QUICK SUMMARY Report Features Table of Contents Key Metrics Sample Content Charts and Graphs About CEI REPORT DATE AND FORMAT 2011 Adobe PDF E-Copy TOTAL NUMBER OF SURVEYED COMPANIES 21 Pharmaceutical and Biotech Companies REPORT LENGTH 152 pages METRICS AND CHARTS 115 Graphics 500+ Metrics CONTACT INFORMATION Adam Bianchi 919-433-0202 [email protected]1 2 3 7 12 16 www.cuttingedgeinfo.com Specialty and hospital sales forces face great challenges as economic pressures, changing regulations and self-imposed guidleines transform the sales landscape. Access to physicians and other staff is diminishing, and healthcare overhauls will change the way business is done — throughout hospitals and in each doctor’s office. Successful sales professionals create personal relationships with physicians, uncover new ways to reach targets and understand how to navigate the evolving healthcare environment. As specialist targeting increases and hospital sales grow ever more intricate, the best talent — with the right support — will rise to the top. This report will help all hospital and specialty sales groups as they gauge their own performance and prepare themselves for the next step forward. • Boost sales force performance: Increase reach and access by making your team the best it can be. Compare performance metrics, explore training costs and improve reps’ business acumen as they face new healthcare legislation and increasingly complicated hospital clients. • Nail your budget needs: Explore sales spending broken down into critical budget categories. Determine your efficiency with cost-per-rep and cost-per- detail benchmarks — and attract top talent with competitive compensation for all experience and performance levels. • Build — or adjust — your sales group: Specialty and hospital groups were largely right-sized even before the big PCP sales reductions. Gear up for the new sales era with headcounts and staffing ratios for reps, DMs and regional managers — and make sure your sales force is the perfect size for the challenges ahead. Specialty and Hospital Sales Force Management
Specialty and hospital sales forces face great challenges as economic pressures, changing regulations and self-imposed guidleines transform the sales landscape. Access to physicians and other staff is diminishing, and healthcare overhauls will change the way business is done — throughout hospitals and in each doctor’s office.
Successful sales professionals create personal relationships with physicians, uncover new ways to reach targets and understand how to navigate the evolving healthcare environment. As specialist targeting increases and hospital sales grow ever more intricate, the best talent — with the right support — will rise to the top.
This report will help all hospital and specialty sales groups as they gauge their own performance and prepare themselves for the next step forward.
• Boost sales force performance: Increase reach and access by making your team the best it can be. Compare performance metrics, explore training costs and improve reps’ business acumen as they face new healthcare legislation and increasingly complicated hospital clients.
• Nail your budget needs: Explore sales spending broken down into critical budgetcategories.Determineyourefficiencywithcost-per-repandcost-per- detail benchmarks — and attract top talent with competitive compensation for all experience and performance levels.
• Build — or adjust — your sales group: Specialty and hospital groups were largely right-sized even before the big PCP sales reductions. Gear up for thenewsaleserawithheadcountsandstaffingratiosforreps,DMsand regional managers — and make sure your sales force is the perfect size for the challenges ahead.
Specialty and Hospital Sales Force Management
Cutting Edge Information
SPECIALTY AND HOSPITAL SALES FORCE MANAGEMENT �
TABLE OF CONTENTS
9 Executive Summary
12 MethodologyandDefinitions
13 ProfiledCompanies
14 Pharmaceutical Sales Forces: Five Principles for Success
21 Field Activities and e-Detailing
45 Maximizing Sales Rep Success
59 Supplementing Sales Forces Efforts with e-Detailing
79 SalesForceInvestment,StaffingandSalesTraining
81 Specialty and Hospital Sales Force Investment
90 SpecialtyandHospitalSalesForceStaffing
112 Sales Training
123 Sales Force Compensation
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KEY METRICSChapter 1: Field Activities and e-Detailing
ChapterBenefits:
• Measurehospitalandspecialtysalesreps’success.
• Eliminate barriers to physician access and increase sales touches using fresh and innovative approaches.
• Improve physician-rep relationships to make the most out of limited time with targets—andinfluenceprescriberhabits.
• Stay ahead of the curve with the latest trends in hospital/specialty pharma sales(mirroringandrep-to-DMratios,forexample.)
• Costs per detail, including and excluding samples
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• Average cost per sales rep
• Total investment per rep
• Sales force expansion/contraction over the last 12 to 24 months
• Percentage by which companies expanded sales forces over the last 12 to 24 months (data given for companies that expanded as well as those that contracted)
• Planned sales force expansion/contraction over the next 12 to 24 months
• Percentage by which companies plan to expand sales forces over the next 12 to 24 months (Data detail companies that plan to expand as well as those planningtocontact.)
