The market for pharmaceutical reps is growing more anemic, as drug makers look to scientists, not sales staff, to boost income.
In the last two years, almost every drug maker has made sizeable reductions to their sales forces. Some 45,263 such jobs have disappeared so far this year, according to outplacement company Challenger, Gray and Christmas. That's on top of almost 60,000 pharmaceutical dealers who vanished in 2009.
What used to be the most lucrative business for sales, with an average rep earning at least $100,000 a year, according to recruiter estimates, looks fairly bleak.
One of the primary culprits is a dearth of new blockbuster drugs. Patents are expiring on a lot of the most profitable pills, including Pfizer's Lipitor heart-disease drug and GlaxoSmithKline's Advair asthma drug. The generic replicas that will fill the market in the aftermath require little in the way of sales effort.
Drug makers, in turn, are funneling funds from sales and marketing into scientists hunting for the next big breakthrough. For example, since 2007, the share of expenses going to sales at drug giant Novartis has dropped from 29.2% to 25.2%. And Novartis recently announced that it is going to invest more in R&D.
Kris Byer, president of Huntington Beach, Calif.-based recruiting firm MedSearch USA, called R&D "the lifeblood of any company." "The first place the cuts happen is sales, because it's the easiest," she said.
The fact that many doctors no longer open doors to reps isn't helping either. Almost a quarter of physicians don't talk to sales reps and almost half want them to make appointments, according to an October report by SK&A, a marketing company that works with hospitals and healthcare providers. According to consulting group TNS healthcare, only 37% of doctor visits lead to placement of drug samples.
There are some hopeful pills in the pipeline, notably drugs promised to treat obesity from Arena, Vivus and Orexigen. However, the offerings are still tied up in the FDA approval process.
Meanwhile, the industry's vitals may weaken further. ZS Associates, a consulting firm, estimates that 75,000 people will be selling pharmaceuticals in 2012, which would be a 26% decline from 2007 levels.
Write to Shareen Pathak
