It's no secret drugmakers have been hiring sales reps by the dozen in emerging markets. As sales in mature markets stagnate, they're growing by leaps and bounds in developing countries such as Brazil, China and India. So, Big Pharma has been laying off thousands of reps in the U.S. and Europe, while throwing open the doors to potential salespeople elsewhere.
And now, those new reps are crowding the doors of doctors' offices looking to hawk their wares. Pharma reps are ubiquitous in India, where some overwhelmed doctors limit drug pitches to 20 seconds each, as Bloomberg reports. And reps wait for hours for that privilege.
Drugmakers from Pfizer ($PFE) and GlaxoSmithKline ($GSK) to Ranbaxy Laboratories and Dr. Reddy's added more than 6,000 to their sales forces over the fiscal year that ended March 31, Bloomberg found. Experts predict there will be at least three reps for every 10 doctors by 2020. Labor costs have increased by an average of 27%, in part because of the high salaries needed to retain sales reps as drugmakers poach each other's sales forces.
The question now is whether this frenzy of hiring ends up forcing cuts later. Drugmakers might find themselves in a position similar to the U.S. sales-rep glut of more than a decade ago, when doctors started complaining they saw way too many reps from the same company (and way too often). Some pharma analysts think the hiring will at least slow in the near future. "Peer pressure has forced some companies to add more people than they are comfortable with," Nitin Agarwal of IDFC Securities told Bloomberg. "At some stage, you're going to get no more gain from adding people. I think we should be close to that point now."
- read the Bloomberg story