Healthy Skepticism Library item: 2532

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: media release

Rockrohr P.
Consulting Roundtable examines the pharmaceutical industry
University of Chicago Graduate School of Business News 2005 Aug 30
http://gsb.uchicago.edu/news/2005-08-30h_pharmasales.aspx

Full text:

Because of the limited lifespan of drug patents, pharmaceutical companies must move quickly when a new drug hits the market, according to Tom Nacher, a manager of ZS Associates, an international sales and marketing consulting firm. “Pharmaceutical companies have an interest in making it big and making it quick,” Nacher told the Consulting Roundtable at Gleacher Center on August 25. “Their products have very high profits during these patent periods. And because of the investments made to develop these drugs, pharmaceutical companies need to make sure they extract the most value possible out of the brands that make it into the marketplace.”

Although physicians often feel overwhelmed by the massive sales forces “deployed” by the pharmaceutical industry, the tactic actually works very well, Nacher said. Physicians, who see up to 20 sales representatives a day, often feel the visits take too much time from their patients, he said. Nonetheless, companies have found repeated visits increase sales. “We see it year after year-it does create results,” Nacher said. “It’s almost like advertising.” For that reason, Nacher is skeptical big pharma will downsize sales teams, unless products are displaced.

Recent negative publicity, in particular the Vioxx scandal and trial, has eliminated or heavily regulated the sale of highly profitable drugs, Nacher said. “That means direct loss of revenues for these companies,” he said. “These developments may be welcome for a number of patients who are at risk from these drugs. But if you look at it purely from the financial perspective of the pharmaceutical company, this is something that is a concern and that may need a reaction from them.” Industry executives fear the publicity may change strategies of key players in the market and create a lack of trust in safe drugs, Nacher said.