A Face in the Crowd Carrying the Bag with “Pat” One top 10 pharmaceutical company and the – everything from no-access physician offices to developing that elusive one-on-one relationship. An estimated 85,000 sales reps are now in the field, according to a new study by pharmaceutical intelligence firm Cutting Edge Information, and top pharmaceutical companies plan to increase sales headcounts by an average 20% in the next 18 months to 24 months. The industry average for field force budgets hovers near $875 million, and top-spending organizations dedicate more than $1 billion to their sales efforts. Leading primary-care divisions, according to Cutting Edge, work with more than $100 million apiece, while their specialty counterparts work with about half that amount. Pharmaceutical sales organizations spend about $150,000 per primary-care rep and $330,000 per specialty drug rep, according to Cutting Edge Information. Across the industry, companies average $31.9 million in annual sales spending for each primary-care drug. Those products treat conditions suffered by millions of individuals, such as high-cholesterol levels and allergies. Pharmaceutical companies focus on these blockbuster drugs to make the most of their annual revenue. Sales spending for specialty drugs, which treat smaller population segments, average $25.3 million per product across the industry. Yet, according to well-known industry statistics, the amount of time that sales reps have in front of the doctor to relay the pertinent facts about their products has diminished. Compounding this limited access are the industry’s self-regulated codes and guidelines that most reps must work within. The PhRMA code released in 2002, for example, limits the perks used to gain access to physicians. Prescription drug revenue begins life through strong physician-rep relationships. Among field operatives interviewed by Cutting Edge, 100% named reduced physician access as their chief tactical challenge. To attack this problem and differentiate themselves in the sales crowd, top reps embrace long-term relationship selling. Office calls are not simply opportunities to mechanically detail target physicians. Veteran reps engage doctors in two-sided discussions of medical, regulatory, and patient issues. Since it takes more than six or seven visits to influence a doctor’s prescribing habits, reps benefit from a focus on long-term relationship objectives. Effective segmenting, targeting, samples management, gatekeeper navigation, and promotional item optimization are tools that aid the relationship-selling process. Life on the Road In an exclusive to PharmaVOICE, a sales representative from a top 10 pharmaceutical company, “Pat” talks candidly about the real-world challenges that sales reps face on a regular basis, many of which aren’t covered in the training manual. Pat’s experiences will no doubt be familiar to any sales rep in the field today, but they may come as a surprise to those who are not on the front line. Similar to most reps in the industry, Pat is asked to make eight to 10 calls a day. Pat’s territory includes about 150 doctors, most of whom have adopted a no-access policy. Pat’s day starts by loading the car with samples every morning, as many as 12 cases to 15 cases, or about 450 individual samples. “About 75% of the physicians I call on have a no-access policy, which means that I literally can’t speak to the physician unless I have a set appointment or a scheduled lunch,” Pat says. “Consequently, I sample drop most of the year.” In the current climate, many times a lunch appointment is the only time reps get a chance to speak with the physicians. “This is the only access we have, and the physicians won’t even give us the courtesy to speak with us,” Pat says. “Or they come in on the fly, grab a bite, and hear a 30-second presentation. But lunch is when we’re supposed to be able to sit down and have a full discussion.” When Pat is lucky enough to get a lunch on the office schedule, under the recently enacted PhRMA voluntary code guidelines and Pat’s company policy, Pat can only spend $20 on lunch per healthcare professional. “Most physicians’ offices are fine with this, but yet others try to push the envelope, even though they know about our corporate policy and the PhRMA guidelines,” Pat says. “For example, there is one doctor’s office in my territory for which I would order lunch for eight people. One day, the office asked me to order lunch for 20. This office initiated night hours and wanted me to feed the evening shift, which we are not supposed to do. The purpose of these lunches is to deliver the message to the physicians present, not just to feed them. I was told I was not allowed back in the office if I didn’t bring food for everyone. “We are stuck between a rock and hard place; we don’t want to go against policy because there is zero tolerance and we could be fired,” Pat continues. “But, I would not have been allowed back in the office unless I brought food for the entire office.” Even with a scheduled lunch appointment, there are times when the physicians don’t honor the commitment. “I struggled to get into one office, but was eventually granted an appointment,” Pat recalls. “I arranged to have my district manager present. We waited almost two hours. Eventually, one of the physicians came out to talk to us for two minutes. After my manager left and while waiting for a signature for the sample drop, I saw the