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INDEX
Sr. No. Topics Page No.
1. Acknowledgment 3-3
2. Certificate 4-4
3. Synopsis 5-5
4. Objective 6-6
5. Indian Pharmaceutical Overview 7-12
6. Industry Profile 13-14
7. SWOT Analysis of Pharma Industry 15-19
8. Global Pharma Vs Indian Pharma 19-27
9. Challenges in Pharma Industry 28-29
10. Activities by SALES TEAM 30-31
11. Sales Force Effectiveness 32-40
12. Problem with Sales tool & Measurement 41-4713. Ways company Market to Doctor 48-53
14. Survey of Sales Force 54-54
15. Data analysis Of Sample Survey 55-61
16. Working & Challenges in Sales Force 62-73
17. Conclusion 74-7418. Annexure 75-76
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Acknowledgment
During the perseverance of this project I was supported by different
people, whose names if not mentioned would be inconsiderate on my
part.
I would like to thank with affection and appreciation and
acknowledge my indebt ness to Oriental Institute of Management,
(Vashi) for initiating in the preparation of a project on Brand
Management in Pharmaceutical Industry. The learning and
knowledge that I have gained in the process of preparation of this
project has been tremendous and I would like to thank Dr. D.R.
Kamraj for providing me with the opportunity to work on this project
and guiding me for the same.
I owe sincere gratitude towards each and everyone who have given a
helping hand in the completion of this project.
SOHAN KUMBHAR
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Certificate
I, D.R. Kamraj, hereby certify that Mr. Sohan K Kumbhar, studentof Oriental Institute Of Management, Vashi, Navi-Mumbai,enrolled in the course of MMS-II (Marketing), Mumbai University,
academic year 2006-2008, have completed his project Perceptionof Sales Force in Pharmaceutical Industry as per my guidelines.
Dr. D.R. Kamraj
.
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SYNOPSIS
For Sales & Marketing in pharmaceutical industry it is important
to have skilled sales force to promote the products because most ofdoctors prescribed quality product based on relationship with theMedical Representative.
For selling a product, relationships with doctors are moreimportant.
Samples are not so important for established brand.
For core doctors, MRs should meet twice or thrice in a month.
For repeat visit with doctors sales people should go always withdifferent promotional tools.
According to sales people visual aid must be change everyquarter.
Most of companies change visual aid twice in year.
Quality is more emphasized while promoting brand.
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OBJECTIVE
To Understand the sales force perception in PharmaceuticalIndustry.
How Medical Representative/ Marketing Executive do theImplementation of the strategies given by company inpharmaceutical Industry?
SWOT analysis of pharmaceutical industry.
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Indian Pharmaceutical Industry: An Overview
The Indian pharmaceutical industry is a success story providingemployment for millions and ensuring that essential drugs ataffordable prices are available to the vast population of this sub-
continent.
Richard Gerster
The Indian Pharmaceutical Industry today is in the front rank ofIndias science-based industries with wide ranging capabilities in thecomplex field of drug manufacture and technology. A highly organized
sector, the Indian Pharma Industry is estimated to be worth $ 4.5billion. It ranks very high in the third world, in terms of technology,quality and range of medicines manufactured. From simple headachepills to sophisticated antibiotics and complex cardiac compounds,almost every type of medicine is now made indigenously.
Playing a key role in promoting and sustaining development in the vitalfield of medicines, Indian Pharma Industry boasts of qualityproducers and many units approved by regulatory authorities in USAand UK. International companies associated with this sector havestimulated, assisted and spearheaded this dynamic development in thepast 53 years and helped to put India on the pharmaceutical map ofthe world.
The Indian Pharmaceutical sector is highly fragmented with more than20,000 registered units. It has expanded drastically in the last twodecades. The leading 250 pharmaceutical companies control 70% ofthe market with market leader holding nearly 7% of the market share.It is an extremely fragmented market with severe price competitionand government price control.
The pharmaceutical industry in India meets around 70% of thecountry's demand for bulk drugs, drug intermediates, pharmaceuticalformulations, chemicals, tablets, capsules, orals and injectables. Thereare about 250 large units and about 8000 Small Scale Units, whichform the core of the pharmaceutical industry in India (including 5Central Public Sector Units). These units produce the complete rangeof pharmaceutical formulations, i.e., medicines ready for consumptionby patients and about 350 bulk drugs, i.e., chemicals having
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therapeutic value and used for production of pharmaceuticalformulations.
Following the de-licensing of the pharmaceutical industry, industriallicensing for most of the drugs and pharmaceutical products has been
done away with. Manufacturers are free to produce any drug dulyapproved by the Drug Control Authority. Technologically strong andtotally self-reliant, the pharmaceutical industry in India has low costsof production, low R&D costs, innovative scientific manpower, strengthof national laboratories and an increasing balance of trade. ThePharmaceutical Industry, with its rich scientific talents and researchcapabilities, supported by Intellectual Property Protection regime iswell set to take on the international market.
Market TrendsThe industry has enormous growth potential. Factors listed belowdetermine the rising demand for pharmaceuticals.
The growing population of over of a billion
Increasing income
Demand for quality healthcare service
Changing lifestyle has led to change in disease patterns, and increaseddemand for new medicines to combat lifestyle related diseases.
India Pharmaceuticals and Healthcare Report Q1 2009
This India Pharmaceuticals and Healthcare Report provide
independent forecasts and competitive intelligence on India's
pharmaceuticals and healthcare industry.
