Healthy Skepticism Library item: 1286

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Publication type: news

Hensley S.
As Drug-Sales Teams Multiply, Doctors Start to Tune Them Out 'Arms Race' by Pfizer and Rivals Boosts Pill Prices, Ire, but No One Dares Retreat
The Wall Street Journal 2003 Jun 13

Full text:

Marna Sternbach, a family-practice doctor in Philadelphia, wonders why five different Pfizer Inc. sales representatives keep showing up at her office again and again to talk about the same painkillers, Bextra and Celebrex.

One of those Pfizer reps, Alisa Sonsev, recently waited 45 minutes in the office kitchen with a catered taco lunch paid for by the drug maker before the doctor came in. Ms. Sonsev told Dr. Sternbach that the local pain-specialists society endorsed a group of drugs that includes the two Pfizer products, and asked if insurers have been paying for them.

The sales pitch was over in three minutes. Dr. Sternbach signed a form to accept more free cartons of Bextra and Celebrex, already filling a refrigerator-size cabinet in a nearby storage room. “It’s a little weird to see the same products so many times from so many people,” she says.

“There’s nothing new to say.”

A decade-long hiring spree has tripled the number of drug-industry sales reps to 90,000. The reason: Face-to-face sales to doctors are more effective than consumer advertising at increasing drug prescriptions — and creating blockbuster drugs. The drug industry is convinced that the more often doctors talk with a sales rep about a drug, the more likely they are to prescribe it.

Some drug makers concede that there are too many salespeople — and that the glut contributes to the growing cost of health care. Last year, the drug industry spent more than $12 billion on its sales forces, according to Sanford C. Bernstein & Co., compared with $2.76 billion on consumer drug ads. Meanwhile Americans’ expenditures on prescription drugs surged 14% last year, to about $161 billion, according to the federal government.

But like Cold War enemies, no drug company is willing to be the first to disarm its own troops. Even though drug makers such as Pfizer are looking for ways to cut costs, their sales armies appear to be the least likely target for cutbacks. GlaxoSmithKline PLC’s sales force is so big that it needs only seven days to reach the U.S. doctors who write 80% of all prescriptions. “Is it necessary?” says Jean-Pierre Garnier, Glaxo’s chief executive officer. “No, but if my competitor can do it and I can’t do it, then I’m at a disadvantage. This has been an arms race in the worst possible manner.”

“Having more sales reps … is not a source of competitive advantage,” adds Raymond Gilmartin, Merck & Co.‘s chairman and CEO. He says drug companies gain the biggest edge by discovering new medicines. Yet Merck has added 1,500 sales reps in the U.S. since 2001, bringing its total to about 7,000.

The explosion of salespeople means that drug makers now send out overlapping armies to cover the same territory, promote the same drugs and drop in on doctors once a week or more. The onslaught increasingly gets in the way of doctors already seeing more patients than ever because of managed care. Fed up, doctors and their staffs are slamming the door on more drug salespeople.

The average sales rep had 529 meetings with doctors in 2001, the latest year for which figures are available, according to consulting firm IMS Health. That’s down 35% from 808 in 1996. A recent McKinsey & Co. study found that only one in every five sales calls results in a conversation with a doctor — and only 8% lead to chats that doctors remember later.

[pfizer]

When sales reps do get past the waiting room, they sometimes go to unusual lengths to rise above the cacophony of pitches. Last year, a few Pfizer reps brought along a guest speaker who was both a doctor and lawyer to a lunch meeting with doctors at Clinical Associates, a group practice in suburban Baltimore. He said they risked being sued if their patients didn’t reach their cholesterol goals, recalls Gary Manko, an internist and president of the Towson, Md., practice.

The message was clear: Doctors should prescribe more Lipitor, the strongest cholesterol-cutting medicine and Pfizer’s top seller. Dr. Manko sometimes prescribes Lipitor but has been more comfortable with rival drug Pravachol from Bristol-Myers Squibb & Co. “We were offended by the whole tone of the conversation,” he says, and he told Pfizer never “to bring someone like that in here again.”