• Percentage of companies that realigned their specialty sales forces over the last 12 to 24 months
• Average number of reps per district manager — today versus 12 to 24 months ago
• Ideal number of reps per district manager
• Ideal number of district managers per regional manager
Sales Rep Training
• First-year training costs for new sales reps
• Number of hours of training given to newly hired sales reps
• Annual training costs for average veteran reps
• First-year training costs for new sales reps
• Number of hours of training given to newly hired reps
• Annual training costs for average veteran reps
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Chapter 3: Sales Force Compensation
ChapterBenefits:
• Benchmark compensation to stay competitive and attract and retain top sales talent.
• Access metrics across the spectrum of reps’ experience levels.
• Percentage of compensation that is bonus for newly hired, average and high-performing regional managers
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SAMPLE CONTENT
The following excerpt is taken from Chapter 1, “Field Activities and e-Detailing.” The full report explores more metrics for specialty and hospital sales forces, including the number of target visits per day and monthly visits per rep.
Number of Drugs Carried by Reps
Although many media organizations are reporting that a growing trend in pharma sales is the cross-training of reps to represent more drugs, Cutting Edge Information’sfindingsdonotindicatethatthistrendiswidespread.Figure 1.17 and Figure 1.18 show that the maximum number of drugs that specialty and hospital sales forces will ask their reps to carry is four. The averages for both specialty and hospital sales fall between two and three drugs per rep.
Interestingly, hospital sales reps are now responsible for an average 0.2 drugs fewer than two years ago. However, specialty reps are responsible for 0.2 drugs morethantwoyearsago.Ashiftof0.2isnotsignificantenoughtodeclareatrend, but it is worth noting that changes occurred in the opposite direction for each type of sales force.
Figure 1.1�: Number of Products Represented by Sales Reps (Specialty Sales)
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SPECIALTY AND HOSPITAL SALES FORCE MANAGEMENT �
Figure 1.1�: Number of Products Represented by Sales Reps (Hospital Sales)
This phenomenon may be due, in part, to the growing number of patent expirations facing many pharma companies. Once drugs lose patent coverage — and even six months prior to patent expiration — there is no longer any need to promote them. These drugs would not provide ROI; any promotional activities would only support thegenericequivalentbeinglaunched.
An interviewed executive offers another explanation, pointing out that though companies are generally operating with fewer drug reps, they always have more reps than brands. In the past, the company’s reps divided their focus among their various brands, contributing 50% of their time to their main brand and the other 50% split among Brands B, C and D. Generally, reps ignored the minor drugs.
Now, however, reps only have two brands to promote, and they no longer feel schizophrenic by having to divide their time among so many brands. Limiting the drugs in the repertoire has also encouraged more ownership of the products. As a result of these shifts, reps now spend more time doing unbranded priming of their territories for product launches and participate in advocacy efforts related to their brands.
Cutting Edge Information
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The following is excerpted from Chapter 2, “Sales Force Investment, Staffing and Sales Training.” For more detailed investment and headcount information, please refer to the full report.
Specialty Cost per Detail
The inclusion or exclusion of samples has little impact on the average cost of detail in specialty sales. Although specialty samples tend to cost more than their primary care counterparts, most companies surveyed for this report allocate only a small percentage of their total budgets — an average of 3% — toward samples and sample management. Figures 2.5 and 2.6 show the costs per detail including and excluding samples, respectively. The average cost per detail with a sample is $221, slightly higher than the average per detail without a sample of $208. Companies reported a wide range of costs per detail, from a low of $140 to a high of $300, suggesting that certainspecialtieswillrequirelargerinvestmentsperdetailthanothers,basedonfactors such as therapeutic area and product type.
Figure �.�: Cost per Detail Including Samples (Specialty Sales)
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Figure �.�: Cost per Detail Excluding Samples (Specialty Sales)
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The following is excerpted from Chapter 3, “Sales Force Compensation.” For detailed information on sales force compensation levels, from reps to regional and district managers, please refer to the full report.
Themostsought-afterreps,highperformers,reapthebenefitsofbeingverytalented at their jobs. As Figure 3.5 shows, high-performing specialty reps earn significantlymorethandoaveragerepsatseveralcompaniessurveyed.AtCompany8, for example, a high-performing rep expects $145,000 on average annually versus $109,000 for an average rep — a 33% increase over average reps’ compensation.
