It's been two years since Pfizer shook-up the industry by reducing its pharmaceutical sales force by 20%. Other pharma companies have since followed Pfizer's slash-and-burn lead. Schering-Plough recently eliminated 1,000 domestic sales positions while Sanofi-Aventis, Merck and Wyeth have also cut sales jobs. Pfizer is expected to further reduce its sales force as it looks to cut $2 billion by the end of the year.
The actual number of reps dropped 5% in the second quarter of 2008 to 91,652, down from 94,308 in 2007. Live detailing either face-to-face or by telephone, also declined in 2008, according to SDI's Detailing Audits. For the 12-month period ending July 2008, six out of the top 10 drug companies saw a drop in the number of detail encounters between reps and physicians. Several factors contributed to the decrease, including drugs that came off patent and alternative channels for physicians to turn to for information.
As 2008 comes to a close, the industry is faced with a traditional sales force model that is being increasingly challenged. One question on the minds of many industry observers is: What will the sales force of the future look like and how will it be measured?
Ovation Closes the Loop
Not unlike other pharmaceutical companies, the challenge for Deerfield IL-based Ovation Pharmaceuticals was to make the best use of a physician's time and provide concise information relevant to the individual physician. Ovation turned to tablet PCs loaded with closed-loop marketing (CLM) software that allows sales reps to retrieve data in real-time and capture information such as physician viewing and prescribing patterns.
The data is shared by not only sales representatives but also by brand managers who can get a sense of where improvements and enhancements are needed and how materials could be altered for the sales force to better address the specific needs of a particular physician. Half of Ovation's sales calls now include tablet PCs.
“From the sales perspective, it is important to have a marketing team that is completely dialed into the market, healthcare provider needs and preferences,” says Paul Stickler, senior director of sales for Ovation.
Stickler added that the fact that the different marketing teams can use this function to validate the value of content quickly is valuable to the sales team because the process helps to provide better promotional materials.
Stickler pointed out that CLM is changing the dynamics of the company's sales force strategy. “Information can be used more quickly than before,” he explains. “As a sales leader this means content is pushed out more frequently requiring timely training and frequent gut checks with the sales leadership to ensure proper utilization.”
In addition to adding greater efficiency to the sales force model, CLM is also saving Ovation money by getting promotional materials out faster, thereby reducing printing costs and time to market for new products.
Ovation has a portfolio of more than 20 medicines that are approved or currently in development. Its current product line includes a strong presence in central nervous system agents, as well as hematology and oncology offerings. Ovation's pipeline consists of several late-stage development programs including: Sabril (vigabatrin) for refractory complex partial seizures and infantile spasms and two additional epilepsy compounds in phase 3 development.
Old idea, new venue
The notion of CLM is nothing new. The telecommunications and technology sectors have been using it for years. Simply defined, CLM is a system where data can be shared between sales and marketing and customer-patterns can be tracked. But in the pharmacy sales force universe, the definition of CLM is not quite so simple.
“Different vendors have a different nomenclature,” says Subhash Vaid, VP and global CRM solutions & analytics at Bedminster, NJ-based Cegedim Dendrite. “I think that it's probably 360 degree communication with a customer. Pharma companies engage in marketing not sales. When a rep goes and details a doctor they are really doing marketing.”
Geoff Melick, EVP, interactive marketing and e-innovations, at Corbett Accel Healthcare Group, a Chicago-based healthcare communications company, says that CLM is the ability to use multi-channel communications to drive several channels to create interactions with customers and to get a better understanding of what their needs are.
“You want to target the right audience with the right message at the right time,” says Melick. “The only way you achieve that cohesive strategy is to have a strong interaction or a dialogue created through an ongoing relationship to capture the information about what physicians really need in their practice.”
Increasingly, large pharma companies including AstraZeneca, Bayer, Merck and Pfizer along with smaller specialty and biotech firms are aggressively pushing their CLM initiatives. And for good reason, said Mark Bard, president, Manhattan Research, a healthcare market research and services firm based in New York. Bard said that CLM provides rich feedback across all the different channels.
“These systems can feed that information back to the rep, the field force, and other points of contact in the system,” he says.
