50% drop in UK sales positions reveals fast-changing industry
Newly released figures show the number of sales representatives taking the ABPI exam dropped 50% in 2006; clear proof that the size and composition of UK pharma's salesforces are changing fast.
The ABPI has informed Pharmafocus that applicants for the exam, which new reps must take within the first two years in the job, fell to just 600 last year.
The industry body says the numbers have been in decline for four years, but that 2006 saw the greatest fall.
The statistics reveal more starkly than ever before the changing nature of the UK industry, which is following a global trend away from large, primary-care focused salesforces to smaller, specialist teams.
The sector is also seeking new cost savings through mergers and acquisitions, with the aim of regaining the favour of stockmarket investors.
Pharma's biggest companies are all preparing for massive restructuring and change, but with each approaching the challenges in their own way.
Pfizer is set to cut 10,000 jobs worldwide, while Sanofi-Aventis and Bristol-Myers Squibb are tipped to merge. A union of the two Plavix co-marketers would create a company to rival Pfizer's size - coming just as Pfizer is seeking to slim down and lose some of its behemoth status.
AstraZeneca has announced plans to cut 3,000 jobs in its supply chain operations, while even the currently top-performing company Roche has decided the time is now right to re-organise its R&D operations.
Only Novartis has plans for out-and-out expansion, as it prepares to bring several new mass-market products to market over the next two years.
Much of the recent contraction in the number of UK pharma reps can be attributed to the merger of a handful of mid-size pharma companies, including Merck and Serono and Bayer and Schering.
Other sure signs of change are the lean times in the once-booming field of contract sales, with mergers and one company, AmDel, going bust.
Pfizer's massive streamlining plans will include a 20% reduction in the European salesforce, with the 250 confirmed redundancies in the UK mainly from the frontline.
The company has been renowned in the industry for the size and strength of its salesforce, and has until now been the only company to maintain regional offices to support its rep teams. It has now confirmed that it will close its regional offices in Edinburgh, Birmingham, Manchester and Watford, which were first opened in 1998.
Pfizer UK seems to have escaped lightly compared to its sister operations in France and Germany, where thousands of jobs will be lost in manufacturing and research respectively. The company's long-standing R&D site in Sandwich, Kent, looks to have a secure future within the company as one of two global research and development hubs.
Nev Skelton, head of salesforce effectiveness at IMS health consultancy believes the pharma industry had the potential to come to grips with the situation over the next five years, but he warned: "If the industry does not grab the bull by the horns now, it is likely to find itself in deep trouble."
In terms of salesforces, Skelton said: "It's not simply about downsizing salesforces but right-sizing representatives by re-skilling and deployment."
He said fewer, but better-trained and more experienced, reps could come from middle management. This means brand sales leaders could find themselves going out in the field and tailoring their sales and marketing techniques to suit the various individual stakeholders.
But, people working in the pharma industry who remain after cutbacks, may find the changes improve their daily working life.
Among the many initiatives announced by Pfizer are plans to reduce bureaucracy by cutting at least three or four management layers, and eliminating many unnecessary committees and cross-functional teams.
Pharmafocus's annual industry survey has consistently revealed that internal inertia and bureaucracy are major bugbears for many workers.
"By reducing middle management and increasing spans of control, we're getting leaders closer to colleagues and customers and giving colleagues a clearer line of sight to those aspects of the business for which they are accountable," explained Pfizer's chief executive Jeffrey Kindler.
"As a result, our managers will delegate, empower and focus on developing colleagues more than ever, and our colleagues will grow and take on more responsibility than ever," he said.
Another positive outcome from the changes could be pharma's better alignment with its customers needs. One PCT prescribing advisor from the north of England believes Pfizer's move is astute.
He commented: "Pfizer has undertaken a very intelligent approach to what they are doing.
"In part, the cutbacks may be due to the failure of their late-stage cholesterol drug Torcetrapib which has cost them a great amount of money and they want to reassure their shareholders - but I do not think it is quite as simple as that."
He said he believed all UK pharma companies are now re-structuring their frontline field force, especially in the light of practice-based commissioning.
An example of this would be a six-GP practice. In the past, sales reps would target all six GPs - now, he said, companies were beginning to target only the one GP with specialist knowledge of a particular illness or disease.