Take this pill and shove it!
Drug sales representatives say they are increasingly disillusioned amid signs of industry cutbacks and tougher government regulations.
ATLANTIC CITY, N.J. (CNNMoney.com) -- Big Pharma, already reeling from mounting competition and tightening government regulations, now has another problem to deal with: an oversupply of sales reps, many of whom are fed up with what they describe as an increasingly restrictive work environment, according to drug industry officials.
"We're looking at what we consider to be a crisis situation in retaining our top talent," said Doug Willner of the drug company MedImmune (Charts). "We've got a lot of people looking for a less constrictive place in which to sell."
The problems are twofold, according to panelists at iiBig, an annual pharmaceutical sales and marketing conference taking place this week in Atlantic City, N.J.
For one thing, the drug industry is changing the way it sells drugs to doctors in response to a government crackdown on financial ties between Big Pharma and doctors. At the same time, it's becoming increasingly harder to sell drugs given how many competing medications are on the market.
The old method of saturating individual doctor's offices with multiple reps from one company is becoming less popular as the billion-dollar blockbusters they once promoted with relative ease are losing their patents--and having to compete with lower-cost generics.
As a result, sales teams are paying a hefty price. Pfizer (Charts), the world's biggest drug company, announced in January plans to lay off 10,000 workers, including thousands of sales reps. The downsizing came one month after the company ceased trials on the anti-cholesterol drug torcetrapib, once considered a potential blockbuster.
While Pfizer was the first drug giant to ax a major portion of its sales force, it's probably not the last. Some industry insiders predict that it's only a matter of time before similar cutbacks extend across the industry.
Too many drug reps
The common practice among Big Pharma has been to flood doctors with armies of sales reps, but now that strategy seems to have backfired.
Blake Boland, vice president of sales for the drug company Santarus (Charts), said the industry's motto was: "Have more reps, get more 'scrips," but lately it sounds more like, "More reps lead to less access."
Doctors seem to be getting fed up with the reps, said Andrew Brana from the sales research firm TNS. Fifty-one percent of doctors responding to a survey complained about "over-aggressive sales practices," said Brana, while 87 percent of drug companies say they're taking a "smarter" approach towards wooing physicians, primarily by trying to understand what medications specific doctors actually need.
Inviting physicians to a round of golf used to be par for the course, but doctors now want reps to provide them with the latest data from drug tests, said Willner of MedImmune. This data are often used by drug companies to seek Food and Drug Administration approval for additional uses of the medication. Doctors want this data because it might show other treatments they can use for their patients.
It is illegal for sales reps to promote "off-label" uses of a drug not yet approved by the FDA and Willner is concerned that providing test data could be seen as violating that prohibition.
Another recent change, said Willner, is that reps are expected to have a strong command of insurance reimbursement practices specific to the areas where they work. (Medical insurance often differs from state to state.) Also, some doctors want the reps to provide them with monitoring systems to track patients' progress after they starting taking new drugs.
Some of these changes stem from the FDA's ramped up scrutiny of the drug industry and its ties to doctors.
On March 21, the agency tightened its restrictions on medical experts serving on its advisory panels that suggest whether or not drugs should be approved. Advisors are not permitted to serve on panels if their financial interests in the drug industry (such as stock holdings) exceed $50,000.