Bard noted that the concept of CLM is not that radical. “It's basically saying we are going to connect the dots of information and touch points.”
Part of its appeal, says Bard, is that it [has the potential to push] information in real time, so a rep can do updates right before they you walk into a physician's office for a call.
Data capture is another selling point for CLM. Bard says that tablet PCs and mobile devices are going to supply a lot more rich information at the point of detail. “You can now start to push information from interactions from medical affairs, with the website, with a portal. That information can be pushed out weekly, daily, and hourly,” he says.
Horsham, PA-based Proscape Technologies introduced CLM to the pharma industry in 2002. The company provides CLM software for Tablet PCs and other marketing channels to top-tier pharma companies, including AstraZeneca and Merck. Proscape has been promoting CLM as a way of helping the industry to adapt to change.
“The status is that the industry has moved to digital marketing and sales. The change has happened. It's become the standard, and the folks that aren't there are hustling to get there right now,” said Derek Pollock, president, Proscape Life Sciences. Pollock noted that the key to a successful CLM strategy is the ability to execute across the multiple channels, including the web, call centers, e-mail and direct.
“Multi-channel execution ultimately leads to an optimization of the commercial model around technology,” he explains. “You can change your commercial model to take advantage of something you couldn't do before. That's closed-loop marketing.”
Pollock continues: “The pharma company that can adapt, optimally leverage their technology, people and other resources, and strategize to really take advantage of this is going to emerge quite differently than the one that doesn't.”
Ovation for example, is expected to launch Xenazine (tetrabenazine) by the end of 2008. Xenazine is approved to treat chorea associated with Huntington's Disease.
The company is in the process of developing Xenazine launch materials for the tablet PC that will include papers, the package insert and all Risk Evaluation and Mitigation Strategy materials—slated to be used pending DDMAC approval.
Ovation's Mike Burke, chief commercial officer, points out that the tablet PC offers the ability to automatically download new materials to every sales rep's computer as they are approved, while at the same time allowing materials to be developed and reviewed right up to a launch meeting and for material roll-out via internet connections for materials approved after a launch meeting.
Tablet PCs, for instance, offer the capability to profile and segment customers into different groups and deliver segment specific promotional messages to physicians. In the case of Xenazine where there may be physicians who have experience using the product and others who do not, messages tailored to these two groups can be crafted and based on the profile of these physicians, the tablet PC can be programmed to pull up different educational and promotional material as part of CLM efforts. This process ensures that physician time is used as efficiently as possible.
In some cases, it's the physician's themselves who are driving change. A recent online survey conducted by Sermo and Publicis Selling Solutions Group revealed that doctors want more knowledgeable sales reps that are better educated and armed with clinical data.
A majority of those surveyed also said that they would welcome clinical health educators (who would work with the practice staff to improve patient outcomes) and customer service representatives (who would not sell to them, but provide samples and patient support materials).
Nine out of 10 of the respondents asked for “higher quality” sales representatives. In addition to better education and training, they wanted representatives who know the data and who use clinical studies as part of their discussions. They also asked for representatives with an in-depth knowledge that would go beyond the product, embracing the healthcare industry, the disease state, the competition and specifics about a physician's individual practice.
In the communications arena, physicians nationwide want more disease-state websites that are designed specifically for healthcare professionals. And while some pharmaceutical companies have cut back on industry-sponsored continuing medical education (CME), the majority of doctors surveyed would like to see more industry-sponsored CME activities.
E-detailing gaining ground
If CLM as a strategy represents an opportunity for pharma companies to leverage new technologies in order to better communicate with physicians, then online video detailing is fast becoming the preference of choice for doctors.
A recent study by Manhattan Research reported that close to 45,000 physicians had online video details with sales reps in 2007, and more than 300,000 have shown interest in interacting with sales or other company representatives online. These physicians also reported that, on average, they met with seven different representatives a month.
That comes as no surprise to Mark Gleason, SVP, corporate development, at Aptilon, a Montreal-based provider of the online detailing channel that is providing an alternative sales channel.
“More physicians are trained on the mindset that internet is a viable source of clinical information,” he explains. “Doctors have become very internet savvy and they go online searching for medical information at night, especially primary care physicians.”
