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This document analyzes pharmaceutical sales force management strategies. It finds that returns on promotional investment have declined 24% from 1998-2001, as companies focus on maintaining large sales forces without improving effectiveness. It recommends that companies rethink detailing strategies to halt this decline. The analysis also finds that sales force size and structure should evolve throughout a product's lifecycle to maximize revenue potential. It provides sales force benchmarks for seven countries/regions and recommendations for optimizing sales force size, structure, and effectiveness across different markets and stages of the product lifecycle.
Bench datamonitor
- 1. A Datamonitor In-Depth Analysis Pharmaceutical Sales Forces Benchmarking sales force management by geographical market and product lifecycle Published: Aug-03 Code: DMHC1904 95% of Datamonitor clients use our research to help improve their company’s decision making Source: Datamonitor customer research Why buy this analysis? • Identify new promotional strategies that could halt the decline in ROI from physicians detailing • Benchmark the size and structure of your company's sales force against competitors in different disease markets and countries • Determine the key metrics needed to link sales force productivity with the sales performance of a product • Understand the different sizing and structuring strategies a company applies with its sales force in different markets • Learn from the industry's leaders when optimizing promotional effectiveness across different therapy areas and geographical markets www.dat amonitor.com/healthcare
- 2. Pharmaceutical Sales Forces: Benchmarking Sales Force Management by Geographical Market and Product Lifecycle DMHC1904 tel: +44 20 7675 7014 fax: +44 20 7675 7016 email: hcinfo@datamonitor.com Introduction Scope and coverage Pharmaceutical Sales Forces: Benchmarking Sales Force Management by Geographical Market and Product Lifecycle provides an in-depth profile of 56 sales forces' size and structure from 41 companies operating in Japan, US, UK, Spain, Italy, Germany and France. Breakdown includes rep allocation by target audience, therapy area/indication and region, which is correlated with the marketed portfolio defining key areas of promotional focus. Benchmarking analysis also reviews sales support technologies. Optimizing sales force size and structure throughout the product lifecycle is discussed with use of a proprietary benchmarking ROI model. The study also benchmarks 14 top tier companies' investment in primary care promotion in the US and Europe from 1998-2001. Investment strategies and ROI in detailing versus marketing are compared with support of a proprietary revenue potential index. • Accurate 2003 sales force structure data from 56 sales forces operating in Japan, US, UK, Spain, Italy, Germany and France • Evaluate optimal sales force sizing and structuring strategies with use of a proprietary benchmarking ROI model • Benchmark 14 top tier pharmaceutical companies' investment in primary care promotion in the US, UK, Spain, Italy, Germany and France from 1998- 2001 • Compare and contrast investment strategies and ROI in face-to-face detailing versus marketing cost with support of a proprietary revenue potential index Research methodology Pharmaceutical Sales Forces reflects primary research with 56 senior sales executives. Benchmark analysis of 14 top tier companies' promotional investment is from CAM Group base data supported by a proprietary revenue potential index. Optimal sales force strategies are discussed with use of a proprietary benchmarking ROI model. For more information... Eimear O'Brien, Director of Strategy Analysis
- 3. Achieve blockbuster revenues Entering new market Increase market penetration Increase product’s profile in the face of competitors Boost market share at the expense of older competitors Acquire market share lost by rival product withdrawal Compete effectively with the launch of newer competitors Boost market share at the expense of older competitors Switch customers to follow -up product Promote Phase IV studies, line extensions or multiple indications Launching 2 nd or 3rd generation products Productsales Producttsales Key findings and highlights • Companies are not maximizing their returns from detailing spend despite the continual focus to maintain high sales force numbers. • Each stage of a product's lifecycle presents a different set of objectives to a pharmaceutical marketer when intending to maximize revenue potential. Sales force size and structure has to evolve to fully realize this sales potential but without driving promotional costs up and reducing associated profit margins. • Sales force size and structure has to be linked directly with product performance. • The regional focus of a sales force has to be driven by physicians' prescribing behavior. Determining