India remains regarded as a moderately attractive proposition, as
illustrated by the fact that it once again holds an unchanged eighth
position in BMIs Q109 regional Business Environment Rankings forAsia Pacific. While the fast-growing population in India will represent
one of the main drivers of pharmaceutical growth in the coming years,
low per capita consumption and emphasis on generics hamper the
level of market development. Similarly, an excessive amount of red
tape,
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underdeveloped infrastructure and the deficient legal framework
remain barriers to investment, although the government is striving to
improve the regulatory environment, with the imminent creation of the
Department of Pharmaceuticals. Nevertheless, in December 2008,
India's drug price regulator decided to lower prices of 46 brands and toinclude 254 new medicine brands in the list of
Price-controlled drugs, despite an announced increase of prices of 31
medicine brands.
In the meantime, the domestic generics industry continues to expand,both locally and abroad, although it has not all been plain sailing. Inlate 2008, Indian Zydus Cadila a unit of Cadila Healthcare purchased Italy-based Etna Biotech from Dutch biotechnology firmCrucell, while Sun Pharm acquired 100% of the US-based narcotic
producer and importer Chattem Chemicals. On the otherhand, Lupin recently became the third drug maker to be accused ofsub-standard manufacturing by the US Food and Drug Administration(FDA), which will attract greater scrutiny on the sector as a result.Other Indian companies facing similar problems in the past includeRanbaxy Laboratories,Suns' US-based subsidiary, Caraco Pharmaceutical Laboratories, as
well as Wockhardt and Granules India.
The above developments will have an impact on Indian generics
exports. According to the recently released figures by news providerPharmabiz, the annual growth of India's pharmaceutical export sector
is down by more than half. Key reasons include increased competition
in the highly regulated markets of the US and Europe and the steady
appreciation of the rupee. Nevertheless, BMI believes that the
fundamentals of the sector are sound and we expect high double-digit
growth to be maintained over the medium term. A victory for Barack
Obama and the Democratic Party in the US general election in
November 2008 will increase generic substitution in the world's largest
pharmaceutical market, while the 2011 patent cliff provides yet thegreatest opportunity for Indian generics exports.
On the domestic front, generics are also winning, with the first generic
drugs store reportedly opened by the Department of Pharmaceuticals
at the end of November 2008, as part of an ambitious project to set up
such stores in each district of the country. The use of generics will be
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India's US$ 3.1 billion pharmaceutical industry is growing at the rate of
14 percent per year. It is one of the largest and most advanced among
the developing countries.
Over 20,000 registered pharmaceutical manufacturers exist in the
country. The domestic pharmaceuticals industry output is expected to
exceed Rs260 billion in the financial year 2002, which accounts for
merely 1.3% of the global pharmaceutical sector. Of this, bulk drugs
will account for Rs 54 bn (21%) and formulations, the remaining Rs
210 bn (79%). In financial year 2001, imports were Rs 20 bn while
exports were Rs87 bn.
STEPS TO STRENGTHEN THE INDUSTRY
Indian companies need to attain the right product-mix for sustained
future growth. Core competencies will play an important role in
determining the future of many Indian pharmaceutical companies in
the post product-patent regime after 2005. Indian companies, in an
effort to consolidate their position, will have to increasingly look at
merger and acquisition options of either companies or products. This
would help them to offset loss of new product options, improve their
R&D efforts and improve distribution to penetrate markets.
Research and development has always taken the back seat amongst
Indian pharmaceutical companies. In order to stay competitive in the
future, Indian companies will have to refocus and invest heavily in
R&D.
The Indian pharmaceutical industry also needs to take advantage of
the recent advances in biotechnology and information technology. The
future of the industry will be determined by how well it markets its
products to several regions and distributes risks, its forward and
backward integration capabilities, its R&D, its consolidation through
mergers and acquisitions, co-marketing and licensing agreements.
Industry Profile
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Industry Segmentation by Products
Pharmaceutical sales include:
ethical (prescribed) drugs, which can't be dispensed without a
physicians prescription; over-the-counter (OTC) medications, which are readily
available on drugstore shelves.
Ethical drugs account for about 60% of total industry sales, with
OTC products representing the balance.
The ethical sector can be further segmented into:
Brand-name products; Generic products.
Generics are less-expensive equivalents of brand-nameprescribed drugs, and may be produced and sold once the originaldrug's patent protection expires.
Industry Segmentation by Distribution
Three-quarters of industry sales consist of pharmaceuticals used in
outpatient settings, with the balance administered in hospitals, nursinghomes, and other inpatient facilities. About 70% of prescribed drugs is
distributed through wholesalers to hospitals, health maintenance
organizations (HMOs), and retail pharmacies. The remaining 30% is
sold directly by manufacturers to physicians, hospitals, retailers, and
others.
Industry Living Space
Demand
The demand for medicine is tied to the health of the populace, which is
relatively constant over the years. Drug pricing is also relatively
inelastic, due to the absence of alternate therapies for the most
prescribed drugs.
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Life cycle of products
The product cycle of nearly all prescribed drugs is fairly stable. After
the average 10- to 15-year period of discovery, development, testing,
and FDA review, a branded ethical drug has about 10 years of
commercial life.
Discovery
New drugs are discovered in scientific laboratories. The process is longand laborious, with the vast majority of attempts unsuccessful.
Bringing the drug to market
Before a drug can he brought to market, it must undergo years oftesting and receive government approval from the FDA. It takesseveral years of sales buildup in major markets in the U.S. and abroadbefore a drug reaches its full commercial potential. At that point, newcompetition of drugs similar in action may enter the market.
