Specialty and Hospital Sales Force Management

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

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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 doctors 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.

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CONTACT INFORMATION Adam Bianchi 919-433-0202 adam_bianchi@cuttingedgeinfo.com

SPECIALTY AND HOSPITAL SALES FORCE MANAGEMENT

TABLE OF CONTENTS
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12 13

Executive Summary
Methodology and Definitions Profiled Companies Pharmaceutical Sales Forces: Five Principles for Success

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45 59

Field Activities and e-Detailing

Maximizing Sales Rep Success Supplementing Sales Forces Efforts with e-Detailing

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Sales Force Investment, Staffing and Sales Training

Specialty and Hospital Sales Force Investment Specialty and Hospital Sales Force Staffing Sales Training

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112

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Sales Force Compensation

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KEY METRICS
Chapter 1: Field Activities and e-Detailing Chapter Benefits: Measure hospital and specialty sales reps 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 and influence prescriber habits. Stay ahead of the curve with the latest trends in hospital/specialty pharma sales (mirroring and rep-to-DM ratios, for example.) Improve segmenting and targeting practices. Organize your sales force to boost efficiency and maximize reps skills and talents. Master your understanding of e-Detailing costs and activities to increase effectiveness in reaching customers. The chapters data charts address the following topics and metrics: Field Activities Overall changes to district manager-to-rep ratios over the past 12 to 24 months Average number of reps targeting each level of physician Mirroring for top-, mid- and low-level targets Changes to average number of daily visits over the last 12 to 24 months Average number of target visits per day Average monthly visits per rep to tiers of prescribers Number of products carried by sales reps Rep time allocation Success rate of sales reps: percentage of the time and number of minutes that reps get to detail physicians face-to-face Cutting Edge Information

SPECIALTY AND HOSPITAL SALES FORCE MANAGEMENT

e-Detailing Annual investment in e-Detailing activities Allocation of e-Detailing budget by sales force type (by percentage) Allocation of e-Detailing budget by sales force type (in dollars) e-Detailing investment per sales rep Percentage of e-Detailing budget outsourced Types of e-Detailing delivered by surveyed companies Delivery methodologies for e-Details Lifecycle stage at which e-Detailing campaigns are most effective Levels of prescribers targeted by e-Detailing campaigns Presence of dedicated e-Detailing teams Chapter 2: Sales Force Investment, Staffing and Sales Training Chapter Benefits: Benchmark spending, staffing, and training resource levels and investments for both hospital and specialty sales reps. Right-size your sales force. Be attuned to changes in the overall sales landscape with detailed expansion/ contraction data. Stay abreast of emerging training trends and practices. Customize sales rep training to fit your unique company needs. The chapters data charts address the following topics and metrics: Sales Force Investment and Staffing Sales force budget allocations Average cost per sales rep Total investment per rep Costs per detail, including and excluding samples Cutting Edge Information

SPECIALTY AND HOSPITAL SALES FORCE MANAGEMENT

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 planning to contact.) 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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SPECIALTY AND HOSPITAL SALES FORCE MANAGEMENT

Chapter 3: Sales Force Compensation Chapter Benefits: Benchmark compensation to stay competitive and attract and retain top sales talent. Access metrics across the spectrum of reps experience levels. The chapters data charts address the following topics and metrics: Sales rep compensation by level of experience: newly hired, average and highperforming Compensation levels of average sales reps Percentage of compensation that is bonus for newly hired, average and highperforming sales reps District manager compensation by level of experience: newly hired, average and high-performing Percentage of compensation that is bonus for newly hired, average and highperforming district managers Regional manager compensation by level of experience: newly hired, average and high-performing Percentage of compensation that is bonus for newly hired, average and highperforming 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 Informations findings do not indicate that this trend is widespread. 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 more than two years ago. A shift of 0.2 is not significant enough to declare a trend, but it is worth noting that changes occurred in the opposite direction for each type of sales force.

Figure 1.17: Number of Products Represented by Sales Reps (Specialty Sales)

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Figure 1.18: 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 the generic equivalent being launched. 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 companys 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

SPECIALTY AND HOSPITAL SALES FORCE MANAGEMENT

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 certain specialties will require larger investments per detail than others, based on factors such as therapeutic area and product type.