other physician sneak out the back to go to lunch. The staff had told me that he was not in the office. This particular physician waited until he thought we were gone to leave the office so as to not have to talk to us.” During another lunch appointment with a group of physicians, Pat again brought along a manager. Pat had never met this group before and wanted to talk to the physicians about a new indication for a particular drug. “They bombarded me with questions,” Pat recalls. “I was fully prepared to answer all of their questions, but it wasn’t a friendly encounter. It was more like an inquisition. They didn’t take one note on any of the information I provided to them in response to their questions. The office staff even recognized how unusual the situation was and apologized for the physicians’ rudeness. I don’t know whether I got our messages across to them at all, and there’s no way to follow up. Of course, I left the package insert, but whether they looked at it is anybody’s guess.” Pat says a new indication is the only way to get in the door in many offices. “There is another office in the territory that will only grant a lunch appointment if there is a new indication for the drug,” Pat says. “Otherwise, they don’t want to see or talk to us, but they’ll take the samples.” Creative tactics are a necessity for reps to get their foot in the door. For example, Pat started delivering breakfast once a week to a particular office. After three or four weeks, Pat was finally granted entry into the back and began to develop a relationship with the office staff. The Sample Drop Dropping samples has been one of the most effective ways to reach physicians, but today no-access offices prohibit sales reps from directly interacting with physicians, with the exception of gaining a signature. And even then, this brief encounter can be misinterpreted at times. Pat recalls one situation in which a physician initiated a conversation during a sample drop. Being new in the territory, Pat welcomed the opportunity to meet the physician, had a brief conversation, thanked the doctor for the signature, and took the samples inside the physician’s office, thinking nothing more of the encounter. Upon returning to the office, Pat received notice from a manager saying a complaint had been made. The complaint stated that Pat had cornered the doctor, made him late for patients, and that Pat had been rude and unprofessional. This scenario was so far from the truth that Pat was astounded. Pat immediately called a supervisor, who was familiar with Pat’s style and recognized that this was an unrealistic version of what had transpired. “The conversation was literally no more than 30 seconds; yet the doctor claimed I had cornered him and engaged him in conversation for more than 10 minutes,” Pat says. In further investigation, Pat who thought that it was the nursing staff who had called in the complaint was surprised to learn that the doctor called in the complaint. When Pat asked to speak to the doctor, Pat was told that it was a miscommunication and everything was fine. “The doctor’s office recanted the physician’s statement and said everything was okay,” Pat says. “I had to wonder though, did the doctor really think this is what happened? Or, did the staff see him speaking to me and he was embarrassed that he was behind in seeing patients? This is what we deal with out there; I did nothing wrong, I didn’t overstep my boundaries. I knew it was a no-access office, and I would never have approached the physician.” Pat realizes that without the support of a supervisor, this scenario easily could have led to dismissal. “I don’t think physicians know that when they place a call into a national call center with a complaint about a sales rep’s conduct or behavior that it could mean his or her job,” Pat says. “I can appreciate that the physician may be running behind, but physicians have to realize that we are trying to bring them information that is important to them to help them help their patients. But most of the time, the doctors don’t even give us the common courtesy of an introduction.” Most often, in no-access offices, Pat has never set eyes on the physician. The receptionist controls the sample drop and takes the signature form back to the physician. “It’s against policy for reps to drop samples and not witness a signature,” Pat says. “In no-access offices, this is a particular challenge. I have been told by the staff at these offices, ‘sorry, reps have told us before if they witness the signature they promise not to detail the physician and they do it anyway.’ So we’re not allowed back to witness the physician’s signature. Now, what do we do? Do we not leave samples?” Some physicians’ offices have rules posted on the sample door as to what the sales representatives can and can’t do. “For example, if I am in the sample room and the physician walks in, I am not allowed to open my mouth,” Pat says. “I have heard that a doctor literally stuck his hand in front of another rep’s face and said stop and pointed to the set of rules on the door and walked out. All this sales representative said was ‘hello.’ On a previous visit, this same physician initiated a conversation with the rep, so the rep thought it was okay to speak with him.” Pat acknowledges that in the past reps have, and still do, pushed the envelope when dropping off samples to initiate relationships with physicians, but by doing so, this negatively impacts all reps. “I am lucky if I can get a sentence or two out while the physician is signing the sample sheet,” Pat says. “And in this 30 seconds, I have to provide the product message, fair balance, and the formulary status. Most times, the physician literally is running down the hallway as I am speaking to him.” In another example, Pat says some offices have strict rules of when and how often samples can be dropped off. “Sometimes, we have designated times in which we can access sample closets,” Pat says. “There are literally reps lining up to get inside some offices.” Pat says there’s an unwritten code among many pharmaceutical company sales representatives; during sample drop offs they don’t compete for the physician’s time and they try to maintain some sense of privacy. Since many physicians’ offices are small, one company’s sales reps don’t want to be overheard by reps from competing pharmaceutical companies, many of whom are sitting in the waiting room or stocking their own samples. In the Inner Sanctum Developing a relationship with the office staff is one way to gain access to the physicians. But, according to Pat, this takes time and call routes only allow for visiting individual offices once every three or four weeks. This makes getting face time difficult. When Pat is able to gain access to a physician, this is by appointment only. But this can be deceiving. “Because I may only make a visit to an office once a month, building a relationship is hard,” Pat says. “Often the doctor is opening his or her mail or reading something and not paying any attention to me whatsoever. It’s hard to get the message across. I don’t know the physician. I don’t know his or her style, I don’t know anything about him or her.” But having a conversation with the physician, once granted access, is the most valuable way a rep can build a rapport. “This shouldn’t be an interaction where I am spitting out numbers; it should truly be a two-way conversation with the physician,” Pat says. “I don’t want to be just a talking-head.” Generating that rapport with physicians is extremely difficult, especially if reps only get to see some physicians once or twice a year. “How do you start a relationship with a physician who you only see a couple of times a year?” Pat asks. “One starts with ice breakers, of course. And we’ve been trained to use industry statistics and then go into the detail, but I don’t believe this works. It’s very difficult to spit out information when there’s no relationship to ground the conversation.” Operating within Guidelines The days of “gas and go” may be gone since the PhRMA code was enacted last year, yet some physicians still expect “special” treatment. “I was encouraged to bring treats for one high-prescribing physician’s pet, which is kept in the office,” Pat says. “This was one of the most bizarre things I have been asked to do.” There is another doctor in Pat’s territory who complains about the PhRMA code and says the more a rep can bring to him the more he loves the rep. “He always says, ‘your company used to do this or that for me,'” Pat says. “He does grant me time, but I don’t believe he can be swayed unless I can bring him something. We’re not allowed, but there are reps from competitive companies who don’t strictly follow the rules.” With so many reps in the field, many pharmaceutical companies have restructured their field forces to limit the number of sales reps selling individual products. Whether this will make a difference is yet to be seen. As Pat says, one can be in a territory for years and the doctors still don’t know what products the rep promotes. F PharmaVoice welcomes comments about this article. E-mail us at [email protected]. About 75% of the physicians I call on have a no-access policy, which means that I literally can’t speak to the physician unless I have a set appointment or a scheduled lunch. “PAT” It’s very difficult to spit out information to a physician when there’s no relationship to ground the conversation. It’s very difficult to spit out information to a physician when there’s no relationship to ground the conversation. Arm sales divisions with industry-leading budgets to drive high-end sales. Though new technologies increase rep productivity by small amounts, and companies occasionally accelerate revenue ahead of costs with one-time saving events, such as mergers or FTE cutbacks, operations eventually return to a consistent pattern: revenue stand in direct p oportion to salesforce investment. Companies that spend more – and that invest in larger sales operations – drive greater revenue. CEI reviewed sales investment figures for companies, including the top 10: 2002’s average salesforce investment was $888 million, with individual figures ranging from $400 million to $1.4 billion. In a case of “haves” versus “have-nots,” big spenders (budgets of $900 million or more) brought in 400% to 500% more in revenue than their lower-spending counterparts. For the past decade, sales spending has been an arms race that rewarded the biggest spender. The near future shows little likelihood of change. Every year, more top 10 companies cross the $100 million threshold with average spending for their primary-care divisions. Though varied across different portfolios, the average specialty division budget crossed $50 million in 2002. Spending drives sales, as do optimized rep portfolios that address market developments. Across the