Going generic
Drug's patent expires, typically after fifteen years on the market.
Generic competition usually appears immediately after it, and pricesbegin to fall. Branded prescription drugs typically have about 10 yearsbefore generic competition erodes their profitability.
Going OTC
Companies sometimes switch a patent-expired product fromprescription-only status to over-the-counter (OTC) status to broadenits market and extend its economic life. Competition in the market of
OTC products is more straightforward. Margins on products switchedto OTC status are lower than those on the prescription products theyreplace, but popular consumer medications can have almost infiniteshelf lives.
SWOT Analysis Of Industry
Strengths
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Opportunities
When a drug maker launches a new compound that achieveswidespread acceptance in the marketplace, the economic rewards can
be very high. This is the primary reason for the industry's profitmargins.
Threats: FDA approval
The FDA requires manufacturers to perform extensive testing to provethat products are safe and effective before it will sanction commercialsale. All animal and human tests, which often last for years at the cost
of many millions of dollars, are conducted by the manufacturer.
The cycle for the development of a new drug is as follows:
Discovery (searching for innovative products is especiallychallenging in pharmaceuticals, because products come from thehighly complex fields ofmolecular biologyand biochemistry.); Preclinical(animal) testing( hundreds of compounds are testedbefore any are identified as promising enough to warrant humantesting);
Clinical (human) testing.
The clinical testing period on humans usually consists of three phases:
Phase I (small number of healthy people to test the drug's safety);
Phase II: (patients suffering from the disease or condition the drugis intended to treat);
Phase III: (large groups of ill patients to test drug's safety,effectiveness and optimal dosage).
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Fugure. Compound Success Rates by Stages of Development
Out of 20 drugs entering clinical testing, average 13 successfullycomplete phase I. Of those about nine finish phase II, but only onelikely pass trough the phase III. Only one of 20 will ultimately
approved for marketing.
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In 2007, the Indian pharmaceutical industry looks ahead at a colourfulhorizon, what with contract research and clinical trials businessestaking wing, and the new patent regime opening new avenues forplayers in the country.
Globally the Indian pharmaceutical industry ranks 4th in termsof volume (with an 8 per cent share in global sales), 13th in termsof value (with a share of 1 per cent in global sales) and produces 20-24 per cent of the worlds generic drugs (in terms of value). India isalso one of the top five active pharmaceutical ingredients (API)producers (with a share of about 6.5 per cent). The sector today is inthe front rank of Indias science-based industries with wide rangingcapabilities in the complex field of drug manufacturing and technology.
Industry Structure
The Indian pharmaceutical industry is estimated to be worth US$ 6billion, growing at over 13 per cent annually. Indianpharmaceutical companies now supply almost all the countrysdemand for formulations and nearly 70 per cent of demand for bulkdrugs.
Exports constitute nearly 40 per cent of the production withformulations contributing 55 per cent and bulk drugs 45 per cent. Theindustry ranks 17th in terms of export value of bulk actives and
dosage. It comprises large, medium and small-scale operators out ofwhich some 300 companies together account for nearly 90 per cent ofthe domestic market, while the rest is accounted for by a largenumber of small companies which total about 9000 units.
Growth
The domestic Indian pharmaceutical industry is likely to more thantriple to US$ 20 billion by 2015 from the current US$ 6 billion tobecome one of the top ten pharmaceutical markets in the next
decade, says a report prepared by global consultancy firm, McKinsey.Significantly, patented drugs are likely to see increased sales in thedomestic pharmaceutical market, growing from virtually nothing atpresent to about US$ 2 billion in seven years.
In fact, the absolute growth of US$ 14 billion will be next only to thegrowth potential of the US and China. Echoing similar sentiments,another report by Goldman Sachs predicts that India will be the
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fifth largest pharmaceutical market in the world by 2020, withsales of US$ 43 billion.
Important factors that are expected to make this reality are thedoubling of disposable incomes, increase in numbers of middle-classhouseholds, expansion of medical infrastructure, greater penetration
of health insurance and a gradual shift in disease profile and adoptionof patented products.
Consequently, a number of multinationals have entered the IndianPharmaceutical market. Already 15 of the 20 largest pharmaceuticalcompanies in the world have a presence in India. In fact, drugs andpharmaceuticals is the eighth largest FDI-attracting sectors in India.
CRAMS
India is emerging as the global hub for contract research andmanufacturing services (CRAMs) due to a combination of low cost andworld-class quality standards. The Indian CRAMS market which isvalued at US$ 895 million in 2006 (as against US$ 533 million)accounts for between 6-7 percent of the global CRAMS market andmany expect India will command at least 15 per cent of the market by2009-10. Research agency Frost & Sullivan estimates this segment toreach close to US$ 6.6 billion by 2013.
Contract research--including both drug discovery research and clinicalresearch--has been growing at a phenomenal rate. While clinical trialsrepresent 65 per cent of this market and new drug discovery makesup the remaining 35 per cent. Frost and Sullivan estimates outsourcedcontract research in India to reach US$ 2 billion by 2010. Similarly,according to a McKinsey report, the global clinical trial outsourcing toIndia in the pharmaceutical industry is estimated to be worth US$ 1.23billion by 2010.
Over 15 prominent contract research organizations (CROs) are nowoperating in the country which includes names such as Novartis,
Johnson & Johnson, Pliva, Astra Zeneca, Bristol-Myers Squibb andGlaxoSmithKline among others.
