By: Justin Wutti, CIS Senior Associate
justinwutti@cis-partners.com
For years, the model for sales and marketing in the pharmaceutical industry has been a mass-market approach. Employing a huge sales force and spending millions of dollars on samples and television advertising has long been the norm in the industry. However, this approach seems to have run its course.
According to a report published by PricewaterhouseCoopers LLP, pharmaceutical companies will completely revamp their sales and marketing strategies over the next 10 years. The new target-market approach is believed to create revenue growth and value for patients (1). “Pharmaceutical companies will need to package products and health services in a way that adds value, demonstrating that their medicines really work, that they provide value for the money and potentially reduce healthcare costs by being better than alternative forms of intervention," said Anthony Farino, PricewaterhouseCoopers' U.S. pharmaceutical and life sciences advisory services leader (1). Large sales forces will transform into smaller groups of smarter, more effective sales representatives. Companies will be forced to hire people who can negotiate with powerful healthcare payers. In reference to the shrinking sales forces, Joe Palo, an advisor to PwC Pharmaceutical and Life Sciences Advisory Practice says, “It’s not going to go to zero, you are going to have blockbuster products and sales forces going into primary care, but there will be less” (2).
There is much evidence that the current large sales force approach simply isn’t working anymore. For example, 1 out of 5 doctors now refuses to see sales representatives, and return visits to doctors have declined (2). Additionally, the number of sales representatives has been growing 3 times faster than the number of physicians. Because of the increased number of specialty products being sold, pharmaceutical companies will also recruit people with a clinical background, such as nurses and pharmacists. Many companies are investing in genomics, proteomics, and metabolomics for specialty therapies (2).
All of these changes will force payers, providers, and physicians to work more closely in order to figure out what is best for the patient, which will become increasingly important as the healthcare system changes to focus more and more on patients’ health and well-being.
SOURCES:
(1) http://www.msnbc.msn.com/id/29386637/
(2) http://www.mmm-online.com/Pharma-sales-forces-will-shrink-clinical-skills-in-demand/article/127857/
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