Market Report Source

Overview

Introduction

The environment in which pharmaceutical companies promote their products has become increasingly tough over recent years as a number of trends and factors drive changes. As the effects of shrinking pipelines and rising R&D costs impact companies, they are under increasing pressure to deliver greater productivity from their sales forces.

Scope

*Overview of the key trends changing the dynamics of promoting drugs

*Analysis of the key strategies companies can use to improve the effectiveness of sales forces

*Discussion of eight best-practice case studies across the US and European markets

Highlights

The increasing regulation of pharmaceutical marketing and promotion is set to continue over the next few years, driven both by authorities seeking to eradicate malpractice and by the pharmaceutical companies themselves seeking to rebuild the industry’s damaged reputation.

The emerging influence of new prescribers, such as nurses and pharmacists, and other stakeholders such as formulary advisers and payer bodies, is broadening the scope of sales force strategies.

Continuing and more effective use of segmentation and targeting will allow companies to improve the effectiveness of sales forces, and so drive sales growth, without resorting to the traditional method of increasing the number of sales representatives.

Reasons to Purchase

*Understand why the emphasis on sales force size in the pharmaceutical industry may finally be changing

*Assess the key strategies that may help improve sales force effectiveness

*Identify the opportunities to improve promotion through targeting emerging stakeholders

Table of Contents

About the Strategic Intelligence Team

CHAPTER 1 EXECUTIVE SUMMARY

Scope of the report

Format of the report

Latest developments

Executive summary

CHAPTER 2 CHANGING DYNAMICS OF PROMOTING DRUGS

Promoting branded prescription drugs has become more difficult

Branded drugs are facing a greater competitive threat from generics

Countries have been adopting measures to increase generic penetration

Generic drugs are posing a greater indirect competitive threat

Secondary care detailing is set to become more competitive

The industry’s poor reputation is damaging promotional efforts

The public’s perception of the industry has worsened

A series of negative events have driven the industry’s reputation down

The pharmaceutical industry is trying to win back physician and consumer confidence

Companies are increasing the transparency of their activities

Companies are using sales forces to improve their reputation through comprehensive marketing codes

The industry continues to be plagued by sales and marketing malpractices

Independent authorities and organizations are taking their own steps to improve the standard of promotional activities

US: FDA is reviewing the use of DTC advertising

US: Stanford Univeristy Medical Center bans physicians accepting gifts

UK: The government is attempting to clamp down on promotional malpractices

France: New Charter restricts the number of times sales reps can visit physicians

Detailing is becoming more complex

A multi-channeled marketing campaign is important

e-marketing is a valuable new marketing channel

Continuing medical education (CME)

The network of prescribing decision makers and influencers is becoming more complicated

Prescribers – nurses are permitted to prescribe in the US and UK

Prescribers – UK adopts revolutionary changes to allow pharmacists to prescribe

Key purchasing groups – tightening of budgets increases payers’ control and influence over prescribing

Consumers – influence has stabilized

Other influencers – growing influence of HTA bodies

CHAPTER 3 OPTIMIZING SALES FORCE EFFECTIVENESS

Introduction

The traditional sales force model is no longer effective

Companies need to integrate sales and marketing functions better

Synergies offer additional value

Poor communication and misaligned objectives have driven the two departments to work in silos

CRM systems can faciliate communication between sales and marketing departments

Optimizing the size and structure of sales forces

The use of contract sales forces can provide valuable flexibility

Companies can use contract sales forces tactically or strategically

The risks and benefits of contract sales forces

The size of sales forces need to be reduced

There are four key factors driving the reduction in sales representatives

Huge cuts in sales forces have yet to be seen across the industry

The structure of sales forces needs to be tailored to the customer

Multinational companies need to adopt a holistic approach to sales force effectiveness

The structure of national sales forces are often aligned by the boundaries of health authorities and organizations

Mirrored sales forces are not the most cost-effective approach

Companies should base the structure of sales force on customer groups

Productivity can be improved by increasing the number of products sales representatives detail

A more customer-orientated sales approach required

Account-based selling is set to grow

Case study: Takeda radically restructures UK sales force to become patient-focused

Case study: Eli Lilly is restructuring its US sales operations to become more customer-focused

Case study: Eli Lilly’s UK affiliate adopts an account management approach for its customers in the NHS

Is total solution-selling the answer?

Companies are becoming more involved in disease management programs

The ROI of disease management programs is questionable in some circumstances

The role of sales representatives is changing to improve quality of interactions

Companies are becoming increasingly dependent on effective segmentation and targeting of customers

Rogers’ ‘Diffusions of Innovation’ and Moore’s ‘Crossing the Chasm’ theories

Segmentation is highly complex in practice

Companies need to use segmentation analysis for targeting sales and marketing efforts

The key to sales force compliance is buy-in

BIBLIOGRAPHY

References

Conference Literature

Publications, online articles and news stories

Other Sources

Articles

List of Tables

Table 1: The characteristics of customers

List of Figures

Figure 1: The public perception of the pharmaceutical industry is, overall, not favorable

Figure 2: Physicians are subject to a number of prescribing influences, 2005

Figure 3: There are four main customer segments that influence prescribing decisions, 2006

Figure 4: S,G&A spend has a high correlation to sales, 2004

Figure 5: While an effective promotional strategy used to be based on three elements, the right channel has also emerged as an important element

Figure 6: Key risks and benefits of using contract sales forces

Figure 7: R&D expenditure has increased substantially, however, NME approvals by the FDA have not kept pace, 1990-2005

Figure 8: AstraZeneca has mirrored territory structures in the US, 2005

Figure 9: Structure of Lilly’s Business-to-Business Team providing healthcare services to the NHS in the UK

Figure 10: Lilly has a dedicated section on its UK website outlining the services it offers to the NHS

Figure 11: Rogers’ Innovator theory of customer segmentation

Figure 12: A fraction of GPs account for the vast majority of prescriptions

Figure 13: High potential customers should be the main target of promotional efforts

Figure 14: Average change in sales force size throughout a drug’s lifecycle