Contract manufacturing is another new opportunity for the Indianpharmaceutical industry. Already, India has the largest number of USFood and Drug Administration (US FDA)-approved plants outside theUS, with over 100 facilities. And now even small and medium scalepharmaceutical companies are setting up new and upgraded high-quality manufacturing plants to take part in this growing segment.
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About 40-50 new plants (which are in addition to the plants being setup by major Indian pharmaceutical companies) are likely to becommissioned by these companies in the next two years conforming tothe quality standards suggested by the US FDA and the UK Medicines
and Healthcare Regulatory Agency (MHRA), making India one of thelargest drug manufacturers in the world.
The small- and medium-scale companies, which are setting up newunits, include Bangalore-based Bal Pharma, Paras Pharma, VenusRemedies, Surya Organics and Chemicals, UnijulesLife Sciences,Centaur Pharma, Flamingo Pharma, Kemwell, Coral Labs amongothers.
The Boston Consulting Group estimates that the contractmanufacturing market for global companies in India would touch US$900 million by 2010.
India Advantage
India offers a huge cost advantage in the clinical trials domaincompared to Western countries. A multinational company moving R&Dto India could save as much as 30 to 50 per cent. For example, whilethe cost of hiring a chemist in the US is as high as US$ 250,000-300,000 per year, Indian discovery research outfits charge global
pharma companies around US$ 60,000 per chemist which is roughlyone fifth of what the pharma companies pay abroad.
Similarly, the comparative cost advantage in India can be seen fromthe fact that Indian companies can manufacture pharmaceuticals forless than half of what it costs in the US, conduct clinical trials at lessthan one tenth of US costs, and conduct research at less than oneeighth of what it costs in the US.
Generics
Indian pharmaceutical companies with their reverse-engineeringexpertise, abundant investment in research facilities and availability ofskilled manpower are favorably placed in the global generic market.
According to a report by global pharmaceutical market intelligencecompany, IMS Health, Indian generic manufacturers will grow by 14-15 per cent next year, to more than US$ 70 billion as drugs worth
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approximately US$ 20 billion in annual sales will face patent expiry in2008. In fact, with nearly US$ 80 billion worth of patent-protecteddrugs to go off patent (including 30 of the best selling US patent-protected drugs) by 2012, Indian generic manufacturers arepositioning themselves to offer generic versions of these drugs.
Already, Indian drug companies account for over 25 per cent of thetotal generic drug applications made to the FDA of US, which accountsfor over half of the US$ 60 billion market. Also, India has over 100 USFDA-approved plants, the highest number outside the US. Indiancompanies are also able to build their US generic pipeline with Indianfilings of around 408 products.
Global Company Sales Summary
Rank Company Sales Market Share Sales Growth 2006 $(m) %
1 Pfizer 45,0838.61.8
2 GlaxoSmithKline 36,9477.18.9
3 sanofi-aventis 35,6056.84.9
4 Novartis 28,8685.517.9
5 Roche 26,5605.121.4
6 AstraZeneca 25,7414.910.5
7 Johnson & Johnson 23,2674.44.2
8 Merck & Co 22,6364.32.8
9 Wyeth 15,6833.09.8
10 Eli Lilly 14,8162.87.5
www.p-d-r.com/ranking/ranking.html
Top 10 ethical drugs ranked by sales in 2006, Global
1 Lipitor Pfizer/Astellas 13,736 5.7
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4 S o u r c e : I M S K n ow l e d g e L in k : M A T S e p t e m b e r 2 0 0 5
* P h a r m a c y M a r k e t O n l y * * H o s p i t a l M a r k e t O n l y% G r o w t h C o n s t a n t $
+ 7 %
F r a n c e$ 3 0 . 7 B i l
1 %I t a l y
$ 1 9 . 6 B i l
+ 7 %G e r m a n y$ 3 1 . 6 B i l
+ 8 %S p a i n ( * )
$ 1 5 . 1 B i l
+ 0 %U K
$ 2 0 .0 B i lM a j o r E u r o p e
$ 1 6 0B i l
+ 5 %J a p a n
$ 6 0 . 8 B i l
+ 1 1 %
M e x i c o *
$ 7 .2 B i l
+ 8 %C a n a d a
$ 1 3 . 1 B i l
+ 2 4 %
C h i n a* *
$ 8 .9 B i l
+ 7 %U S
$ 2 4 9 . 2 B i l
1 0 K e y M a r k e t s$ 4 5 6 . 2 B i l
I n d i a i s r a n k e d 1 5 t h i n w o r l d p h a r m a c e u t i c a l m a r
s ta n d i n g a t n u m b e r 4 i n v o l u m e t e r m s
+ 9 %I n d i a *
$ 5 . 2B nr e t a i l( $ 6 . 7B i lt o t a l )
STANDING OF INDIAN PHARMACEUTICAL MARKET IN THEWORLD, 2006.
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Pharmaceutical Manufacturing Companies
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Indian Pharmaceutical Sector:Challenges and Opportunities under the WTO Regime
The global pharma industry today is faced with two challenges:
1. To develop and utilize scientific knowledge to derive new drugsand
2. To do it at an affordable cost.
The Indian pharma industry is well-positioned to address these twin
challenges because of the vast availability of talented and skilledscientific manpower. The Rs.28,000 crore Indian pharma industry has
been operating under a new world order from January 1 2005. From
that date, in compliance with the prior commitment given under the
WTO agreement the country has switched over to the product patent
regime from the process patent regime that was in existence hitherto.
The main challenges facing the sector are the following.