Figure 2.5: Cost per Detail Including Samples (Specialty Sales)

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Figure 2.6: 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. The most sought-after reps, high performers, reap the benefits of being very talented at their jobs. As Figure 3.5 shows, high-performing specialty reps earn significantly more than do average reps at several companies surveyed. At Company 8, 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 quartile of performers to the top quartile in an attempt to further reward the group and 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 3.5: Compensation Levels of High-Performing Sales Reps (Specialty Sales)

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CHARTS AND GRAPHICS

Executive Summary
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Figure E.1: Allocation of e-Detailing Budget by Sales Force Type (Dollars) Figure E.2: Rep Time Allocation (Specialty Sales) Figure E.3: Rep Time Allocation (Hospital Sales)

Pharmaceutical Sales Forces: Five Principles for Success

Field Activities and e-Detailing

23 23 25 26 27 28 29 30 31 32 34 35 36 37 38 39 40 41 42 43 45 46 47 48 Figure 1.1: Overall Changes to District Manager to Rep Ratios Over the Last 12 to 24 Months (Specialty Sales) Figure 1.2: Overall Changes to District Manager to Rep Ratios Over the Last 12 to 24 Months (Hospital Sales) Figure 1.3: Average Number of Reps Targeting Each Level of Physician (Specialty Sales) Figure 1.4: Average Number of Reps Targeting Each Level of Physician (Hospital Sales) Figure 1.5: Mirroring For Top Targets (Specialty Sales) Figure 1.6: Mirroring for Top Targets (Hospital Sales) Figure 1.7: Mirroring for Mid-Level Targets (Specialty Sales) Figure 1.8: Mirroring for Low-Level Targets (Specialty Sales) Figure 1.9: Mirroring for Mid-Level Targets (Hospital Sales) Figure 1.10: Mirroring for Low-Level Targets (Hospital Sales) Figure 1.11: Changes to Average Number of Daily Visits over the Last 12 to 24 Months (Specialty Sales) Figure 1.12: Changes to Average Number of Daily Visits over the Last 12 to 24 Months (Hospital Sales) Figure 1.13: Average Number of Target Visits per Day (Specialty Sales) Figure 1.14: Average Number of Target Visits per Day (Hospital Sales) Figure 1.15: Average Monthly Visits per Rep to Tiers of Prescribers (Specialty Sales) Figure 1.16: Average Monthly Visits per Rep to Tiers of Prescribers (Hospital Sales) Figure 1.17: Number of Products Represented by Sales Reps (Specialty Sales) Figure 1.18: Number of Products Represented by Sales Reps (Hospital Sales) Figure 1.19: Rep Time Allocation (Specialty Sales) Figure 1.20: Rep Time Allocation (Hospital Sales) Figure 1.21: Success Rate of Specialty Sales Reps: Percentage of the Time Reps Get to Detail Physicians Face-to-Face Figure 1.22: Success Rate of Hospital Sales Reps: Percentage of the Time Reps Get to Detail Physicians Face-to-Face Figure 1.23: Success Rate of Specialty Sales Reps: Average Number of Minutes Reps Get with Targets Figure 1.24: Success Rate of Hospital Sales Reps: Average Number of Minutes Reps Get with Targets

Maximizing Sales Rep Success

Cutting Edge Information

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CHARTS AND GRAPHICS

60 61 62 63 64 67 68 69 71 74

Figure 1.25: Annual Investment in e-Detailing Activities

Supplementing Sales Forces Efforts with e-Detailing

Figure 1.26: Allocation of e-Detailing Budget by Sales Force Type (Percentages) Figure 1.27: Allocation of e-Detailing Budget by Sales Force Type (Dollars) Figure 1.28: e-Detailing Investment per Sales Rep Figure 1.29: Percentage of e-Detailing Budget Outsourced Figure 1.30: Types of e-Detailing Delivered by Surveyed Companies Figure 1.31: Delivery Methodologies for e-Details Figure 1.32: When e-Detailing Campaigns Are Most Effective Figure 1.33: Levels of Prescribers Targeted by e-Detailing Campaigns Figure 1.34: Dedicated e-Detailing Teams

