H E A LT H C A R E

Pharmaceutical Sales Force Strategies Driving ROI through best practice in targeting, management, outsourcing and technologies By Steven Seget

Table of Contents

Table of Contents Pharmaceutical Sales Force Strategies

Executive summary

10

Pharmaceutical sales force landscape

10

Sizing, structuring and targeting

11

Recruiting, training and rewarding

12

Enabling technologies

13

Outsourcing and partnering

13

Strategies for increasing promotional ROI

15

Chapter 1

Pharmaceutical sales force landscape

18

Summary

18

Introduction

19

Changing dynamics of the pharmaceutical industry Resistors to pharmaceutical sales growth Cost containment Generic competition and parallel importing R&D costs and productivity M&A activity Rising commercial expenses Physician detailing Commercial ROI Physician detailing ROI

19 19 20 21 22 25 26 27 28 35

Changing needs of the physician Detailing trends A quieter voice in a louder market Content not frequency The PhRMA code of conduct

35 36 39 40 41

Impact on the shape and role of the pharmaceutical sales force Organization Management Technologies

42 43 43 44

iii

Collaborations

Chapter 2

44

Sizing, structuring and targeting

46

Summary

46

Introduction

47

Sales force numbers Trends in headcount US sales force numbers European sales force numbers Japanese sales force numbers Case study: Pfizer

49 50 52 54 54 55

Sales force structures Trends in structure US sales force structures European sales force structures Japanese sales force structures

57 57 58 59 61

Segmenting and targeting Product prioritization Primary care versus specialty

62 62 63

Chapter 3

Recruiting, training and rewarding

65

Summary

65

Introduction

66

Recruiting talent Internal versus external HR

66 67

Training and development Benchmarking detailing performance Training versus coaching Case study: AstraZeneca

69 70 71 72

Incentives and rewards Trends in remuneration structure Incentive programs Non-cash incentives

74 74 78 80

Chapter 4

Enabling technologies

Summary

83 83

iv

Introduction

84

Sales force automation Sales force productivity Trends across markets Impact of new technologies Case study: Allergan

84 86 86 88 90

eDetailing

91 92 93 94 94 96 97

A software solution to increase face-to-face detailing time The ROI of video detailing Enhancing physician relationships through mPrescribing Trends in eDetailing eSampling Integrated web-based solutions Other technologies Laptop PDA Smart phone

Chapter 5

98 99 99 100

Outsourcing and partnering

104

Summary

104

Introduction

105

CSOs Trends in use of CSOs Add-on versus replacement Case study: Takeda Background Situation Taking a different path Regional Account Directors (RADs) Ashfield Healthcare ROI

105 109 111 112 112 112 113 114 115 115

Commercial alliances Trends in use of collaborative partnerships Co-promotion Co-marketing Strategic partnerships

117 117 119 120 121

Chapter 6

Strategies for increasing promotional ROI

124

Summary

124

Introduction

125 v

Measuring ROI Field force productivity Sales force ROI Organization Management Technology Partnering

125 125 127 130 131 132 134

CRM Physician’s perceptions Lasting physician relationships Partnering with the patient

136 137 138 139

Best practices Meetings and events Mid-level practitioners Permission-based sales model Case study: Pharma’s top-ranked sales force

140 140 141 142 143

Appendix

146

Primary research

146

References

148

Index

152

vi

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 1.8: Figure 1.9: Figure 1.10: Figure 1.11: Figure 2.12: Figure 2.13: Figure 2.14: Figure 2.15: Figure 2.16: Figure 2.17: Figure 2.18: Figure 2.19: Figure 3.20: Figure 4.21: Figure 4.22: Figure 5.23: Figure 5.24: Figure 6.25: Figure 6.26: Figure 6.27: Figure 6.28:

Resistors to pharmaceutical revenue growth 20 R&D expenditure as a proportion of sales, 1980-2003 24 R&D productivity, 1994-2003 25 Absolute and proportional promotional expenses, 2000-2003 26 Promotional expenses split by source, 2000-2003 27 Commercial ROI by leading pharma company, 2002-2003 30 Commercial ROI by leading biotech company, 2002-2003 32 Commercial ROI by leading specialty company, 2002-2003 34 Trends in the number of detailing visits per sales rep over next 2-3 years 37 Trends in the average length of detailing visits over next 2-3 years 39 Key influences on sales force ROI 42 Impact of US promotional spend on US sales, 2003 47 Impact of US detailing spend on US sales, 2003 48 Impact of US sales force size on US detailing spend, 2003 50 Trends in sales force headcount over next 2-3 years 52 Impact of US sales force size on US sales, 2003 53 Typical US sales force structure, 2003 59 Typical EU sales force structure, 2003 60 Typical Japanese sales force structure, 2003 61 Trends in the proportion of sales force remuneration comprised of basic pay over next 2-3 years 77 Greatest impact on sales force effectiveness over next 2-3 years 89 Uptake of eDetailing across Europe and the US 95 Trends in the use of CSOs over next 2-3 years 110 Trends in the use of collaborative sales forces over next 2-3 years 118 Field force productivity model 127 Sales force ROI model 128 Relative ROI impact of sales force effectiveness strategies 129 Survey respondents split by company type and region 148

List of Tables Table 1.1:

Total pharmaceutical R&D expenditure, 1980-2003

vii

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