the sales potential of the product defines which areas would benefit greatly from sales force presence. Average change in sales force size throughout a drug's lifecycle Key factors that drive the level of detailing investment to be increased throughout a product's lifecycle Total sales force size assigned to product *Data is based on primary research in 2003 Achieve blockbuster revenues Entering new market Compete effectively with the launch of newer competitors Boost market share at at launch Overall reduction in size of about 50% Overall reduction in size of about 80% Increase market penetration the expense of older competitors 100% 70-35% 40-0% No sales force capacity used Launch Growth Maturitty Nearlly offff pattent Pattent expiry 0% Launch Growth Maturity Nearly off patent Patent expiry 2 6 10 14 Years on tttttthe market Increase product’s profile in the face of competitors Switch customers to follow -up product 2 6 10 14 Years on the market Boost market share at the expense of older competitors Acquire market share lost by rival product withdrawal Promote Phase IV studies, line extensions or multiple indications Launching 2 nd or 3rd generation products Source: Datamonitor DATAMONITOR Source: Datamonitor DATAMONITOR Structure, chapter by chapter • Companies need to re-think current detailing strategies to halt declining returns: recommendations to increase the effectiveness of detailing strategies • Optimizing sales force size and structure throughout the product lifecycle: benchmark analysis of sales force management in different geographical markets and by product • Japanese sales force structures: detailed breakdown of 7 domestic and international sales forces operating in Japan • US sales force structures: detailed breakdown of 6 sales forces operating in the US • UK sales force structures: detailed breakdown of 7 sales forces operating in the UK • Spanish sales force structures: detailed breakdown of 11 sales forces operating in Spain • Italian sales force structures: detailed breakdown of 6 sales forces operating in Italy • German sales force structures: detailed breakdown of 9 sales forces operating in Germany • French sales force structures: detailed breakdown of 9 sales forces operating in France “...Returns on promotional investment for the top 14 companies have declined by an average 24 per cent between 1998 and 2001...”
- 4. Source: Datamonitor Survey Summary of Contents DRIVERS AND TRENDS Sales force expansion has not generated the expected returns but companies are under pressure to match the promotional spend of competitors to maintain their sales force 'share of voice,' which refers to the number of reps detailing a particular drug. Datamonitor defines the key problem in promotional investment through benchmark analysis and provides a solution to improve sales force effectiveness. • How can face-to-face detailing with physicians be increased? • What metrics do I need to better assess the sales force's productivity? • What stages of the product lifecycle should changes in sales force size be made? • How are different sales forces sized and structured in seven regional markets? • How does the same company organize its sales force in different markets? COMPANIES NEED TO RE-THINK CURRENT DETAILING STRATEGIES TO HALT DECLINING RETURNS Companies are not maximizing their returns from detailing spend despite the continual focus to maintain high sales force numbers. Furthermore, the size of the sales force had a negligible impact on returns. A large sales force produced similar returns to a smaller sales force indicating that economies of scale did not factor into achieving high revenue margins from increased detailing investment. Datamonitor challenges the industry's focus on maintaining high face- to-face detailing spend and instead recommends the level of investment change in favor of more effective promotional strategies. • Benchmark analysis of current promotional strategies of the top 14 pharmaceutical companies • Apply a proprietary revenue potential index to identify optimal promotional effectiveness • Determine if high investment in either detailing or marketing boosts ethical revenues • Identifying key tactics to increase promotional effectiveness • Benefit from recommendations to optimize sales force effectiveness OPTIMZING SALES FORCE SIZE AND STRUCTURE THROUGHOUT THE PRODUCT LIFECYCLE Each stage of a product's lifecycle presents a different set of objectives to a pharmaceutical marketer when intending to maximize revenue potential. Consequently, sales force size and structure have to evolve to ensure the product's full sales potential is captured but without driving promotional costs up and reducing associated profit margins. Datamonitor suggests that companies need to understand the true sales performance of their product by determining which sectors of the customer segment have highest sales potential. • Compare and contrast the size and structure of