Pfizer forecastsPfizer officials said headcount reductions to the company's sales force would be "modest," coming chiefly through attrition.
"Field force size has a lot to do with what you have to say," said chairman and chief executive Hank McKinnell, speaking to investors this morning. "We have a lot to say."
McKinnell said that, due to upcoming launches and the demands of promoting products already on the market, sales force reductions would not be a significant part of cost-cutting measures expected to save the company $4 billion by 2008.
Pfizer officials were coy about providing a number of sales positions being eliminated, but said the goal is to pare the number of reps visiting physicians down to two per physician for each product. Currently, said Pfizer U.S. pharmaceuticals president Pat Kelly, Pfizer's rep-to-physician ratio in the U.S. ranges from 2 to 5 reps per physician. Karen Katen, vice chairman of Pfizer, Inc. and president of Pfizer Human Health, added that U.S. sales reps would be reorganized by state.
The field force reduction is part of a broader menu of cost-cutting efforts, including a further tighening of procurement practices, designed to help the company overcome a raft of looming patent expirations. Due to loss of exclusivity and safety concerns hitting sales of Celebrex and Bextra, the company projects flat earnings for 2005, with a return to double-digit growth in 2006. Katen said erosion of the company's Cox-2 market share appeared to have plateaued, and said Pfizer expects the franchise to bounce back next year, as labeling changes sink in.
McKinnell, forecasting a difficult year, said the company had expected to hit turbulence in 2006 and 2007, but that the unexpectedly early loss of exclusivity for Neurontin and erosion of Celebrex and Bextra sales had accelerated the crunch. On the bright side, McKinnell said that through careful planning and cost-cutting, "We were able to turn what in '96 we called 'The Cliff' into a one-year flat spot."