Sales Force Effectiveness

The traditional sales force model is no longer effective as doctors are no longer the key prescribing decision makers. Governments and payers are implementing cost cutting initiatives and promoting generic use in an attempt to control escalating healthcare costs. This has made it increasingly difficult for sales representatives to promote expensive branded drugs to doctors.

Report Highlights
Optimizing sales and marketing resources, and identifying influential stakeholders is critical, as decision making around prescribing choices becomes more complicated following the emergence of additional stakeholders such as government bodies and payers.

Most emerging models appear to be moving from the sales representatives working in silos, to a key account management (KAM) style role; treating local healthcare economies as an account.

eDetailing is becoming an increasingly attractive marketing tool for Pharma. However, pharma companies have been slow to adopt the practice. This is possibly due to the difficulty in measuring ROI and most importantly, the unimaginative format of eDetailing to date
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CHAPTER 1 EXECUTIVE SUMMARY 4
Scope of the report 4
Chapter summary 4
Key findings 5
CHAPTER 2 SALES FORCE EFFECTIVENESS IS EVOLVING 9
Promoting branded pharmaceuticals is increasingly difficult 10
Current drivers of the sales force effectiveness evolution - why traditional models no longer work 11
Doctors are closing their doors to pharma sales reps 11
Prescribing decisions are no longer in the hands of physicians 11
Physician perks have cast reps and the pharma industry in a poor light; 12
Physicians overwhelmed by frequency of rep visits 12
The US Prescribing Data Restriction Program may force Pharma to use new physician targeting models 13
Poor public perception of the pharmaceutical industry is hindering sales and marketing efforts 14
Government and payer cost-cutting is putting pressure on Pharma ROI 16
P&R restrictions impact Pharma's sales and marketing operations 18
Pharma must address the needs of emerging stakeholders 19
KOLs endorsement is key to a drug's survival 20
As pharmacists' responsibilities grow they should be considered as more than simply drug dispensers 22
Pharmacists become prescribers 22
Growing power of pharmacist substitution 23
Nurse practitioners have the power not only to prescribe but also to influence drug formulary inclusion 23
Patient-centric healthcare is the future 24
Sales force assistance with patient compliance programs benefits all stakeholders 24
CHAPTER 3 SALES FORCE EFFECTIVENESS MODELS 26
Evolving practices in sales force effectiveness 27
Establishing a new model that is both efficient and effective 28
Network intelligence is a key factor in designing new sales models 29
Performing network intelligence through patient-flow potential data helps to validate referral data gathered by reps 29
Key account management, the new buzz word in SFE-based selling models 30
Takeda revolutionary move to KAM 33
Recordati's KAM model gives representatives more responsibility and freedom 36
Abbott implements a KAM sales model to adapt to the changing dynamic in healthcare systems 39
Service model - offering value-added services 42
Tools that add value to sales force effectiveness models 44
eDetailing is underused in its current format 44
Live virtual eDetailing 46
Scripted eDetailing 47
Website linked eDetails 47
eDetailing enhances prescriptions of Merz's long-standing antifungal agent 49
Reaching physicians through electronic Continual Medical Education (eCME) 50
Criticism of Pharma-sponsored CME has led Pfizer to withdraw from sponsorship 52
PDAs and tablet personal computers - the new sales aid? 53
Social media strategies focused on increasing share of voice 54
CHAPTER 4 OPTIMIZING SALES FORCE EFFECTIVENESS 55
Sales forces are becoming leaner and more efficient 56
Adaptation of sales force effectiveness to a rapidly changing healthcare environment 57
Scientific/Medical Liaison Officers - a much-needed role to address widening stakeholder needs 58
Accurate segmentation is a key factor in the effective deployment of sales and marketing resources 61
Optimizing sales force size 62
Product lifecycle sales strategies need to be realigned to consider current SFE conditions 64
Cost-cutting and lack of adequate resources has led to co-promotion and outsourcing agreements 66
Co-promotion - to be successful good communication between partners is paramount 66
Outsourcing sales forces is a logical step for Pharma to maximize market penetration and cut costs 69
Optimizing return on marketing investment 71
Monitoring ROI - the way forward 73
CHAPTER 5 BIBLIOGRAPHY 75
Publications and online articles 75
Conference literature 82
Datamonitor reports 82
APPENDIX 84
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Table 1: Pharma cost cutting strategies, 2007 17
Table 2: Results of Recordati's KAM model assessment 38
Table 3: Proportion of physicians practicing in the US by type, 2008 63
Table 4: Datamonitor exchange rates ($) 87
Table 5: Examples of pharmacist prescribing in the US and Canada 87
Figure 1: GlaxoSmithKline's growth in marketing yield and profitability, Q3 2007-Q2 08 10
Figure 2: Decrease in primary care product details made by reps in the US, 2003-07 13
Figure 3: The public struggle to trust pharmaceutical companies 15
Figure 4: Global cost cutting exercises in the pharma industry 18
Figure 5: Key stakeholders Pharma must interact with 19
Figure 6: How Pharma segments responsibility for KOL relationships 21
Figure 7: Global pharmaceutical sales models 28
Figure 8: Remapping of key stakeholders in the UK healthcare market 30
Figure 9: Key account management model framework 31
Figure 10: Advantages and disadvantages of a KAM model for Pharma 33
Figure 11: Key characteristics of high-value customers identified by Abbott 40
Figure 12: Results of Abbott's' KAM model were measured using concrete and soft measures to determine return on investment 41
Figure 13: US primary care physician's ratings of rep services, 2008 43
Figure 14: Doctors' preferred method of when to conduct an eDetail 45
Figure 15: Drivers and resistors of eDetailing 46
Figure 16: Merck & Co.'s eDetailing service 48
Figure 17: Different eCME options offered by the American College of Physicians (ACP) 51
Figure 18: Segmentation strategies in sales force effectiveness 56
Figure 19: Minutes per rep product detail: primary versus secondary care 59
Figure 20: Segmenting physicians by prescribing practices 61
Figure 21: Sales force effectiveness lifecycle management 66
Figure 22: Proportion of involvement of managers from different business units in a co-promotion (%) 68
Figure 23: Methods of measuring ROI for sales force effectiveness 72
Figure 24: New product launch metrics for assessing the success of promotional efforts 74
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