Growth in the domestic formulations market is slowing down.
Domestic bulk drugs industry is facing intense competition due tocheap imports.
Price wars between regional and local pharma companies aredriving down prices, exerting pressure on margins.
MNC pharma companies are getting more aggressive atprotecting their patents and defending their market share afterpatent expiry.
There has been considerable confusion in the grant of EMR,(Exclusive Marketing Rights) due to lack of transparency in theprocess.
The huge domestic market (worth Rs.2,14,000 crore in 2002) with
a billion plus population presents a tremendous opportunity to the
Indian pharma industry though the growth is still in single digits.
A roadmap for growth can be the following.
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Activities perform by Sales Management TeamIn pharmaceutical industry
Sales Management
Plan sales objectives-in market & to market, and monitor the sales
to achieve pre-set sales targets. Implement strategies, identify
new business opportunities & expand the existing market. Look-
after sales and marketing along with several aspect of product
management
Sales promotion
Designs & implement marketing activities such as medical
educational programs, seminars and conferences for the doctor's ,
camps, doctor's meets/ conferences for enhancing brand visibility/
coverage & reach. Conceptualize and implement sale promotion
activities such as selection/ Targeting the key opinion leaders and
organizing CME'S as a part of market development and brand
building effort.
Conduct Market Research and Campaign to build the brands.
Relationship Management
Build and strengthen relationship with key accounts, medical
fraternity, opinion leaders there by ensuring high customer
satisfaction by providing with complete product support i.e. CRM
(Customer Relationship Management) activities.
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Dealer Management
Identifying and networking with financially strong and reliable
dealers, resulting in deeper market penetration and reach.
Evaluating performance & monitoring distributor sales and
marketing activities.
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Sales Force Effectiveness (SFE)
ABSTRACT
With the ever increasing pressure to ensure maximum return on
investment, sales force effectiveness (SFE) is becoming a high
priority area in the global pharmaceutical industry. Sales force
represents the largest spend in sales and marketing and yet study
after study shows that the returns gained from this spend is not
particularly strong and one recent IMS report found that pharma
sales force effectiveness declined by 23% in the recent period of
2004 to 2005. Better metrics must be used to measure both the
effectiveness and financial impact of SFE for this very significant
budget. The startling discovery that this comprehensive report
uncovers is that the very metrics currently being used to assess
sales force effectiveness are in fact themselves aiding its decline.
Traditional pharmaceutical organizations are rigorously tracking and
managing sales activity, but still falling short. Data emerging from
the research concludes that current metrics are more focused on
efficiencies than effectiveness and do so to their own detriment.
This report dissects current SFE metrics and their limitation for the
pharmaceutical industry in the United States, Europe and Japan.
The report then discusses appropriate metrics to solve these
problems and goes on to demonstrate implementation methods andissues.
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Sales force effectiveness is a difficult concept to measure, but doing
so can push pharmaceutical companies past todays hurdles and
into increased productivity and sales.
Background - The Scale of the Sales Force Effectiveness
Problem
Most pharmaceutical company teams already rigorously track and
manage sales activity. Unfortunately, despite much measurement,
the sales force effectiveness problem remains. Could this be due to
the fact that the currently used metrics are inappropriate,
nsufficient and often counterproductive? Many companies
accurately diagnose that the problem is sales force effectiveness
but miss the solution, due to using the wrong metrics. But how can
a pharmaceutical company measure the effectiveness of its sales
team?
To truly grasp the problem, we look at current metrics used, alongwith their limitations.
Sales Force Size and Share of Voice
Until recently, the pharmaceutical industry was typified by its ever
growing sales staff, hiring new sales reps at a rate that outstripped
the rate of new physicians (which has remained at a constant rate
of modest increase) and far outstripping the rate of new drugsreleased on to the market (which has fallen dramatically over the
last decade). This strategy continued even in the face of falling
profits by pharmaceutical companies.
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Pharmaceutical companies have ramped up their innovation
and time to market. In the 1970s, the period without
competition for a certain therapy lasted an average of seven
years. Today, this time without competition only lasts 0.1
years.
Increases in targeting technologies in the United States have
allowed reps to call upon those physicians with strong market
volume potential. But everyone has the same targeting data.
These physicians are receiving so many detail calls that they
are saturated and unable to find time for quality calls with thereps. Doctors report feeling inundated by sales force (a by-
product of the sales force arms race) resulting in the average
time spent with physicians decreasing. Of more concern: the
physicians do not see this decrease in time with reps as a
problem.
Access to physicians is decreasing. Sales people are not ableto count on even scheduled appointments to result in an
actual call any more. Many physicians have closed their doors
to sales reps completely and turn to eDetailing, peer-to-peer
interaction and journals for information. Statistics suggest
that for every 100 sales reps, only 20 meet with the
physicians. Additionally, 78% of phone calls to physicians last
two minutes or less. Most calls result in simply a 30-seconddetail and a sample drop.
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Related to this, the number of personal details received by
office-based US physicians in the US declined by 13% in
200513 following seven years of increases. IMS reported that
this was seen across the majority of the major pharmaceutical
companies and was not entirely due to physicians closing
their doors. In this number, 27% were influenced by
blockbusters going off patent, and 22% were due to
withdrawals of Vioxx and Bextra and the relative shortage of
new launches in the primary care space. Two thirds of new
launches were in the specialist areas, meaning there was
limited need for additional representatives. Different therapy
areas also were found to decrease in detailing volume, with
33% decline in detailing volume for the erectile dysfunction
category, 22% decline in the proton pump inhibitor category,
and 9% decline in the lipid lowering agents category.