Sales Force Investment, Staffing and Sales Training

81 82 84 84 85 86 87 88 89 89 92 93 93 94 95 95 96 97

Figure 2.1: Specialty Sales Force Budget Allocations Figure 2.2: Hospital Sales Force Budget Allocations

Specialty and Hospital Sales Force Investment

Figure 2.3: Average Cost per Sales Rep (Specialty Sales) Figure 2.4: Total Investment per Specialty Rep Figure 2.5: Cost per Detail Including Samples (Specialty Sales) Figure 2.6: Cost per Detail Excluding Samples (Specialty Sales) Figure 2.7: Average Cost per Sales Rep (Hospital Sales) Figure 2.8: Total Investment per Hospital Rep Figure 2.9: Cost per Detail Including Samples (Hospital Sales) Figure 2.10: Cost per Detail Excluding Samples (Hospital Sales) Figure 2.11: Specialty Sales Force Expansion/Contraction Over the Last 12 to 24 Months Figure 2.12: Percentage by Which Companies Expanded Specialty Sales Forces Over the Last 12 to 24 Months (Companies that Expanded) Figure 2.13: Percentage by Which Companies Contracted Specialty Sales Forces Over the Last 12 to 24 Months (Companies that Contracted) Figure 2.14: Planned Specialty Sales Force Expansion/Contraction Over the Next 12 to 24 Months 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) 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) Figure 2.17: Percentage of Companies that Realigned their Specialty Sales Forces Over the Last 12 to 24 Months Figure 2.18: Average Number of Reps per District Manager (Specialty Sales)

Specialty and Hospital Sales Force Staffing

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CHARTS AND GRAPHICS

98 98 99 100 100 101 102 103 104 105 105 106 108 108 109 110 110 111 115 116 116 117 118 118 Figure 2.19: Average Number of Reps per District Manager 12 to 24 Months Ago (Specialty Sales) Figure 2.20: Ideal Number of Reps per District Manager (Specialty Sales Figure 2.21: Average Number of District Managers per Regional Manager (Specialty Sales) Figure 2.22: Average Number of District Managers per Regional Manager 12 to 24 Months Ago (Specialty Sales) Figure 2.23: Ideal Number of District Managers per Regional Manager (Specialty Sales) Figure 2.24: Hospital Sales Force Expansion/Contraction Over the Last 12 to 24 Months Figure 2.25: Percentage by Which Companies Expanded Hospital Sales Forces Over the Last 12 to 24 Months (Companies that Expanded) Figure 2.26: Percentage by Which Companies Contracted Hospital Sales Forces Over the Last 12 to 24 Months (Companies that Contracted) Figure 2.27: Planned Hospital Sales Force Expansion/Contraction Over the Next 12 to 24 Months 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) 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) Figure 2.30: Percentage of Companies that Realigned their Hospital Sales Forces Over the Last 12 to 24 Months Figure 2.31: Average Number of Reps per District Manager (Hospital Sales) Figure 2.32: Average Number of Reps per District Manager 12 to 24 Months Ago (Hospital Sales) Figure 2.33: Ideal Number of Reps per District Manager (Hospital Sales) Figure 2.34: Average District Managers per Regional Manager (Hospital Sales) Figure 2.35: Average Number of District Managers per Regional Manager 12 to 24 Months Ago (Hospital Sales) Figure 2.36: Ideal Number of District Managers per Regional Manager (Hospital Sales)

Sales Training

Figure 2.37: First Year Training Costs for New Sales Reps (Specialty Sales) Figure 2.38: Number of Hours of Training Given to Newly Hired Sales Reps (Specialty Sales) Figure 2.39: Annual Training Costs for Average Veteran Rep (Specialty Sales) Figure 2.40: First Year Training Costs for New Sales Reps (Hospital Sales) Figure 2.41: Number of Hours of Training Given to Newly Hired Sales Reps (Hospital Sales) Figure 2.42: Annual Training Costs for Average Veteran Rep (Hospital Sales)

