOME THINGS and jobs, robots are useful; for the majority of things they are not. Like I said, why reason with someone like you who has a pea-sized brain, is bitter at the world and "doesn't play well with others"? I guess you are too much of an A-Hole and you have dragged me down to your level with insults. Sorry. Many thousands of rep positions will be eliminated over the next few years (as Forbes and other REPUTABLE sources suggest), but not everyone dipshit. If you claim to have been in the industry for 10 years (very doubtful) or even a rep as it is (extremely doubtful)--you'll easily be eliminated with your shitty attitude and poor sales numbers. You can't be a top performer as bitter as you appear to be. By the way, I know you are very concerned for my welfare (sarcasm); so yes I have prepared in case something goes down with my future in this industry and my spouse does make good money."

At that point, I left CafePharma and washed up.

What Do You Think?

What Are Sales Reps Absolutely Necessary For?
	Increase Scripts Written
	Deliver Samples
	Source of Practical Information for Docs
	Cater Lunches for Docs
	Compensate for Lack of Trained Hospital/Office Staff
	Manage Patient Assistance Programs
	All of the Above
	None of the Above

Take this poll about the necessary roles of pharmaceutical sales reps. Some of the roles are self-explanatory. For "source of practical information," I mean in the sense put forth by Scot Haig in the Time article: "many doctors rely on reps for practical information. Someone has to show the doctors the new stuff they can prescribe, or the new procedures they can do using new medical equipment." He may be thinking of medical device reps, but my poll is about Rx drug reps.

Scot also was talking about hospital sales reps compensating for lack of staff when he said: "The third, most urgent reason we need our reps is that hospitals are low on trained staff these days. And as more and more of our nurses are immigrants from countries that don't have such amazing medical technology, the rep's job in the hospital has become even more essential." This last comment seems a bit prejudicial, and I am not sure it is applicable to office-based Rx reps. IMHO, if reps are needed to perform healthcare functions for docs, then our healthcare system is in serious trouble -- more serious than high drug prices even!


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