Pfizer says it hasn’t been able to verify what happened in the meeting with Dr. Manko. A spokesman said the company takes “the conduct of our representatives very seriously” and “will take appropriate action if warranted.”

Growing Resistance

The growing resistance from doctors to the drug industry’s smothering sales forces poses a particular challenge for Pfizer, the world’s largest drug maker. Many competitors cut their sales forces in the early 1990s, figuring that managed-care companies would dictate drug choices.

Pfizer instead bet even bigger on face-to-face sales — and then catapulted to the top of the industry from 14th at the start of the decade as doctors kept most of their control. Other companies have tried to catch up, but Pfizer’s enormous, well-trained and aggressive sales force remains the most feared.

Pfizer’s sales force swelled by 3,000, or more than a third, to 11,000 when the New York company completed its acquisition of Pharmacia Corp.

in April. The combined company now has 11 separate sales forces calling on primary-care doctors such as Dr. Sternbach — up from three less than a decade ago. Three sales teams are named after former Pfizer CEOs. Henry McKinnell, Pfizer’s current chairman and CEO, says the company’s stable of medicines — 28 are actively promoted — justifies Pfizer’s huge sales force. “If you don’t have a lot to say, you don’t need a very big sales force to say it, quite frankly.”

The drug industry’s overall glut of salespeople is forcing Pfizer to zero in on doctors even faster, more frequently and in more memorable ways. Like many other pharmaceutical companies, Pfizer has endured a dearth of new medicines — yet must sell at least $4 billion more drugs than last year’s $40 billion at Pfizer and Pharmacia combined to achieve the double-digit revenue growth that investors expect.

You could feel the pressure building when J. Patrick Kelly, president of Pfizer’s U.S. pharmaceuticals unit, gave a pep talk last month to 550 salespeople and managers from the Northeast packed into a Westin Hotel ballroom in Stamford, Conn. “Welcome to my world,” Mr. Kelly told the group while pacing the stage. “I’m feeling it, and I’m sweating.”

Sales look weak, Mr. Kelly warned the crowd of well-scrubbed, mostly young men and women. So far this year, Pfizer is running a half-billion dollars below its internal sales target. And sales growth is tepid, up by only a single-digit percentage compared with last year. “We’ve never been there before,” Mr. Kelly said.

The most ominous sign: Lipitor, the best-selling prescription drug in the world, is showing signs of a slowdown. Lipitor sales, which hit $8 billion last year, are $227 million behind Pfizer’s internal target for the U.S., Mr. Kelly told his troops — and are growing at only half the 9% rate of cholesterol-lowering drugs as a group. Lipitor is so important to Pfizer that if sales don’t pick up, the company won’t hit its earnings targets this year.

Mr. Kelly coolly dispatched Pfizer’s sales force with a challenge. “Can this now-huge elephant dance?” he asked. “You bet it can. Can this elephant sprint? We have 218 days left to prove it can.” The sales reps erupted in a minute-long standing ovation.

A Pfizer spokesman said Thursday that the company’s performance against internal sales targets has improved in the last month, adding that Pfizer remains confident it will achieve its full-year projections for Lipitor.

Pfizer puts its sales force through intense training. Before being allowed to see their first doctors, new sales reps have been through 40 simulated sales calls, many of them videotaped. In response to the time crunch facing most doctors and their reluctance to hear the same sales pitch over and over, training sessions now include rehearsals of mock 30-second encounters with doctors in parking lots and office hallways.

Each Pfizer sales rep is taught to go in with the goal of talking about four drugs, though most are lucky to squeeze in more than one before the doctor rushes back to work. Pfizer’s average sales call lasts only 2½ minutes. The company won’t say how much it pays its reps, but a good drug-industry salesperson can make more than $100,000 a year.

Even the most gung-ho salespeople have trouble corralling a particular doctor more than once a month. So Pfizer and other drug makers devised a tactic called “mirroring,” in which sales troops are divided into groups that share the same turf. As a result, different Pfizer salespeople show up at doctors’ offices to promote the same drugs.

