Image courtesy ZS Associates. Click to enlarge
The number of pharmaceutical sales reps, once ubiquitous in doctor’s offices, has been cut in half since 2005 as a result of consolidation, reduced access to prescribing doctors and changes in the way healthcare is delivered, according to a new report in the Wall Street Journal based partly on data from consulting firm ZS Associates.
In 2005, pharmaceutical companies had more than 102,000 sales representatives in the field selling to physicians but by the middle of this year, those numbers were around 63,000, according to ZS Associates. Further, those reps that were in the field reported dramatic drops in access to physician decision makers.
According to ZS Associates, 79% of drug sales reps said in a 2009 survey that they had access to physician decision-makers. This year, that number was just 50%.
The data is a stark reminder of the declining influence of sales reps in pharmaceuticals sales – and perhaps the broader healthcare ecosystem. Pharma companies are replacing reps with key account managers, according to the newspaper, which reported that the 20 biggest drug companies employ roughly 600 key account managers, 3 times the number they employed 5 years ago.
And analysts at ZS recommend that pharmaceutical companies re-think how they approach access to physicians and the role of sales reps in general.
"’Access’ needs to include more than sales calls," wrote managing principal Pratap Khedkar. "Companies need to think of rep visits as ‘information-gathering events’ rather than simply sales calls."
Recent reports suggest that hospitals are more aggressively shutting device reps out of the decision-making process in order to save money. Some hospitals, like Loma Linda University Medical Center in California, told Modern Healthcare that the hospital is getting deep discounts for certain knee and hip implants by training its own staff to take the place of company sales reps.
"Sales reps have created this necessity for themselves with the surgeon, and we’re saying it’s not as necessary as everyone thinks it is," Loma Linda executive director Justin Freed said. Freed did not reveal which manufacturer he was working with.
So-called "rep-less" sales models appear to be gaining popularity, as hospitals look to reduce costs and dilute industry influence in the clinic. But MassDevice.com’s readers, participating in an anonymous forum, voiced wariness and disapproval, with few lauding the trend.
"I think this could work on a situational basis. Some items they could eliminate reps and save, others are much more service-intensive and require a high level of expertise," 1 commenter wrote, adding that orthopedic sales reps, like those fading out at Loma Linda, may be the most expendable.
Another warned that the shift may raise ire among physicians, who often rely on the expertise of sales reps who have seen 100s of procedures with a given device where the OR team may have seen only a handful.
Perhaps the most impassioned arguments came from a pair of posters who warned that hospitals administrators were mistakenly blaming medical devices and medtech sales reps for the high cost of care.
"I have been selling orthopedic implants for 14 years and have never got a price increase on my implants. In fact the price has gone down 30%-50% on hips, knees and revision implants for both," the commenter wrote. "Orthopedics, cardiac and oncology are the top 3 money-makers for hospitals. Medical devices are only a small fraction of the cost."