Although these changes account for some of the decline in
numbers of details, others came from the fact that some
companies (including Pfizer and Wyeth) altered their salesstructures and removed mirroring from their field forces.
On top of this, physician attitudes around pharmaceutical
sales force are also changing. Where previously they may
have welcomed new data and discussion with sales reps, now
fewer than 40% of physicians feel the pharmaceutical industry
is trustworthy. Physicians actively provide barriers to salesreps.
In 2003, the number of doctors reporting intentional limited
access for sales reps totalled 60%15. Only 43 percent of reps
get past the receptionist at any given sales visit.
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Unfortunately there are a number of problems with this sort
of metric:
Focus on call frequency could encourage inappropriate or non-
optimal behaviours in sales staff. Irrelevant calls to non-
target physicians or non-prescribing staff, while doing nothing
to further the companys goals and sales, can still be counted.
Since career success is built on meeting company standards,
sales reps are encouraged to focus their behaviours towards
metrics16. But measures counting the number of calls to a
physician or the number of minutes spent with a physician are
encouraging quantity over quality. Sales reps may do well
when it comes to bonus or yearly review time, but the
company is pushed down the path of decreasing productivity.
By focusing on sales call quantity, reps are encouraged to
make as many calls a day as they can to meet their targets.The focus becomes accessibility of physicians rather than
their value as a target. Accessibility is indeed an issue, as the
industry becomes more competitive and physicians limit or
block access to sales reps17. But contact should be about
more than access. Consider this: IMS reported that decile
analyses in Europe often find little difference in the call levels
achieved by high-decile doctors and low-decile doctors. Thismeans reps will spend time with doctors who are easy to see,
rather than those who will actually provide value and
generate sales. The result is the calls do not seem effective
and yet the calls per day target is being met or exceeded.
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Focusing on sales call quantitynecessarily means less focus
on sales call quality. A sales call merely to enquire over the
physicians golf handicap, or the state of health of the
physicians loved-ones, is clearly not going to result in a
product sale. Likewise, sales call frequency measures favour
irrelevant contacts, such as physicians who might be easy to
talk to but do not actually have many patients who fit the
profile of the drug being marketed.
By focusing on sales call numbers, the company implies that
the only sales tool worth considering is the sales call. When it
comes down to actual sales, this is often not the primary
method of success. In this highly competitive environment, a
physician might be faced with a veritable barrage of requests
for just moments of their time. While good working
relationships between the sales rep and customer are vital,
much can be gained by adequate back-ups to the sales call,such as call centres and websites. Thus, actual sales of a drug
might not necessarily be directly related to the amount of
calls made.
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The Problem With Sales Tools
The Problem with Sales Tools
Pharmaceutical marketers spend a lot of time and money planning
and creating messages, sales aids for use in the sales call,
technological tools to assist the sales force (including CRM), and
training for salespeople. Unfortunately, for many of these
categories, its quite difficult to measure return on investment when
using the majority of measurement tools available.
However, tools to help promote sales are a necessity for sales
forces. Consider the International current state of sales
forces:
The American Marketing Association reports that up to 90%
of what marketing creates for sales support goes unused in
the field. This is backed up by our analysis from literally
thousand of pharmaceutical brands field force activities.
ASTD journal reported a study demonstrating that
salespeople forget 85% of content and skills within four
weeks of training.
B-to-B Online reported results of a survey in which 70% of
marketers give themselves a D or F for the quality of
sales support.
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It also helps analyse what messages and what rep behaviours have
positive financial impact, and how these behaviours and messages
should be time-allocated in a sales call. This tool collects vast
quantities of data from physicians and then validates this data
against prescribing to uncover real, rather than perceived,
influencers. Then powerful analytics are applied that help sales
managers identify what is needed and how to change for maximum
sales growth. This type of analytics is critical to ensuring that sales
force efforts actually increase sales and market share, and
demonstrating sales force return on investment. By limiting metrics
to those that measure only call volume, calls per day and market
share, companies are limiting the provable results and return they
will achieve with their sales force.
Sales Force Resource Optimisation
Real sales force optimisation will only happen when companies
successfully integrate efficiencies and effectiveness to provide
an approach that improves strategic planning, as well as sales
forces productivity and measurable financial return on individual
activities. To really succeed there needs to be more focus on
ensuring the right.
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" Pharmaceutical companies don't look for one standard profile in
their sales forces. Generally, companies require sales reps to have
at least a bachelor's degree, and some prefer MBAs . Employers
don't necessarily require degrees in areas such as chemistry or
biology , but reps must be willing to learn -- and be able to master
-- science. "An aptitude in science is a prerequisite," says Nahman,
a former pharmacist. "If you don't like science, this job will be a
living hell."
Some companies weigh previous marketing or healthcare -
industry experience heavily, although clinical skills alone won't get
you hired. "The most important qualifications are people skills, such
as tact and diplomacy," Nahman explains. "Science can be learned,
but people skills can't be learned."
Ways Pharmaceutical Companies Market to
Doctor
How Drugs Are Sold to Doctor
Even when it was illegal for pharmaceutical companies to advertise
treatments for erectile dysfunction to the public, they had
enormous amounts of cash invested in marketing programs. Your
medical providers - doctors, nurse practitioners, and others -- are
literally bombarded by drug
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8. Payments for consulting or giving lectures - This used to be fairly
egregious, with doctors getting a substantial amount of their
incomes from these sorts of kickbacks -- for they were kickbacks.
