A Datamonitor In-Depth Analysis

Pharmaceutical Sales Forces Benchmarking sales force management by geographical market and product lifecyclePublished: Aug-03 Code: DMHC1904

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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

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Pharmaceutical Sales Forces: Benchmarking Sales Force Management by Geographical Market and Product Lifecycle

DMHC1904

tel: +44 20 7675 7014 fax: +44 20 7675 7016 hcinfo@da t amonito r .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 14top tier companies' investment in primary care promotion in the US and Europe from1998-2001. 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 detailingversus 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 benchmarkingROI model.

For more information...Eimear O'Brien, Director of Strategy Analysis

Achieve blockbuster revenues

Entering new market

Increase market penetration

Increase product’s profile in the face of competitors

Boost market share atthe 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 3 rd

generation products

Prod

uct s

ales

Pro

duct

t sal

es

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 reductionin size of about

50% Overall reductionin 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 expiry2 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 atthe 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...”

Source: Datamonitor Survey

Summary of ContentsDRIVERS AND TRENDSSales 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 RETURNSCompanies 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 LIFECYCLEEach 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 FRANCESales 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

DATASETSTable 1: Returns on promotional investment by top tier

pharmaceutical companies, 1998-2001Table 2: Johnson & Johnson's revenues by division, 2001-02Table 3: Revenue Potential Index scores per companyTable 4: Leading companies' portfolio composition*, 2001Table 5: Revenue and sales force data for participating top

tier companiesTable 6: Revenue and sales force data for participating middle

tier companiesTable 7: Revenue and sales force data for participating lower

tier companiesTable 8: Revenue and sales force data for the participating

and predominantly privately owned companiesTable 9: Bayer: sales force data in the US, Japan and Spain, 2003Table 10: Boehringer Ingelheim: sales force data in the US, Germany

and France, 2003Table 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...”

Table 12: Elan: sales force data in France and Spain, 2003Table 13: Fournier: sales force data in Spain and the UK, 2003Table 14: GlaxoSmithKline: sales force data in Japan and Italy, 2003Table 15: ICN: sales force data in Spain and the US, 2003Table 16: Novartis: sales force data in the US and Spain, 2003Table 17: Pfizer: sales force data in the US, Japan, Italy and Spain,

2003Table 18: UCB Pharma: sales force data in the US, Japan, Italy and

Spain, 2003Table 19: Most popular range of sales support technologies used in

seven geographical reports, 2003Table 20: Revenue and sales force data for seven

participating companiesTable 21: Range of technologies used by sales forces in Japan, 2003Table 22: Bayer's key prescription products in Japan, 2002Table 23: Sales of Daiichi's prescription pharmaceuticals in Japan,

March 2003Table 24: GlaxoSmithKline's CNS and respiratory franchises drove

global revenue growth, 2001-02Table 25: Sales of Kyowa Hakko's key drugs, 2001-02Table 26: Pfizer's cardiovascular and CNS franchises drove global

revenue growth, 2001-02Table 27: A breakdown of Sumitomo's ethical sales, March 2003Table 28: Yamanouchi's top selling drugs, March 2003Table 29: Revenues and sales force data of six

participating companiesTable 30: Range of technologies used by sales forces in the US, 2003Table 31: Bayer's prescription products currently sold in the US Table 32: Most of Bayer's best-selling drugs are facing declining

global sales, 2001-02Table 33: Global sales of Boehringer Ingelheim's top 10

pharmaceutical products, 2001-02Table 34: Sales of ICN's top 10 global pharmaceutical products, 2002Table 35: Novartis's cardiovascular and oncology franchises drove

global revenue growth, 2001-02Table 36: Pfizer's cardiovascular and CNS franchises drove global

revenue growth, 2001-02Table 37: Revenue and sales force data for seven

participating companiesTable 38: Range of technologies used by sales forces in the UK, 2003Table 39: Most of Schering-Plough's key franchises are experiencing

declining global sales, 2001-02Table 40: Revenue and sales force data of 11 participating companiesTable 41: Range of technologies used by sales forces in Spain, 2003Table 42: Most of Bayer's best-selling drugs are facing declining

global sales, 2001-02Table 43: Bristol-Myers Squibb's cardiovascular and cancer franchises

drove global revenue growth, 2001-02Table 44: Elan's CNS and anti-infectives franchises drove global

revenue growth, 2000-01*Table 45: Global sales of the leading branded fibrates, 2000-01Table 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 companiesTable 53: Range of technologies used by sales forces in Italy, 2003Table 54: Abiogen's diabetes and musculoskeletal franchises are

leading domestic revenue growth, 2000-03Table 55: GlaxoSmithKline's CNS and respiratory franchises drove

global revenue growth, 2001-02Table 56: Novo Nordisk's hemostasis management and diabetes care

franchises drove global revenue growth, 2001-02Table 57: Pfizer's cardiovascular and CNS franchises drove global

revenue growth, 2001-02Table 58: Revenue and sales force data of nine

participating companiesTable 59: Range of technologies used by sales forces in Germany,

2003Table 60: Aventis's oncology and diabetes franchises drove global

revenue growth, 2001-02Table 61: Global sales of Boehringer Ingelheim's top 10

pharmaceutical products, 2001-02Table 62: Revenue and sales force data for nine

participating companiesTable 63: Range of technologies used by sales forces in France,

2003Table 64: Allergan's entire marketed portfolio is experiencing double-

digit growth in sales, 2001-02Table 65: Aventis's revenues by division, 2001-02Table 66: Global sales of Boehringer Ingelheim's top 10

pharmaceutical products, 2001-02Table 67: Elan's CNS and anti-infectives franchises drove global

revenue growth, 2000-01*Table 68: Genzyme General's marketed biotherapeutics portfolio,

2 001-02Table 69: Solvay's cardiovascular and gastrointestinal franchises

drove global revenue growth, 2001-02Table 70: Total detailing spend, marketing spend and ethical sales,

1998-2001Table 71: Key metrics of the top 14 pharmaceutical companiesTable 72: Detailing, marketing, sales force and ethical revenue data

for the top 14 companiesTable 73: Detailing and marketing ROI data for the top 14 companiesTable 74: Ethical revenues per Revenue Potential Index score* Table 75: Datamonitor's promotional universeTable 76: Estimated data points and methodologyTable 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...”

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