In order to understand the future of pharmaceutical sales, we must understand where we came from. When I started in this business eleven years ago, I would stop short of saying that it was the wild wild west, but it certainly was a lot different than what it is today. When it comes to coverage, all of my medications were covered on straight Medicaid (back then it was not Managed Medicaid), there were so many representatives in offices that there was usually a two or three rep wait before you could see the physician, you were allowed one on one dinners with physicians (which quickly changed), the utilization of dry goods was widespread previous to new regulations by the Federal Government, and so much more. Times….they have changed!!
So what are some of the trends that we are seeing in the industry?
- Hospital Systems are buying up private practices: In my eleven years in the industry, I am seeing this more and more. Why is this appealing to the physician or group of physicians that are in private practice? For one, they no longer have to worry about the cost of doing business. Utilities and supplies are now paid for by the larger hospital organization. Secondly, physicians are usually put on salary in this scenario and with the uncertain economic climate we have seen in recent times, this potentially appeals to the older physician who is looking to ride off into the sunset.But what does this mean for the everyday Territory or Specialty Representative? With this conglomerate type situation, these private office which were once wide open in terms of access to representatives, now adopts the rules and regulations of the hospital system. Many times it is unfavorable to representative who is no longer granted access to physician that he/she had gained a relationship with over time.In essence there is a hospital board that simply sits in a room and dictates the rep access. When they stipulate systemwide “no rep access” rules, in essence what they are saying is, “we know everything about medications….no amount of innovation matters in the world of pharmaceuticals….we know it all and do not need you”. It is ignorance in full display and frankly shameful…but nonetheless the future of pharmaceutical sales. It also unfortunately leads to widespread layoffs.
- Pharmaceutical Companies are Consolidating to achieve deeper product categories: The days of the blockbuster medication are largely behind us. That is not to say that there isn’t a diamond in the rough waiting to be discovered and exactly what the world needs at the right time, but for the most part, companies are buying up little companies that have products that can compliment their current portfolio. The goal is to own a disease category and be considered experts in that disease category.This has led to layoffs simply because when larger companies take over smaller companies and there is redundancies with sales forces, it makes no sense to the bottom line to keep everyone. I am a capitalist through and through, but even I must admit that the corporate invisible hand can be cruel at times to the low man on the totem pole!
- Companies are increasingly less afraid to utilize or experiment with outside or contract sales forces: In my opinion there is less risk involved in utilizing the services of a contract sales force. As the parent company, you have the ability to contract with another company for a limited amount of time. If you like the results, you stipulate in the contract that you want the ability to take on that contract salesforce full-time as official employees. If you do not like the results, you have the ability to cut ties and move on. From the perspective of the contract sales company you make a ton of money in a short period of time and have to ability to create new models for the future of pharmaceuticals. Everybody wins!!
- Technology will play an increasing role in Pharmaceutical Sales: When I first began my journey in eleven years ago into the world of pharmaceutical sales, we were given an archaic device to capture signatures with. These devices broke down often requiring us to return to an office to recapture a lost signature. Now, if you do not have an iPad that has all of your visual aid in electronic form, you are behind the times. When I speak to those who started before me, the previous generation, they tell me how they had to stop on the side of the road to use pay phones for communication. I do not even believe there are many pay phones left at this point. Technology has moved quick and I expect it to move even quicker in the next ten years. I cannot say for certain, but my belief is that software will dictate new “hot” areas for sales and if you’re not in one of those hot areas, perhaps because access is low, you may be left behind. Technology growth has been largely new devices and fancy visual aids. Expect software and smart technology to start to assist in understanding where companies need to add more manpower and less to get the best return on investment.
It will be interesting to see where it all goes in the world of pharmaceutical sales. Hold onto your hats people!!