sales forces from top, middle and lower tier companies • Benchmark current sizing and structuring strategies applied by the same company to its sales force in different markets • Use proprietary analysis to define which metrics provide an overview of sales force performance • Identify the key changes needed in either sales force size or structure throughout the product lifecycle • Provide recommendations of best practice in sizing and structuring sales forces SALES FORCE STRUCTURES: JAPAN, US, UK, SPAIN, ITALY, GERMANY AND FRANCE Sales force size and structure varies in each market and is mainly driven by the type of target audience sought, size of the marketed portfolio and regional coverage. Datamonitor provides a detailed breakdown of 56 sales forces from 41 companies operating in seven geographical markets. • Access accurate 2003 sales force data and opinions of senior sales executives • Identify the key promotional focus of each sales force • Understand the rationale for either expanding or reducing a particular sales force • Compare and contrast the size and structure of sales forces from top, middle and lower tier companies within the same market communicating product value • To implement effective reimbursement strategies, pharmaceutical companies must adopt an organizational structure that enables coordination across multiple business functions while accounting for global variation in reimbursement policy APPENDIX • Glossary of sales force terms • Benchmark analysis of leading pharmaceutical companies • Regional maps • Methodology for use of the CAM Group data • Datamonitor's promotional universe • Datamonitor's revenue potential index DATASETS Table 1: Returns on promotional investment by top tier pharmaceutical companies, 1998-2001 Table 2: Johnson & Johnson's revenues by division, 2001-02 Table 3: Revenue Potential Index scores per company Table 4: Leading companies' portfolio composition*, 2001 Table 5: Revenue and sales force data for participating top tier companies Table 6: Revenue and sales force data for participating middle tier companies Table 7: Revenue and sales force data for participating lower tier companies Table 8: Revenue and sales force data for the participating and predominantly privately owned companies Table 9: Bayer: sales force data in the US, Japan and Spain, 2003 Table 10: Boehringer Ingelheim: sales force data in the US, Germany and France, 2003 Table 11: Chugai Pharma: sales force data in Germany and France, 2003 “...The ROI from physician detailing is declining and continual sales force expansion is a major contributor to this outcome...”
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Table 12: Elan: sales force data in France and Spain, 2003 Table 13: Fournier: sales force data in Spain and the UK, 2003 Table 14: GlaxoSmithKline: sales force data in Japan and Italy, 2003 Table 15: ICN: sales force data in Spain and the US, 2003 Table 16: Novartis: sales force data in the US and Spain, 2003 Table 17: Pfizer: sales force data in the US, Japan, Italy and Spain, 2003 Table 18: UCB Pharma: sales force data in the US, Japan, Italy and Spain, 2003 Table 19: Most popular range of sales support technologies used in seven geographical reports, 2003 Table 20: Revenue and sales force data for seven participating companies Table 21: Range of technologies used by sales forces in Japan, 2003 Table 22: Bayer's key prescription products in Japan, 2002 Table 23: Sales of Daiichi's prescription pharmaceuticals in Japan, March 2003 Table 24: GlaxoSmithKline's CNS and respiratory franchises drove global revenue growth, 2001-02 Table 25: Sales of Kyowa Hakko's key drugs, 2001-02 Table 26: Pfizer's cardiovascular and CNS franchises drove global revenue growth, 2001-02 Table 27: A breakdown of Sumitomo's ethical sales, March 2003 Table 28: Yamanouchi's top selling drugs, March 2003 Table 29: Revenues and sales force data of six participating companies Table 30: Range of technologies used by sales forces in the US, 2003 Table 31: Bayer's prescription products currently sold in the US Table 32: Most of Bayer's best-selling drugs are facing declining global sales, 2001-02 Table 33: Global sales of Boehringer Ingelheim's top 10 pharmaceutical products, 2001-02 Table 34: Sales of ICN's top 10 global pharmaceutical products, 2002 Table 35: Novartis's cardiovascular and oncology franchises drove global revenue growth, 2001-02 Table 36: Pfizer's cardiovascular and CNS franchises drove global revenue growth, 2001-02 Table 37: Revenue and sales force data for seven participating companies Table 38: Range of technologies used by sales forces in the UK, 2003 Table 39: Most of Schering-Plough's key franchises are experiencing declining global sales, 2001-02 Table 40: Revenue and sales force data of 11 participating companies Table 41: Range of technologies used by sales forces in Spain, 2003 Table 42: Most of Bayer's best-selling drugs are facing declining global sales, 