Pitching Staff

Pfizer executives acknowledge that coordinating the mushrooming number of salespeople is a challenge. One group emphasizes cardiovascular drugs, another medicines for the nervous system such as the antidepressant Zoloft, while a third group visits institutional clients such as hospitals and managed-care plans. Some sales territories now are as small as a single ZIP Code. Pfizer aims to put a new face with a new message about its top drugs in front of the most important doctors every week.

The local teams synchronize once a month on sales-pitch schedules that determine which reps will try to see which doctors when. Between meetings, they use voice mail and computers to trade information on doctors’ special preferences or requests. Bonuses are based in part on how well a sales rep performs with his team.

It’s easy for drug makers to decide which doctors to visit. The companies, including Pfizer, buy data from prescription-tracking firms showing almost every prescription doctors are writing — and whether the sales pitches are working.

To increase their odds, sales teams at Pfizer also can call in outside speakers to deliver talks on breaking medical topics, provide advice on how to make a doctor’s office more efficient and even support a practice’s community outreach with a Pfizer-sponsored medical van.

Pfizer argues that its representatives earn doctors’ time because they bring timely, useful scientific data on their drugs, many of which are the best sellers in their category. Ten Pfizer drugs have annual sales of at least $1 billion, the customary threshold for blockbuster status.

Bextra and Celebrex had combined sales of $3.5 billion last year. “When we’re effectively getting our message across to physicians, we know we save lives,” says Michelle Krebs, a Pfizer regional manager in Parsippany, N.J.

The free drug samples delivered to doctors’ offices do help patients, particularly those with no insurance coverage for prescription drugs.

Some Medicare patients can get all the drugs they need from samples.

Many doctors just don’t have enough time to see all the sales reps that want to talk. “If each one makes an appointment with me, they could fill my schedule up for an entire year,” says Dr. Manko, the Maryland doctor.

A dozen salespeople pass through his office during the average day.

To impose order, Dr. Manko’s practice now requires appointments in advance, rations coveted lunch meetings and limits access to the back-office area to one rep at a time. Dr. Manko is particularly sought after because salespeople know he is a heavy prescriber of medicines in the most competitive categories, such as depression and cholesterol. If drug makers “would reduce their sales forces, give me the same number of samples and lower prices of their medicines, I would be very happy,” he says.

Drug makers agree that the sheer size of the competing sales armies is causing them to lose a bit of their punch with doctors. To overcome the problem, Merck, of Whitehouse Station, N.J., shuns scattershot sales calls “on every possible physician without paying attention to the quality of that effort and the cost-effectiveness,” says Mr. Gilmartin, Merck’s CEO.

Pfizer is trying harder to take advantage of the speed and flexibility of its salespeople — not just their brute force. In April, Pfizer used its sprawling sales army to spread the results of a European study showing that Lipitor could reduce the incidence of fatal heart attacks in patients with high blood pressure and moderately elevated cholesterol. The study was the first to show that Lipitor can save lives by decreasing cholesterol levels. The lack of such evidence had led some doctors, including Dr. Manko, to prefer cholesterol fighters such as Pravachol that had more proof on their side.

A Pfizer studio in Rye Brook, N.Y., produced briefings that were beamed via satellite to regional offices and the homes of field managers, each equipped with a company-supplied dish. Sales reps across the U.S. dialed into teleconferences. And within 24 hours, Pfizer’s salespeople received shrink-wrapped reprints of the study, known by the acronym Ascot, to give doctors if they ask about it.

Pfizer’s sales army isn’t allowed to bring up the study with doctors until a change in Lipitor’s label, reflecting the study’s results, is approved by the Food and Drug Administration. But salespeople can refer doctors’ questions to Pfizer’s medical department.

Meanwhile, it looks like last month’s full-court press on Pfizer salespeople to bring in more prescriptions is getting through. Dr. Sternbach, the family-practice doctor in Philadelphia, says the parade of Pfizer sales reps continues — but now they’re singing a different tune. “They’re all talking about Lipitor,” she says.