New sales models are trendy in Big Pharma. Actually, they're de rigueur: With thousands fewer drug reps on the street these days, and many doctors turning reps away, companies have had to turn to new ways of promoting their products. Plus, all those pesky Department of Justice settlements make the old hard sell seem sketchy.
What's Eli Lilly's version? According to an interview with Alex Azar, president of the Indianapolis-based company's U.S. business, it's problem-solving.
As InsuranceNewsNet reports, Lilly ($LLY) sends its 2,000-plus U.S. reps into doctors' offices to "broker" solutions to patients' problems. They take lists of patient issues and draw on Lilly's resources to help solve them. Free samples and copay coupons, of course, but also helping ensure supplies of particular meds to a particular patient's pharmacy, or troubleshooting another patient's uncommon reaction to a Lilly product, by hooking a doctor up with a Lilly scientist.
The MBA-speak technical term is "service-profit chain," and in adopting it, Lilly is taking a page from the playbook of service-oriented companies like Disney and Ritz-Carlton. (The company even sent reps to Disney World to see the model in action.)
The aim is twofold: First, give doctors good experiences with Lilly, to promote loyalty--and, not incidentally, boost script numbers. "The better experience your customer has, the more likely they are to recommend your drug to the patient," Azar told InsuranceNewsNet.
Second, boost margins by fielding fewer sales reps. It's something of a necessity, actually, with Lilly having laid off a big chunk of its field force over the past several years--and expecting sales to be stagnant at best for 2014.
Lilly has been experimenting with the problem-solving sales approach for several years, starting with older products such as Cymbalta, which went off patent in December, InsuranceNewsNet notes in its extensive look at the new approach.
The company started cutting back its Cymbalta sales force early last year, prepping for the day when generic competition would hit like a sledgehammer. Meanwhile, Lilly figures the softer sell helped the drug keep growing--significantly--right up until that day of doom. Some of that growth did depend on price hikes, but FiercePharma data shows that Lilly managed to generate millions of new scripts as well.
Lilly handed over data on three of its drugs to InsuranceNewsNet, which found that doctors who rated their experiences with Lilly reps most highly also wrote 13% more prescriptions for Lilly products. But territorywide results have been more mixed; one of the highest-rated regions fell short, prescription-wise. That shows the difficulty of one pharma company's distinguishing itself from all its rivals, Azar admitted to InsuranceNewsNet.
"We are beating the competition on every significant area when it comes to how we are perceived," he told the publication. "But we have not achieved a genuinely different experience."
One problem may be that all of Lilly's competitors are looking to achieve their own new-and-different relationships with doctors. GlaxoSmithKline's ($GSK) U.S. business has revamped sales-rep compensation, partly to tie incentive pay to physicians' perceptions of GSK reps. Other companies have been using the sales-consultant approach, too. Azar knows this, but he also believes that Lilly can do it better: "Not every pharma company is making it with the vigor that we are," he told InsuranceNewsNet.
- read the full InsuranceNewsNet story
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