2001-02 Table 43: Bristol-Myers Squibb's cardiovascular and cancer franchises drove global revenue growth, 2001-02 Table 44: Elan's CNS and anti-infectives franchises drove global revenue growth, 2000-01* Table 45: Global sales of the leading branded fibrates, 2000-01 Table 46: Sales of ICN's top 10 global pharmaceutical products, 2002 Table 47: Novartis's cardiovascular and oncology franchises drove global revenue growth, 2001-02 Table 48: Pfizer's cardiovascular and CNS franchises drove global revenue growth, 2001-02 Table 49: Products promoted by Pfizer reps targeting either hospitals or therapy area specialists in Spain, 2003 Table 50: Roche's oncology franchise drives global revenue growth, 2001-02 Table 51: Allergic rhinitis and anti-epilepsy products drove UCB Pharma's global revenues, 2001-02 Table 52: Revenue and sales force data of six participating companies Table 53: Range of technologies used by sales forces in Italy, 2003 Table 54: Abiogen's diabetes and musculoskeletal franchises are leading domestic revenue growth, 2000-03 Table 55: GlaxoSmithKline's CNS and respiratory franchises drove global revenue growth, 2001-02 Table 56: Novo Nordisk's hemostasis management and diabetes care franchises drove global revenue growth, 2001-02 Table 57: Pfizer's cardiovascular and CNS franchises drove global revenue growth, 2001-02 Table 58: Revenue and sales force data of nine participating companies Table 59: Range of technologies used by sales forces in Germany, 2003 Table 60: Aventis's oncology and diabetes franchises drove global revenue growth, 2001-02 Table 61: Global sales of Boehringer Ingelheim's top 10 pharmaceutical products, 2001-02 Table 62: Revenue and sales force data for nine participating companies Table 63: Range of technologies used by sales forces in France, 2003 Table 64: Allergan's entire marketed portfolio is experiencing double- digit growth in sales, 2001-02 Table 65: Aventis's revenues by division, 2001-02 Table 66: Global sales of Boehringer Ingelheim's top 10 pharmaceutical products, 2001-02 Table 67: Elan's CNS and anti-infectives franchises drove global revenue growth, 2000-01* Table 68: Genzyme General's marketed biotherapeutics portfolio, 2 001-02 Table 69: Solvay's cardiovascular and gastrointestinal franchises drove global revenue growth, 2001-02 Table 70: Total detailing spend, marketing spend and ethical sales, 1998-2001 Table 71: Key metrics of the top 14 pharmaceutical companies Table 72: Detailing, marketing, sales force and ethical revenue data for the top 14 companies Table 73: Detailing and marketing ROI data for the top 14 companies Table 74: Ethical revenues per Revenue Potential Index score* Table 75: Datamonitor's promotional universe Table 76: Estimated data points and methodology Table 77: Revenue Potential Index metrics and ranking system “...Face-to-face detailing time can only be increased through the provision of high value data to physicians...”
- 6. Source: Datamonitor Customer Research Datamonitor: Your total information solution Datamonitor is a premium business information company helping 5,000 of the world's leading companies across the Automotive, Consumer Markets, Energy, Financial Services, Healthcare and Technology sectors. Our products and services are specifically designed to support our clients’ key business processes - from corporate strategy to competitive intelligence. We provide an independent and trustworthy source of data, analysis and forecasts to improve these processes and ultimately, to help grow your business. Corporate Strategy & Business Planning Product Development & Commercialization Targeting & Influencing the Market Market & Competitive Intelligence Quality Data Expert Analysis Future Forecasts Make more effective strategic and business decisions Accelerate delivery of commercial success Assess and influence your commercial and market environment Maintain or obtain critical competitive advantage HELPING TO GROW YOUR BUSINESS No-one speaks louder than our clients 3M Abbott Accenture Ajinomoto Alcon Labs Allergan Almirall Alpha-Beta Technologies Amgen Amrad Angelini Acraf Asta Medica AstraZeneca AT Kearney Aventis Baxter Bayer Beaufour Ipsen Biochemie Boehringer Ingelheim Boots Bristol-Myers Squibb British Biotech Byk Gulden Cantab Caremark International Chiesi Chiron Chugai CMC Co Daiichi Dainippon Deutsche Morgan Grenfell Eisai Elan Eli Lilly Esteve Flamel Fournier Fujisawa Gehe Gist Brocades GlaxoSmithKline IBM Immuno AG Johnson & Johnson Jouveinal LEK Lipha Lundbeck Merck KGaA Merck & Co Novartis Novo Nordisk Nycomed Amersham Otsuka Pfizer Pharmachemie Pharmacia Pierre Fabre Pliva Procter & Gamble Ranbaxy Recordati Roche Sankyo Sanofi-Synthélabo Schering AG Schering-Plough Schwarz Serono Shire Pharmaceuticals Solvay Takeda Tanabe TAP Pharmaceutical Teva UCB Uriach Wyeth 89% of our clients use Datamonitor research to develop competitive intelligence
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