Today, new pharmaceutical organizations like PhRMA have
instituted guidelines that their members voluntarily follow,
preventing these abuses from happening.
Most payments for these things now are for time, and provide
about the same or les income to the doctor that he or she would
gain from regular medical practice.
However, there is still a real danger. Most pharmaceutical
companies hire their very well-paid scientists and researchers from
three different sectors: research institutions, the FDA (a whole
nother conflict of interest story), or private practice. This means
doctors who build up a reputation for consulting and lecturing can
increase the chances a pharmaceutical company will hire them.
How much is that worth? When I worked at Pfizer in southeastern
Connecticut, there was one researcher who flew his private plane to
work from his farm in southern New Hampshire, at least three days
a week. You have to make pretty good money to do that.
9. Enrolling their patients in clinical trials - this is one of the most
altruistic marketing methods. Especially with cancer drugs,pharmaceutical companies are hungry for clinical trial subjects;
doctors are hungry for new treatments for their terminal patients
that might buy time or even save their lives. It very much works to
the advantage of both for doctors to remain very aware of what the
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pharmaceutical companies are doing in this area.
10. Direct marketing of all these types to medical school and
nursing professors -- the people who train your medical providers -
All nine of the above methods, when used to market to medical
school professors, are very effective in training new doctors to use
the drugs marketed. You trust your teachers to get it right. If the
pharmaceutical salesperson can convince them of the efficacy of a
drug, they have not just gained a single not-that-lucrative
customer, but rather dozens of customers in his or her students,
who will go on to private and public practice everywhere.
Yes, doctors are human. Many claim that these little - and big perks
do not influence them or their practice, that though they may get
some very nice gifts these things don't encourage them to prescribe
more medications.
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Survey of Sales force in Pharmaceutical
Industry
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SAMPLE SIZE
Sr.No.
Name Company Designation Speciality
1 yogesh Magar Cadila F. O. Card/diab2 Omprakash Chaturvedi Dr. Reddy's SBU Diabetic
3 Nitin Gaikwad Lupin MR Neuro
4 Shilpa Patange Novartis MR General
5 Nagesh Mishra Novartis MR General
6 S. M Kangane Novartis MR General
7 Omprakash zydus Area manager gynae
8 Suraj Soni Emcure MR Card/diab
9 Rajesh Singh Novartis MR General10 Bhaskar Naik Alkem MR Bergen
11 Ranjit Sigma MR General
12 Prabhat ICPA MR General
13 Prafful Systopic MR General
14 Ashish Tiwari Meridian MR General
15 Pravin DRL SBU General
16 Nilesh UCB MR General
17 Sachin Glenmark Area manager General
18 Parag J Emcure MR General
19 Rajesh Ajanta MR opthal
20 Manish Tab. India MR General
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t
To ta l number o f c o re Doc to r as
20 -2
10%
25-3
45%
31-3
10%
36-4
5%
50-6
20%
100-10
10%
20-24
25 -30
31 -35
36 -40
50 -60
100 -10
Total number of core Doctor as per company
20-24
0%
25-30
35%
31-35
10%36-40
25%
50-60
20%
100-101
10%
20-24
25-30
31-35
36-40
50-60
100-101
In both the graphs we can analyse that both the categories have the consent
at the core Doctors requirement. And majority of them suggest to have 25-30
core doctors in list
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Parameter 5. No of Retailer
No of retailers/day as per M
4
40%
5
20%
6
20%
8
0%
10
20%
12
0%
4
5
6
8
10
12
No of retailers/day as per Company
4
40%
5
30%
6
0%
8
10%
10
10%
12
10%
4
5
6
8
10
12
As visiting number of retailers is also field activity. So it also
have some conflict in the match.Majority of the MRs want to have less number of retailers/dayto visit, as desired by the company
No ofretailer Company MR
4 8 8
5 6 4
6 0 4
8 2 0
10 2 4
12 2 0
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Parameter. 7 Important Activities According to MRs for makinggood relation or to make sales
ActivityMostIMP IMP
AverageIMP
LessIMP
Visit 12 6 2 0samples 0 4 6 8
Gifts 2 2 4 6CME/Sponseship 7 6 2
other 3 1 1 0
12
23
6
4
2
7
12
6
4
6
10
8
6
2
0
2
4
6
8
10
12
14
Most IMP
IMP
Average IMP
Less IMP
Most IMP 12 2 3
IMP 6 4 2 7 1
Average IMP 2 6 4 6 1
Less IMP 0 8 6 2
Vis it samples GiftsCME/Sp
onseshiother
This parameter of this survey is has some additional importance,
because in this crux of the total sales and marketing can be seen
In this most of the MRs feels that for making good relationship with
Doctors Regular Visits are of Utmost important.
Here OTHER means Doctor meet, Strategy Implementation,
communication, CRM/ WIIFM etc
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Education is the norm in this field; learning about a companys
product line is like taking an advanced course in pharmacology
(which many do take during their initial years in the industry).
They have to be familiar with data, statistics, and issues in the
health community to be able to communicate successfully with
businesspeople and doctors. Although this job has some aspects
that are unquestionably grueling-one sales rep said he put in 184
days on the road in 1994-many love it, and love is the only term
that accurately describes their zeal, dedication, and willingness to
make sacrifices for their job.
