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Doctors Are Getting Fed Up With Sales-Force Overkill

Nov 30, 2002 | Wall Street Journal

Drug salespeople have recently taken heat from regulators for gimmicks that could distort doctors' incentives in prescribing drugs. Now those salespeople are hitting another hurdle: Doctors are sick of seeing them.

Sales forces at drug companies have nearly doubled to 80,000 reps over the past five years, according to research outfit Verispan. Yet the ranks of office-based doctors, the prime target of those salespeople, rose only 15% to 490,000 over the five-year period ending in 2000, the most recent year for which the American Medical Association has data. And these doctors aren't making more time for meetings. The upshot: sales force overkill.

"We've had incursions in our practice from drug reps coming in while we're seeing patients," says Robert S. Rosen, an ophthalmologist in San Diego, Calif. He says the current sales model isn't efficient for doctors or drug makers. "If I'm in the office and busy, I'm not focusing on anything [a rep] has to say," he explains.

Excess sales staff is bad for drug manufacturers' bottom line, it's aggravating for doctors, and it interferes with patient services. The problem is growing so severe that a new outfit has cropped up attempting to act as a gatekeeper between drug firms and doctors. The American Physician Partners Association, a closely held company based in Wilmington, North Carolina, promises to act as a scheduler to doctors, who would also share in APPA's profits. The idea is to collect information about doctors' preferences on meeting times and clinical subjects, and match those against the requests of drug makers.

It's a nascent and in some respects controversial concept. But whether or not it succeeds, the initial interest it's sparked among doctors speaks to the mounting dissatisfaction with the face-to-face sales model that drug makers have relied on for decades.

Sales force expansions made sense for years because at first hiring reps led to increases in sales that far exceeded the added expense. More detail men, as the salespeople are called in industry argot, led to more prescriptions written for the company's product. Even though the incremental return is waning, the sales force arms race is an old habit that dies hard.

Gordon Walton, with Braun Consulting in Chicago, likens drug sales force bloat to the "double coupon dilemma" sapping grocery stores' bottom lines. The first store to double the value of coupons drew hoards of shoppers that translated into quick rewards in market share. Soon, the losers followed, however. And once they all doubled coupons, the innovation morphed into a tax that hurt everyone's profitability.

One of the most disturbing signs of sales rep saturation was the explosion of lavish entertainment of physicians by drug companies. Sales reps seemed willing to try anything to stand out. Once the spotlight shone on this borderline bribery, such as sales pitches delivered while filling the tank in the doctor's car, the pharmaceuticals found the resolve to adopt a voluntary code of conduct to curb the most egregious practices.

The drug makers, however, have not begun any serious scalebacks in sales force size. Mr. Walton says that nobody wants to be the first to cut the ranks of salespeople for fear their competitors won't do the same.

If they don't act soon, though, big pharma may face a solution not to their liking.

Doctors won't cut the detail men out altogether. Most weeks, doctors spend between 35 and 40 minutes seeing sales reps, according to Impact Rx, a closely held concern that tracks promotion by drug makers. Doctors want those free samples of medicines that reps carry. And doctors still learn much of what they know about medicines from drug reps. That's why drug companies continue to pour money into an expensive sales force.

But doctors are reaching their limits, and it's this frustration that a the American Physician Partners Association is trying to tap into. APPA says it has signed up about 12,000 doctors so far. As for the business model, originally APPA said it would charge drug reps a $75 fee for each doctor visit. But that condition infuriated drug makers. On the message boards of, a Web site created by drug reps for drug reps, one poster howled that the plan seemed like a way for doctors "to line their pockets" at the drug industry's expense.

Whipsawed by the backlash, APPA dropped the scheduling fee earlier this month. "We've gotten a little warmer look at it since we've done that," said Michael Harms, president of APPA. "We're extending an olive branch saying we'll do this for free." APPA still plans to collect fees for other services, such as market research.

So far not a single drug company has signed up. One issue they cite is conflicts. Participating doctors pay nothing but share part of the revenue collected by APPA from drug makers. Dr. Rosen of San Diego, for one, says that's only fair compensation for the time he would devote to listening to the drug makers. But drug firms say they find the revenue-sharing with doctors unseemly, or possibly illegal. Pfizer Inc., for instance, evaluated the APPA proposal and declined. Mark Horn, a doctor in charge of Pfizer's medical alliances, said the company believes APPA's revenue-sharing model would violate the drug industry's recently adopted voluntary code on sales, on the theory that the structure provides an overall financial incentive for doctors to see sales reps in the program.

In a test of APPA's clout, participating doctors this month started turning away sales reps who hadn't scheduled appointments through APPA. Mr. Harms continues to recruit doctors and is banking that eventually he'll have enough of them in his camp to compel drug companies to play along. He says APPA can last a year without a major drug company client, though he hopes for a crack in the wall before then.

Whether APPA succeeds, its existence and ability to sign up thousands of disgruntled doctors should be a wake-up call to the pharmaceutical firms. Time's running out for the industry to find a better way to reach the physicians whose decisions on medicines make all the difference for drug makers, and patients too.

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