Gleason says that new technology and new physician access channels has allowed the rep to rethink how they engage with the doctor. “Let's empower the rep in the field to have a number of ways of servicing that doctor.” Gleason says that the encounter may be face-to-face with e-mailed links to follow-up content and programs, it may include scheduling online details where the rep can make a presentation of high quality clinical data or they might link the physician to a “partner rep” in a call center if access is only available in the evening or weekends.
“The expanded options that a field rep or an eRep can provide suggests a ‘concierge-level' of service,” says Gleason. Reps can open web pages to a full set of services online sample ordering, forumulary information, links to archived presentations, etc. Essentially any service or educational content a brand would like to make available can be linked to the high-service eRep or field representative.
Dale Hagemeyer, research VP at Gartner Industry Advisory Services, says that CLM wouldn't even be happening without technology. “You'd be back to a paper-based system putting stuff up on an easel; it's not as engaging.” With CLM for example, the rep can hand a stylus to a practitioner and allow them to navigate, answer a question and look at the things they want. “It's being able to capture the data, compare the impact on prescribing behavior and say was there an impact?”
Hagemeyer noted that CLM fits neatly into the bigger picture that includes the changing dynamic of the rep/doc relationship and sales force cuts. “It segues into a multi-channel strategy,” he says. “Twenty years ago docs relied on reps for most everything. Those days are gone.”
Docs today, explains Hagemeyer, don't have the time or the inclination. “They have to gather their info about therapies from all these different sources,” he says. “We've been forcing reps on docs for so long and it's just not working any more now we are realizing that and cutting it back because other channels exist.” In the current multi-channel environment based on preferences, it's all about what the doctor wants. “They're driving now, rather than the pharma company pushing,” says Hagemeyer. “Pharma companies pushed in the past, now docs are pulling based on what they like.”
The new paradigm?
Is CLM here to stay? Ovation's Stickler thinks so. “Based on market research we have done with healthcare providers, the research suggests that over time this medium will become the primary platform for communicating scientific information,” he says.
Stickler noted that the signal the industry has received is that a combination of electronic media and limited printed materials such as reprints and a promotional leave behind are preferred to 100% electronic promotion. “The beauty of using this method is that we can change quickly.”
Barbara Ryan, an analyst with Deutsche Bank in New York, told MM&M that the adoption of CLM is a no brainer. “It's logical, that's what you should be doing.” Ryan adds, “It's more efficient and it's going to improve the quality of whatever effort they have.”
Sales force outlook
Sales force cuts will continue and industry insiders say that those cuts will most likely take place on a company-by-company basis.
Ryan told MM&M that companies are being forced to do more with less while at the same time finding ways to generate greater efficiencies. Meanwhile, some smaller firms and biotechs are adding sales force personnel while other companies, including Pfizer, are stepping-up their sales efforts in emerging markets.
“It's going to be a function of their portfolio,” laments Ryan. “If they are in the throes of launching new products, then clearly they are going to need incremental sales people, it just depends where they are in the product cycle.”
Who has the best sales force? Pfizer, Merck, GlaxoSmithKline, Novartis, AstraZeneca and Eli Lilly have once again maintained their top-tier positions as the companies cited by physicians as having effective sales forces, according to GfK Market Measures' 2008 SFE study. When it comes to rating the most effective sales forces, Pfizer, Merck, GSK, Novartis, AstraZeneca and Eli Lilly were physicians' top choices.
According to GfK, these rankings reflect some big drops (percentage changes) within each pharma company's respective figures in the past year. There were some notable drops within specific physician-specialties; for example, Pfizer saw significant drops within urologists who were surveyed, while Novartis saw a significant drop among cardiologists and dermatologists.
GfK noticed that in 2008, more than any year the study has been conducted, there was a shift toward “Don't Know” responses submitted by specialists—specifically rheumatologists, urologists and endocrinologists—which may account for the big drops, yet there were no shifts in top rankings from last year. GfK analysts attribute this to a particularly challenging year for sales forces including less differentiation, fewer new products and big layoffs in several company sales forces.