Forget Merck's ($MRK) plans to recruit Chinese sales reps en masse. The company has decided to change its strategy. As Bloomberg reports, Merck will seek out local partners to promote drugs to doctors rather than hiring a bunch of new sales folks.
"The conventional thinking was that a linear increase of the sales force will generate a linear increase of revenue," Merck's China chief Michel Vounatsos told the news service. "I don't believe in this model. We are very happy with the number of sales representatives we have now."
Merck had been hiring in China, Brazil and Russia as it seeks to expand sales in emerging markets, particularly China, where it aims to boost revenues with double-digit yearly growth. Currently, 3,500 of Merck's 5,000 employees in China are sales folks, with 1,000 of them added since 2009, partly through the acquisition of Schering-Plough. Meanwhile, Merck was reducing headcount in sales in mature markets such as the U.S. and Europe.
That's been a familiar approach in Big Pharma lately, as everyone from Eli Lilly ($LLY) to Pfizer ($PFE) to Sanofi ($SNY) has laid off salespeople in developed markets and diverted resources to staff up in China, as well as other emerging markets. But Merck is tweaking that strategy, partly with a new emphasis on education. For instance, the company has attracted more than 185,000 Chinese doctors to an educational website, and it's sponsoring training events at community clinics. "It translates into appreciation and good image for the company," Vounatsos said.
- see the Bloomberg story
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