Drug companies appear to be cutting back on cost of sales through a combination of layoffs and hiring younger sales reps.

A recent article on Forbes.com stated,

Cost cutting is likely to continue for large-cap pharmaceutical companies in 2007 and cuts in international sales forces could be a further source of savings, according to Banc of America analyst Chris Schott. “When we look at the ratio of sales per rep between regions,” Schott wrote, “Pfizer’s international reps are only 35-40% as efficient as its U.S. force.” He argued that a significant international sales force cut makes sense. He estimates that a 30% cut to the international team could eliminate $800 million in annual costs. “Longer term, we believe Pfizer’s mid-to-late stage pipeline is underappreciated by the market, consistent with our buy rating,” Schott wrote.

According to PharmaGossip:

With these cuts expected to be completed by the end of 2006, Schott believed Pfizer has the further opportunity to slash headcount among its 20,000 international reps, based on his analysis of sector sales force efficiency.

When asked on the Cafepharma message board if he plans to stay in the pharmaceutical industry, a laid-off sales rep responded:

Not staying in this industry. I find the thought of hanging out in a clinical area hallway, waiting for a signature along with all the other reps….totally revolting. I am getting a sales position where I have appointments and deliver a full, professional, sales presentation. Big Pharma is for the young, straight out of college females….just like my old DM says. The sooner you come to grips with the new reality….the better off you will be in the future.

It’s time for a new career. I would contemplate a highly specialized pharma position with a smaller or start up company where I had more responsibilities and the ability to use my brain. The way Big Pharma is presenting its sales reps….they really shouldn’t require a college degree so they can start reps in the 28K to 35K range. Think of all the money Kindler would save!!!

Yep, I can see it now: Jeff Kindler cruising the high schools for cheerleaders who’ll cheer for Big Pharma for $6 an hour. Who knows; maybe pharma sales will be the paper route of the future for high-spirited teenage girls.

 

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