The importance of these reps cannot be overstated. In fact, one surveyed company reported moving 25% of the overall bonus compensation pool from its bottom quartileofperformerstothetopquartileinanattempttofurtherrewardthegroupand to retain their services.
In terms of bonus compensation, high-performing specialty reps’ bonus is a higher percentage of their overall compensation. This makes sense as these reps sell more and thereby earn higher incentives-based pay.
Figure �.�: Compensation Levels of High-Performing Sales Reps (Specialty Sales)
Cutting Edge Information
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CHARTS AND GRAPHICSExecutive Summary
Pharmaceutical Sales Forces: Five Principles for Success16 Figure E.1: Allocation of e-Detailing Budget by Sales Force Type (Dollars)
18 Figure E.2: Rep Time Allocation (Specialty Sales)
18 Figure E.3: Rep Time Allocation (Hospital Sales)
Field Activities and e-Detailing
23 Figure 1.1: Overall Changes to District Manager to Rep Ratios Over the Last 12 to 24 Months (Specialty Sales)
23 Figure 1.2: Overall Changes to District Manager to Rep Ratios Over the Last 12 to 24 Months (Hospital Sales)
25 Figure 1.3: Average Number of Reps Targeting Each Level of Physician (Specialty Sales)
26 Figure 1.4: Average Number of Reps Targeting Each Level of Physician (Hospital Sales)
27 Figure 1.5: Mirroring For Top Targets (Specialty Sales)
28 Figure 1.6: Mirroring for Top Targets (Hospital Sales)
29 Figure 1.7: Mirroring for Mid-Level Targets (Specialty Sales)
30 Figure 1.8: Mirroring for Low-Level Targets (Specialty Sales)
31 Figure 1.9: Mirroring for Mid-Level Targets (Hospital Sales)
32 Figure 1.10: Mirroring for Low-Level Targets (Hospital Sales)
34 Figure 1.11: Changes to Average Number of Daily Visits over the Last 12 to 24 Months (Specialty Sales)
35 Figure 1.12: Changes to Average Number of Daily Visits over the Last 12 to 24 Months (Hospital Sales)
36 Figure 1.13: Average Number of Target Visits per Day (Specialty Sales)
37 Figure 1.14: Average Number of Target Visits per Day (Hospital Sales)
38 Figure 1.15: Average Monthly Visits per Rep to Tiers of Prescribers (Specialty Sales)
39 Figure 1.16: Average Monthly Visits per Rep to Tiers of Prescribers (Hospital Sales)
40 Figure 1.17: Number of Products Represented by Sales Reps (Specialty Sales)
41 Figure 1.18: Number of Products Represented by Sales Reps (Hospital Sales)
42 Figure 1.19: Rep Time Allocation (Specialty Sales)
43 Figure 1.20: Rep Time Allocation (Hospital Sales)
Maximizing Sales Rep Success45 Figure 1.21: Success Rate of Specialty Sales Reps: Percentage of the Time Reps Get to Detail Physicians
Face-to-Face
46 Figure 1.22: Success Rate of Hospital Sales Reps: Percentage of the Time Reps Get to Detail Physicians
Face-to-Face
47 Figure 1.23: Success Rate of Specialty Sales Reps: Average Number of Minutes Reps Get with Targets
48 Figure 1.24: Success Rate of Hospital Sales Reps: Average Number of Minutes Reps Get with Targets
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CHARTS AND GRAPHICS Supplementing Sales Forces Efforts with e-Detailing60 Figure 1.25: Annual Investment in e-Detailing Activities
61 Figure 1.26: Allocation of e-Detailing Budget by Sales Force Type (Percentages)
62 Figure 1.27: Allocation of e-Detailing Budget by Sales Force Type (Dollars)
63 Figure 1.28: e-Detailing Investment per Sales Rep
64 Figure 1.29: Percentage of e-Detailing Budget Outsourced
67 Figure 1.30: Types of e-Detailing Delivered by Surveyed Companies
68 Figure 1.31: Delivery Methodologies for e-Details
69 Figure 1.32: When e-Detailing Campaigns Are Most Effective
71 Figure 1.33: Levels of Prescribers Targeted by e-Detailing Campaigns
74 Figure 1.34: Dedicated e-Detailing Teams
SalesForceInvestment,StaffingandSalesTraining
Specialty and Hospital Sales Force Investment81 Figure 2.1: Specialty Sales Force Budget Allocations
82 Figure 2.2: Hospital Sales Force Budget Allocations
