For years, I’ve wondered when the tipping point would come. The pharmaceutical sales model is under increasing pressure, from managed care mandates, from regulation, from public and political backlash, from decreased access and selling time, and finally, from healthcare professionals kissing off the whole approach.
The system is broken and everyone knows it. When you have 90,000 sales reps out chasing a limited number of doctors, with the average rep getting (maybe) about 8- 10 minutes (total) of face time with physicians each day, you have an unsustainable business model. The layoffs are already beginning to occur within Big Pharma. Pharma Sales will be forced to change; the question is, into what form? And what will make the change occur?
It’s painful to change huge legacy systems. And the pharmaceutical industry sales model is just that. In its early days, the approach of sending out sales people to interact with doctors was undoubtedly effective. And it is certainly true that no product can ever gain its place in market without some form of selling. But now, throwing more resources at an old model that has decreasing effectiveness doesn’t look like the way to go. A lot of people, and systems, are deeply invested in the approach – Impactiviti, in fact, focuses on effective sales training. But that should not stop us from asking the inevitable – what will the future bring?
I’ve thought long and hard about this and must admit that I can’t yet see a clear answer. I would welcome some commentary and dialogue on this issue, however. Let me throw out one concept, for the sake of starting discussion, and let’s engage in some brainstorming together.
Here is one model I could see emerging, initiated and driven by the marketplace and some entrepreneurial creativity:
Let’s say a large institution of some sort (HMO, multi-hospital or multi-practice group, etc.) decides to take its stand and Just Say No to pharma sales reps. The genuine value purportedly offered by these sales reps is ongoing education (esp. new information), and drug samples.
Does delivery of samples, and gathering of a signature, require a highly paid, expensively trained representative? To ask the question is to answer it.
So, that leaves us with educational and informational needs.
Now, when does a physician need new information? To over-simplify a bit, there are two main educational needs – regular “background” information on areas of specialization (new treatments, new advances, best practices, etc.) and just-in-time information for specific cases (Patient C is taking drug x for diabetes and drug y for hypertension – what should I be considering – or disqualifying – as a potential treatment for asthma in this case?)
So, an organization is set up (probably a private organization, helped initially by a major group or academic hospital) to pro-actively and efficiently deal with these needs. Instead of sales reps showing up with a frequency and on occasions that don’t map to true needs, a group of specialists is employed (or contracted) by the organization to serve as an educational and clinical resource for physicians. Let’s call this a Physician Education Group (PEG). These specialists – roughly equivalent, in education and practice, to Medical Science Liaisons currently deployed by pharma companies – are focused on therapeutic areas, and instead of being beholden to one company’s products, are instead committed to educating the healthcare professional population on the best use of multiple products.
These educational efforts can be on the “background” level (e.g., scheduling quarterly sessions to meet with individuals and groups and discuss new treatments, new drug interaction information, “black box” warnings, just-released studies, etc.), with an objective presentation of information, since the specialists are employed by the PEG, not the drug companies. But one potentially valuable service is to have these specialists serve as advisors for specific cases – a call-center could receive inquiries from physicians and route the call to a therapeutic specialist, who can provide on-the-spot, up-to-date information about specific treatments. Having a searchable database of drug information available, and the tools that most physicians simply would not be able to access in their busy practices, would make these resources quite valuable – with much less need to worry about biased or incomplete information.
Of course, physicians can also access much of the education and information they need via conferences, the Internet, and other vehicles of communication. It can be argued that the forces of information “disintermediation” will ultimately make the role of a dedicated sales representative obsolete. However, that may not be the case for non-biased specialists whose sole job is to remain current with clinical information and serve as trusted advisors to healthcare professionals. As experts independent of the pharmaceutical companies, these educators could potentially discuss off-label applications freely, and have much more productive discussions than can the currently “shackled” sales reps.
From a business perspective, it could also make sense for an independent company to set up this type of approach as a service business, contracting with healthcare organizations to serve as the clearinghouse for updated drug information and on-demand education. I’d be quite surprised if someone doesn’t run with that concept in the near future…all it would take is the critical mass of a large provider organization to decide that it will make the break with the past, and move in a new direction.
To make it work, mechanisms would need to be in place to ensure objectivity on the part of the medical educators. There is also the key question of funding – who pays for all this? One way to go is to require any drug company whose product is going to be at all discussed as a treatment to pay (x) dollars per product annually, to cover the cost of employing these experts, and having them know the product well enough to discuss it. Pay-to-play, as it were. If the potential audience of healthcare professionals were large enough, and other forms of access to that pool severely limited, would it be worthwhile for every pharma company to participate? That’s an open question.
– a step toward ending the expensive and unwinnable sales rep “arms race”
– movement toward greater transparency in the promotion of drugs
– creation of an environment where truly advantageous and superior medicines “win” on clinical merit
– less reason to fault doctors and drug companies for questionable prescribing practices
– better clinical decision making based on sound clinical advice
– waiting rooms with patients instead of sales reps
– ultimately, potential for positive change in the cost of medicines, as inefficient and costly marketing practices are cut back
– is such a structure a sustainable business model? Will it have enough field and industry support?
– will doctors be motivated to use such a service?
– is the doctor-rep-drug company relationship dynamic truly dispensable, or is that unrealistic?
– what new forms will “selling” take, since it is inevitable that ANY business must grow utilization of its products in order to thrive?
– could this model co-exist with a classic selling model – a dynamic marketplace made up of access/no-access physicians? (this seems to be happening already)
– what about samples?
Freely admitted, the above concept is quite simplified, and any number of details could be (should be) different in the outworking. But something will change. Certain modus operandi are good and useful for a season – when conditions change, the model will be forced (kicking and screaming) to change as well. For how much longer is the current model sustainable?
What do you think? Feel free to click “Comment” above and share your thoughts.
(For more on the topic, Are Pharma Sales Reps Necessary?, with a lot of back-and-forth, some extracts from Cafe Pharma, and a bunch of comments, see this posting on John Mack’s blog).