Sales Force Compensation

126 127 128 128 129 130 Figure 3.1: Compensation Levels of Newly Hired Sales Reps (Specialty Sales) Figure 3.2: Percentage of Compensation that is Bonus for Newly Hired Sales Reps (Specialty Sales) Figure 3.3: Compensation Levels of Average Sales Reps (Specialty Sales) Figure 3.4: Percentage of Compensation that is Bonus for Average Sales Reps (Specialty Sales) Figure 3.5: Compensation Levels of High-Performing Sales Reps (Specialty Sales) Figure 3.6: Percentage of Compensation that is Bonus for High-Performing Sales Reps (Specialty Sales)

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CHARTS AND GRAPHICS

131 131 132 133 134 134 135 136 136 137 138 139 140 140 141 142 142 143 144 145 146 147 148 148 149 150 150 151 152 152 Figure 3.7: Compensation Levels of Newly Hired Sales Reps (Hospital Sales) Figure 3.8: Percentage of Compensation that is Bonus for Newly Hired Sales Reps (Hospital Sales) Figure 3.9: Compensation Levels of Average Sales Reps (Hospital Sales) Figure 3.10: Percentage of Compensation that is Bonus for Average Sales Reps (Hospital Sales) Figure 3.11: Compensation Levels of High-Performing Sales Reps (Hospital Sales) Figure 3.12: Percentage of Compensation that is Bonus for High Performing Sales Reps (Hospital Sales) Figure 3.13: Compensation Levels of Newly Hired District Managers (Specialty Sales) Figure 3.14: Percentage of Compensation that is Bonus for Newly Hired District Managers (Specialty Sales) Figure 3.15: Compensation Levels of Average District Managers (Specialty Sales) Figure 3.16: Percentage of Compensation that is Bonus for Average District Managers (Specialty Sales) Figure 3.17: Compensation Levels of High-Performing District Managers (Specialty Sales) Figure 3.18: Percentage of Compensation that is Bonus for High- Performing District Managers (Specialty Sales) Figure 3.19: Compensation Levels of Newly Hired District Managers (Hospital Sales) Figure 3.20: Percentage of Compensation that is Bonus for Newly Hired District Managers (Hospital Sales) Figure 3.21: Compensation Levels of Average District Managers (Hospital Sales) Figure 3.22: Percentage of Compensation that is Bonus for Average District Managers (Hospital Sales) Figure 3.23: Compensation Levels of High-Performing District Managers (Hospital Sales) Figure 3.24: Percentage of Compensation that is Bonus for High- Performing District Managers (Hospital Sales) Figure 3.25: Compensation Levels of Newly Hired Regional Managers (Specialty Sales) Figure 3.26: Percentage of Compensation that is Bonus for Newly Hired Regional Managers (Specialty Sales) Figure 3.27: Compensation Levels of Average Regional Managers (Specialty Sales) Figure 3.28: Percentage of Compensation that is Bonus for Average Regional Managers (Specialty Sales) Figure 3.29: Compensation Levels of High-Performing Regional Managers (Specialty Sales) Figure 3.30: Percentage of Compensation that is Bonus for High Performing Regional Managers (Specialty Sales) Figure 3.31: Compensation Levels of Newly Hired Regional Managers (Hospital Sales) Figure 3.32: Percentage of Compensation that is Bonus for Newly Hired Regional Managers (Hospital Sales) Figure 3.33: Compensation Levels of Average Regional Managers (Hospital Sales) Figure 3.34: Percentage of Compensation that is Bonus for Average Regional Managers (Hospital Sales) Figure 3.35: Compensation Levels of High-Performing Regional Managers (Hospital Sales) Figure 3.36: Percentage of Compensation that is Bonus for High Performing Regional Managers (Hospital Sales)

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REPORT LINKS
More Cutting Edge Information Reports:
Reinventing Pharmaceutical Sales Forces http://www.cuttingedgeinfo.com/research/sales/reinventing-sales-forces/ Canadian Pharmaceutical Sales Management http://www.cuttingedgeinfo.com/research/sales/canada-fieldmanagement/ Pharmaceutical Sales Training Groups http://www.cuttingedgeinfo.com/research/sales/sales-training/

US Managed Markets http://www.cuttingedgeinfo.com/research/market-access/strengthenpayer-relationships/

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