Product Type: Market Research Report
Published by: Datamonitor
Published: November 2006
Product Code: R313-18651Description Introduction
The environment in which pharmaceutical companies promote their products has become increasingly tough over recent years as a number of trends and factors drive changes. As the effects of shrinking pipelines and rising R&D costs impact companies, they are under increasing pressure to deliver greater productivity from their sales forces.
Scope- Overview of the key trends changing the dynamics of promoting drugs
- Analysis of the key strategies companies can use to improve the effectiveness of sales forces
- Discussion of eight best-practice case studies across the US and European markets
Highlights
The increasing regulation of pharmaceutical marketing and promotion is set to continue over the next few years, driven both by authorities seeking to eradicate malpractice and by the pharmaceutical companies themselves seeking to rebuild the industry's damaged reputation.
The emerging influence of new prescribers, such as nurses and pharmacists, and other stakeholders such as formulary advisers and payer bodies, is broadening the scope of sales force strategies.
Continuing and more effective use of segmentation and targeting will allow companies to improve the effectiveness of sales forces, and so drive sales growth, without resorting to the traditional method of increasing the number of sales representatives.
Reasons to Purchase- Understand why the emphasis on sales force size in the pharmaceutical industry may finally be changing
- Assess the key strategies that may help improve sales force effectiveness
- Identify the opportunities to improve promotion through targeting emerging stakeholders
Table of Contents - About the Strategic Intelligence Team
- CHAPTER 1 EXECUTIVE SUMMARY
- Scope of the report
- Format of the report
- Latest developments
- Executive summary
- CHAPTER 2 CHANGING DYNAMICS OF PROMOTING DRUGS
- Promoting branded prescription drugs has become more difficult
- Branded drugs are facing a greater competitive threat from generics
- Countries have been adopting measures to increase generic penetration
- Generic drugs are posing a greater indirect competitive threat
- Secondary care detailing is set to become more competitive
- The industry's poor reputation is damaging promotional efforts
- The public's perception of the industry has worsened
- A series of negative events have driven the industry's reputation down
- The pharmaceutical industry is trying to win back physician and consumer confidence
- Companies are increasing the transparency of their activities
- Companies are using sales forces to improve their reputation through comprehensive marketing codes
- The industry continues to be plagued by sales and marketing malpractices
- Independent authorities and organizations are taking their own steps to improve the standard of promotional activities
- US: FDA is reviewing the use of DTC advertising
- US: Stanford Univeristy Medical Center bans physicians accepting gifts
- UK: The government is attempting to clamp down on promotional malpractices
- France: New Charter restricts the number of times sales reps can visit physicians
- Detailing is becoming more complex
- A multi-channeled marketing campaign is important
- e-marketing is a valuable new marketing channel
- Continuing medical education (CME)
- The network of prescribing decision makers and influencers is becoming more complicated
- Prescribers - nurses are permitted to prescribe in the US and UK
- Prescribers - UK adopts revolutionary changes to allow pharmacists to prescribe
- Key purchasing groups - tightening of budgets increases payers' control and influence over prescribing
- Consumers - influence has stabilized
- Other influencers - growing influence of HTA bodies
- CHAPTER 3 OPTIMIZING SALES FORCE EFFECTIVENESS
- Introduction
- The traditional sales force model is no longer effective
- Companies need to integrate sales and marketing functions better
- Synergies offer additional value
- Poor communication and misaligned objectives have driven the two departments to work in silos
- CRM systems can faciliate communication between sales and marketing departments
- Optimizing the size and structure of sales forces
- The use of contract sales forces can provide valuable flexibility
- Companies can use contract sales forces tactically or strategically
- The risks and benefits of contract sales forces
- The size of sales forces need to be reduced
- There are four key factors driving the reduction in sales representatives
- Huge cuts in sales forces have yet to be seen across the industry
- The structure of sales forces needs to be tailored to the customer
- Multinational companies need to adopt a holistic approach to sales force effectiveness
- The structure of national sales forces are often aligned by the boundaries of health authorities and organizations
- Mirrored sales forces are not the most cost-effective approach
- Companies should base the structure of sales force on customer groups
- Productivity can be improved by increasing the number of products sales representatives detail
- A more customer-orientated sales approach required
- Account-based selling is set to grow
- Case study: Takeda radically restructures UK sales force to become patient-focused
- Case study: Eli Lilly is restructuring its US sales operations to become more customer-focused
- Case study: Eli Lilly's UK affiliate adopts an account management approach for its customers in the NHS
- Is total solution-selling the answer?
- Companies are becoming more involved in disease management programs
- The ROI of disease management programs is questionable in some circumstances
- The role of sales representatives is changing to improve quality of interactions
- Companies are becoming increasingly dependent on effective segmentation and targeting of customers
- Rogers' 'Diffusions of Innovation' and Moore's 'Crossing the Chasm' theories
- Segmentation is highly complex in practice
- Companies need to use segmentation analysis for targeting sales and marketing efforts
- The key to sales force compliance is buy-in
- BIBLIOGRAPHY
- References
- Conference Literature
- Publications, online articles and news stories
- Other Sources
- Articles
- List of Tables
- Table 1: The characteristics of customers
- List of Figures
- Figure 1: The public perception of the pharmaceutical industry is, overall, not favorable
- Figure 2: Physicians are subject to a number of prescribing influences, 2005
- Figure 3: There are four main customer segments that influence prescribing decisions, 2006
- Figure 4: S,G&A spend has a high correlation to sales, 2004
- Figure 5: While an effective promotional strategy used to be based on three elements, the right channel has also emerged as an important element
- Figure 6: Key risks and benefits of using contract sales forces
- Figure 7: R&D expenditure has increased substantially, however, NME approvals by the FDA have not kept pace, 1990-2005
- Figure 8: AstraZeneca has mirrored territory structures in the US, 2005
- Figure 9: Structure of Lilly's Business-to-Business Team providing healthcare services to the NHS in the UK
- Figure 10: Lilly has a dedicated section on its UK website outlining the services it offers to the NHS
- Figure 11: Rogers' Innovator theory of customer segmentation
- Figure 12: A fraction of GPs account for the vast majority of prescriptions
- Figure 13: High potential customers should be the main target of promotional efforts
- Figure 14: Average change in sales force size throughout a drug's lifecycle
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