Paying Your Dues
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Pharmaceutical sales representatives with a science background
have an advantage in this profession, in terms of both their
credibility and their ability to educate themselves about product
lines. A college degree is standard for this job, with many
employers looking favorably on graduate work. Useful courses
include biology, chemistry, biochemistry, biophysics, organic
chemistry, English, public speaking, finance, and negotiation
techniques. Professional education is the norm for all sales
representatives, both on their own products and on other
companies product lines. The ability to read a scientific study and
examine its assumptions is critical to a PSRs success. Licensing is
available through professional organizations, but it is not required
to advance to managerial positions.
Associated Careers
Pharmaceutical sales representatives go into sales positions in
other professions-as systems marketers or service sales
representatives, for example-where their selling skills are valued,but where scientific knowledge is less important. Some PSRs are
willing to give up the scientific element of their job in order to go
into a profession where it is easier to advance and easier to
maintain a satisfying family life.
Challenges for Pharmaceutical Sales ForcesPharmaceutical sales forces can overcome their challenges by
learning how companies from other sectors have dealt with similar
challenges.
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Sales force, the main communication channel of the
pharmaceutical industry, faces many challenges: lower perceived
product differentiation, great heterogeneity in the needs of
customers and the value of customers to the company, pressure to
find more efficient communication channels, restricted physician
access, tighter regulatory constraints, the growing power of non-
physician customers, and adversarial relationships with payers and
other non-physician customers.
Are these challenges unique to the pharmaceutical industry?
Companies in other sectors have successfully addressed challenges
similar to what the pharmaceutical industry faces today.
Changing the sales force structure to compensate for the
loss of product differentiation
Many primary care physicians are visited by different
representatives from the same company. While this makes it more
difficult to obtain a holistic understanding of physician needs andrespond to them, it allows a sharp promotional focus on individual
products. However, in many primary care categories competing
brands are perceived to be only weakly differentiated, and the
promotional focus on products has become less effective.
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The sales force is a very effective communication channel, allowing
face-to-face, interactive communication of a considerable amount
of information. But, considering the high cost of a sales
representative's call, do all physicians have a similar need for the
extensive information that can be provided in a face-to-face visit?
Similar to the pharmaceutical industry, the traditional stock market
investment firms such as Merrill Lynch and Morgan Stanley
employed highly-paid professionals who provided customers with
sophisticated advice, often based on proprietary research.
However, the growing availability of stock market information in a
variety of media enabled motivated investors to form their own
preferences about where to invest. Targeting these "self-directed"
investors, who preferred to manage their investments on their
own, Charles Schwab's low-price "discount brokerage" firm
eliminated the high-cost information services and concentrated on
making stock market transactions easy.
After having successfully penetrated the "self-directed" investorsegment, Charles Schwab defined two other segments-"validators,"
who also wanted to manage their own portfolios but required some
consultation, and "delegators," who wanted someone else to
manage their portfolio for them-and designed communication
channels that responded to the different needs of these segments.
Finding the most efficient communication channel for eachfunction
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Matching customer value and the cost of communication
channels
Physicians differ in their value to pharmaceutical companies.
Indicators of value include actual and potential revenue
generation, influence (e.g. opinion leadership) and knowledge (e.g.
advisory board members selected for their knowledge of
physicians' needs). Communication channels differ in their cost,
e.g. face-to-face sales representative visits are more expensive
than other channels such as the telephone, fax, and e-mail. The
greater a customer's value, the greater can be the cost of the
communication channel.
For example, Dell in the U.S. assigned its customers to nine
different segments varying in their value to Dell, and provided a
channel mix that matched each segment's value. Customers in the
highest-value segment were connected to Dell through all
conceivable channels including dedicated account teams
comprising field and telephone sales personnel, program managersand technical support, and customer-specific websites with
extensive functionality. Individual consumers, on the other
extreme, could reach Dell only via telephone and Dell's website.
Segments in between these two extremes were served by a
channel mix in which the availability of costly channels such as
field salespeople increased with the value of the segment.
Creating new channels to increase customer access
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Discussions between senior managers at both companies led to the
recognition that their adversarial relationship destroyed
opportunities for mutually beneficial value creation. This paved the
way for a collaborative partnership, in which the two companies
saw themselves as members of a common team with the following
mission: "The mission of the Wal-Mart/P&G Business team is to
achieve the long-term business objectives of both companies by
building a total system partnership that leads our respective
companies and industries to better serve our mutual customer-the
consumer." P&G assigned 300 full-time staff to its global Wal-Mart
team, more than 200 close to Wal-Mart's headquarters alone.
Sharing a great deal of information, the team and Wal-Mart
cooperated to develop new profitable products and services,
allocate resources to in-market products and services and optimise
the supply chain. The partnership has served both companies well
not only in their relationship with one another but also in making
each of them a more valuable partner in other relationships. In an
annual survey, in which manufacturers rate the performance ofretailers and retailers rate manufacturers, both P&G and Wal-Mart
have held the number one spot for many years in a row.
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Annexure
Name: _______________ Specialty:
Designation_______________ Companys name:
Companysrequirement
As per yoursuggestion
No of doctors in list
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No of core doctors
Frequency of core
doctors visit
Call average
No. of retailers/day
Number ofliteraturesdistribution /month
The most important thing/activity/strategy for making good relation
with customer, according to you is (e.g. Visits, cme, sponsorship etc.)
1.
2.
3.
4.
5.
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8/8/2019 Sohan Project 7921
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The best marketing activity/strategy for launching a new product (e.g.
Symposia, gifts)
1.
2.
3.
The thing which you dont like or you would like to change it
1.
2.
3.
The best marketing strategy according to you:
( )