Thursday, October 23, 2008

Merck Cuts 7,500 Jobs

Yesterday, drug giant, Merck, announced that it was cutting 7,500 jobs, and it’s a sure bet that most of those job eliminations will be in the sales positions. The unfortunate sales reps who lose those jobs will feel acute loss in their income and maybe even their lifestyle, but the brutal fact is that they will not be missed by either their company (Merck) or the physicians and the greater medical community.

Imagine yourself going to four different Walgreen drugstores just to purchase toothpaste, toilet paper, aspirin, and body lotion— because no single store can sell more than one item. That’s analogous to the relationship that has evolved between the doctors and the drug companies. By duplicating and triplicating the sales presence in every medical office and clinic, the drug companies reasoned that each doctor could be bombarded with three or four sales pitches from the same company in the time that it usually took to get in one good pitch. Each sales rep would sell just one or two drugs rather than having one rep sell six or seven drugs. But, like most big ideas that get spawned in upper management, the plan totally failed to consider the needs and wants of the customer. As a result, physicians simply stopped fielding sales pitches altogether.

My personal physician told me that she limits herself to seeing no more than eight sales reps in any single day. She averages about 25 per week, or 100 per month, but nearly all of those so-called “sales visits” are nothing more than sample drops lasting two or three minutes. Drug industry internal statistics show that the average pharmaceutical sales call results in less than five minutes with the prescribing physician. I retired from a job in pharmaceutical sales ten years ago, and back in the good old days my sales visits averaged 25 minutes, and I sold every drug in the company product portfolio. But now, Big Pharma with their manager-driven big idea has managed to alienate the medical community, and has pretty much made their sales force irrelevant to the product promotion process. That’s why companies like Merck can feel comfortable with 7,500 person layoffs.

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