H E A LT H C A R E
Pharmaceutical Sales Force Effectiveness Strategies Evaluating evolving sales models & advanced technology for a customer centric approach By Dr Ksenija Jakovcic
For more information, please call Maureen Croce at 866/464-2776 Fax: 781/639-0529 email:
[email protected]
Dr Ksenija Jakovcic Ksenija Jakovcic is Business Development Manager at SanMed, and provides independent consulting services to the pharmaceutical and biotechnology industry. Following her medical practice, Ksenija has worked with international pharmaceutical companies in Austria and the UK around the areas of clinical research and sales & marketing. Ksenija holds an MD from the University of Vienna, Austria and an MBA from the London Business School.
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For more information, please call Maureen Croce at 866/464-2776 Fax: 781/639-0529 email:
[email protected]
Table of Contents Pharmaceutical Sales Force Effectiveness Strategies
Executive Summary
9
The pharmaceutical industry at a crossroads
9
Sizing and structuring the sales force for strategic advantage
10
Recruiting, training and motivating an outstanding sales force
11
Reinventing the pharmaceutical sales model
12
Utilizing new technologies for sales excellence
13
Beyond 2010 – The future of pharmaceutical sales
14
Chapter 1
The pharmaceutical industry at a crossroads
16
Summary
16
Introduction
17
The state of the pharmaceutical industry Patent expiration and generic substitution Pipelines not delivering innovative products Slowing growth in mature markets Government intervention and price controls Poor reputation and new restrictions Restricted access for pharmaceutical sales representatives Pharma industry revises Codes on interactions with physicians
18 18 20 23 25 26 27 29
The traditional go-to-market strategy ROI in pharmaceutical sales force has plummeted The access problem The end of armies of pharma sales reps in the field
31 32 34 34
Need for new marketing and sales approaches
36
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For more information, please call Maureen Croce at 866/464-2776 Fax: 781/639-0529 email:
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Chapter 2
Sizing and structuring the sales force for strategic advantage
40
Summary
40
Introduction
41
The role of the sales force Determining sales force size Activity-based method Target return-per-call method Sales response method Getting sales force deployment right Resource allocation Optimal profitability Matching sales force structure with companies’ business lifecycle Sales force structure Getting the size right
41 42 42 43 44 45 45 46 48 48 50
From mass market endeavor to individual physicians’ needs Rethinking targeting strategy The impact of lifecycle factors on sales force targeting Year 1 – New product launch Year 2 – Accelerate growth Year 3 – Defend and grow Year 8 – Manage the sales decline
51 51 55 55 56 56 58
Conclusion
59
Chapter 3
Recruiting, training & motivating an outstanding sales force
62
Summary
62
Introduction
63
Hiring pharma sales reps: Getting the process right The impact of bad hiring decisions The right recruit Key points to consider when hiring
64 64 65 67
The evolving training needs of the pharma sales force The training dilemma Training for the new environment Changing environment places different demands on sales training Motivating and compensating the sales force Motivation Driving performance through incentive compensation plans
69 70 72 75 79 80 82
Conclusion
83
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Chapter 4
Reinventing the pharmaceutical sales model
86
Summary
86
Introduction
87
Sales force model progression
88
Addressing a range of new customers Existing stakeholders are gaining influence The path to key account management
89 90 92
Is the pharma sales rep an endangered species? The customer-centric approach: a new model for pharmaceutical sales
95 95
From mass army to specialty sales force
98
Conclusion
99
Chapter 5
Utilizing new technologies for sales excellence
102
Summary
102
Introduction
103
e-Learning – meeting sales reps training needs Case study – e-Learning as part of AstraZeneca’s sales training strategy
104 104
e-Detailing Virtual live e-Detailing e-Detailing through a portal for doctors Scripted e-Detailing The benefits of e-Detailing Putting it in practice: The key factors for success
105 106 106 106 107 108
From tablet PCs to closed loop marketing Will closed-loop marketing transform the pharma sales process? Common pitfalls on the way to implementing closed-loop marketing How to ensure successful implementation of closed-loop marketing
109 111 114 116
Conclusion
117
Chapter 6
Beyond 2010 - The future of pharmaceutical sales
120
Summary
120
Introduction
121
The sales force of the future: variable in size and structure
121
v For more information, please call Maureen Croce at 866/464-2776 Fax: 781/639-0529 email:
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Will samples need pharmaceutical sales reps?
123
New industry models and their implications for sales force effectiveness Aligning marketing and sales to match the healthcare environment The use of analytics to drive sales force approaches Content-driven interactions between sales reps and customers To what extent will the sales model change in the immediate future? Designing a marketing and sales function that is fit for the future
125 126 126 126 127 129
Chapter 7
Appendix
134
Bibliography
134
Index
136
List of Figures Figure 1.1: Figure 1.2: Figure 1.3: Figure 1.4: Figure 1.5: Figure 1.6: Figure 1.7: Figure 2.8: Figure 2.9: Figure 2.10: Figure 2.11: Figure 3.12: Figure 3.13: Figure 3.14: Figure 3.15: Figure 4.16: Figure 4.17: Figure 4.18: Figure 5.19: Figure 5.20: Figure 5.21: Figure 6.22: Figure 6.23: Figure 6.24:
Projected revenue losses ($bn) due to patent expirations, 2007e-2012p R&D investment ($bn) in the US, 2004-2007 FDA new drug approvals, 2000-2008 Global pharma market growth slowdown Survey of US medical practices, February 2009 US sales force size - top 30 companies, 1997-2007 Pharma sales rep funnel Field force: Sales, cost and profit impact The impact of three different sizing scenarios on company profits Physician segmentation enabling effective targeting Modeling doctors’ prescribing behavior The training trade-off Effective sales force training responds to a new selling environment Sales rep characteristics with the most influence on physician satisfaction Implications for future sales force training Sales force restructuring and innovation - State of the industry The expected shift in marketing and sales efforts Implications for pharma companies on the path to KAM e-Detailing as part of the multi-channel approach to CRM CLM feedback loop TGaS survey on CLM implementation among top pharma companies, 2007-2008 Sampling trends %, 2008 Readiness for new business models in the next two years Future organization of the pharmaceutical marketing and sales function
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19 21 22 24 28 32 34 47 50 54 58 71 73 74 76 89 91 94 109 112 114 124 128 130
For more information, please call Maureen Croce at 866/464-2776 Fax: 781/639-0529 email:
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List of Tables Table 1.1: Table 1.2: Table 2.3: Table 2.4: Table 3.5: Table 5.6: Table 6.7:
Blockbusters going off-patent 2010-2012 Planned job cuts by big pharmaceutical companies, October 2008 Target return-per-call method in eight steps by Zoltners & Sinha Comparison of sales force sizing methods Common pharmaceutical sales force training settings How tablet PCs support sales force activities New approaches to marketing and sales challenges
vii
20 35 44 45 70 110 127
For more information, please call Maureen Croce at 866/464-2776 Fax: 781/639-0529 email:
[email protected]