industry, marketing organizations determine salesforce resource levels. Each researched company’s commercial leaders incorporate salesforce feedback with institutional knowledge of therapeutic areas, competitors, and product life cycles to determine salesforce budgets. Structure and staff the sales organization to address expansion. The top tier of companies plans to increase sales headcounts by an average of 20% over the next 18 months to 24 months – a fact that shows the era of salesforce expansion is not over. Organizational structures vary little across the industry. A standard territory-district-region-nation hierarchy exists at all researched companies. Minor differences among these structures stem from mirroring strategies and product portfolios. The largest salesforces contain more than 6,000 primary-care representatives and 1,000 specialty representatives. Averages among top companies, however, show slightly smaller forces: 4,000 primary-care representatives and 850 specialty representatives. The industry’s top companies average seven primary-care divisions and five specialty sales groups. Primary-care divisions include around 600 reps, and specialty groups average 150 reps. To maintain the preferred management-to-rep ratios of 1:10 or 1:11, sales divisions staff an average of 50 district managers. Adapt operations to the changing sales landscape. Three recent trends in pharmaceutical sales have altered the landscape for reps, managers, and executives: PhRMA guidelines released in 2002; HIPAA guidelines enacted April 2003; and extensive salesforce expansion. Sales reps now have less access to physicians. There are now more than 85,000 field reps working in the United States, and reps operate within the industry’s self-regulated PhRMA code. This code, adopted in 2002, limits the perks used to access physicians. On top of these hurdles, reps now call on offices concerned about complying with new government-mandated HIPAA regulations. Reps who embrace the PhRMA and HIPAA parameters, educate doctors on these guidelines, and use such interactions to cement doctor-rep relationships will succeed in the rapidly changing pharmaceutical sales environment. Reps proactively address HIPAA concerns, for example, by: understanding their responsibilities under HIPAA guidelines; establishing trust by conspicuously respecting guidelines and avoiding contact with patient records; distributing information about HIPAA rules as they apply to reps. Ultimately, field forces that incorporate changing trends into their operations, instead of fighting or avoiding them, establish reputations as reliable sources of medical and industry information. Design compensation models to reward performance in the evolving marketplace. Sales compensation models and incentive-based reward and recognition programs provide executives with critical strategic management tools. Well-planned programs motivate reps to meet ever-increasing sales targets. As costs rise, rewards and recognition programs focus more on differentiated, merit-based compensation – some sales reps receive more than 25% to 30% of their total compensation in incentive-based bonuses. Regardless of a program’s details, it must be clearly communicated to stakeholders, easy to understand, and have a direct connection to strategic objectives. At the same time, managers must address rep expectations at a time when industry instability forces bonus levels down. One of the surveyed companies, for example, added a share-of-market component to its incentive program. The sales organization added this factor to balance a percent-to-quota system that sometimes rewarded performers with lower quotas over top reps with ambitious goals. To make the system more equitable, the company now incorporates each rep’s share of market to compensate for the revenue his or her sales efforts represent. Master relationship selling skills to boost office call effectiveness. In the face of growing salesforce headcounts and limited physician access, plus disruptions such as territory realignments, new reps work for several months to impact a physician’s prescription habits. Instead of individual sales calls, reps employ relationship selling to build gradual bonds with doctors and their offices. Relationship selling is a progressive process that solidifies buy-in at each step before working toward the next level. It involves interaction on both the rep and the physician’s parts. To build trust and familiarity, reps engage doctors during each visit by asking open-ended questions and avoiding detail lectures. They reflect previous discussions in each subsequent visit. They slowly learn about the doctor’s practice and build relationships with office staff as well. Source: Cutting Edge Information, Durham, N.C. For more information, visit cuttingedgeinfo.com. 1 2 3 Cutting Edge Information (CEI) analysts synthesized the following five principles from the full breadth and depth of research conducted with: Aventis, Pfizer, Novartis, Eli Lilly, Merck KGaA, GlaxoSmithKline, Johnson & Johnson, Eisai, 3M Pharmaceuticals, Merck, AstraZeneca, Roche, Pharmacia, Bristol-Myers Squibb, Bayer, Schering-Plough, and Procter & Gamble. 4 5 According to I started delivering breakfast once a week to a particular office. After three or four weeks, I was finally granted entry into the back and began to develop a relationship with the office staff. PAT

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