84 Figure 2.3: Average Cost per Sales Rep (Specialty Sales)
84 Figure 2.4: Total Investment per Specialty Rep
85 Figure 2.5: Cost per Detail Including Samples (Specialty Sales)
86 Figure 2.6: Cost per Detail Excluding Samples (Specialty Sales)
87 Figure 2.7: Average Cost per Sales Rep (Hospital Sales)
88 Figure 2.8: Total Investment per Hospital Rep
89 Figure 2.9: Cost per Detail Including Samples (Hospital Sales)
89 Figure 2.10: Cost per Detail Excluding Samples (Hospital Sales)
Specialty and Hospital Sales Force Staffing92 Figure 2.11: Specialty Sales Force Expansion/Contraction Over the Last 12 to 24 Months
93 Figure 2.12: Percentage by Which Companies Expanded Specialty Sales Forces Over the Last 12 to 24 Months
(Companies that Expanded)
93 Figure 2.13: Percentage by Which Companies Contracted Specialty Sales Forces Over the Last 12 to 24 Months
(Companies that Contracted)
94 Figure 2.14: Planned Specialty Sales Force Expansion/Contraction Over the Next 12 to 24 Months
95 Figure 2.15: Percentage by Which Companies Plan to Expand Specialty Sales Forces Over the Next 12 to 24
Months (Companies that Plan to Expand)
95 Figure 2.16: Percentage by Which Companies Plan to Contract Specialty Sales Forces Over the Next 12 to 24
Months (Companies that Plan to Contract)
96 Figure 2.17: Percentage of Companies that Realigned their Specialty Sales Forces Over the Last 12 to 24 Months
97 Figure 2.18: Average Number of Reps per District Manager (Specialty Sales)
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CHARTS AND GRAPHICS98 Figure 2.19: Average Number of Reps per District Manager 12 to 24 Months Ago (Specialty Sales)
98 Figure 2.20: Ideal Number of Reps per District Manager (Specialty Sales
99 Figure 2.21: Average Number of District Managers per Regional Manager (Specialty Sales)
100 Figure 2.22: Average Number of District Managers per Regional Manager 12 to 24 Months Ago (Specialty Sales)
100 Figure 2.23: Ideal Number of District Managers per Regional Manager (Specialty Sales)
101 Figure 2.24: Hospital Sales Force Expansion/Contraction Over the Last 12 to 24 Months
102 Figure 2.25: Percentage by Which Companies Expanded Hospital Sales Forces Over the Last 12 to 24 Months
(Companies that Expanded)
103 Figure 2.26: Percentage by Which Companies Contracted Hospital Sales Forces Over the Last 12 to 24 Months
(Companies that Contracted)
104 Figure 2.27: Planned Hospital Sales Force Expansion/Contraction Over the Next 12 to 24 Months
105 Figure 2.28: Percentage by Which Companies Plan to Expand Hospital Sales Forces Over the Next 12 to 24
Months (Companies that Plan to Expand)
105 Figure 2.29: Percentage by Which Companies Plan to Contract Hospital Sales Forces Over the Next 12 to 24
Months (Companies that Plan to Contract)
106 Figure 2.30: Percentage of Companies that Realigned their Hospital Sales Forces Over the Last 12 to 24 Months
108 Figure 2.31: Average Number of Reps per District Manager (Hospital Sales)
108 Figure 2.32: Average Number of Reps per District Manager 12 to 24 Months Ago (Hospital Sales)
109 Figure 2.33: Ideal Number of Reps per District Manager (Hospital Sales)
110 Figure 2.34: Average District Managers per Regional Manager (Hospital Sales)
110 Figure 2.35: Average Number of District Managers per Regional Manager 12 to 24 Months Ago (Hospital Sales)
111 Figure 2.36: Ideal Number of District Managers per Regional Manager (Hospital Sales)
Sales Training115 Figure 2.37: First Year Training Costs for New Sales Reps (Specialty Sales)
116 Figure 2.38: Number of Hours of Training Given to Newly Hired Sales Reps (Specialty Sales)
116 Figure 2.39: Annual Training Costs for Average Veteran Rep (Specialty Sales)
117 Figure 2.40: First Year Training Costs for New Sales Reps (Hospital Sales)
118 Figure 2.41: Number of Hours of Training Given to Newly Hired Sales Reps (Hospital Sales)
118 Figure 2.42: Annual Training Costs for Average Veteran Rep (Hospital Sales)
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