Article

Shamsul Islam
Founder & Managing
Director – Tranz- Life

Why Pharma companies should prefer Contract Sales Promotion – The Pakistan Perspective

by Shamsul Islam

In today’s challenging environment in Pakistan, the pharmaceutical industry is under tremendous pressure as a result of shrinking margins and difficulties in satisfying scientific needs of customers with limited M&S budgets. As such, in recent years we have witnessed many Multinational Pharmaceutical companies closing down their operations in Pakistan or selling their brand royalties to local companies.

In a typical Pharmaceutical P&L, companies allocate almost 70% of their operational budget under ‘Field Force’ cost center specifically allocated to Head Counts (HCs) and field related activities. In an MNCs environment, getting additional HCs approvals from the HQ or the regional office has always been a challenge, especially if you require additional HC to support your new launches or desire to increase the share of voice through more feet-on-the-ground. On the contrary, shrinking margins push companies to reduce costs by eliminating HCs.

The ‘flexibility’ in sales operations for adding additional reps when you need more feet-on- the- ground or releasing them when you have a cost pressure is often impossible when the entire sales operation is in-house. Pharmaceutical companies may achieve added value in their sales operations by using sales force outsourcing strategically and tactically. Reasons being ‘Contract Sales Force’ is considered a variable cost in P&L vs. in-house field force, which is a fixed cost.  By considering sales force outsourcing, companies can respond more quickly to change in circumstances without being constrained to their internal challenges.

The ‘Contract Sales Organizations (CSO)’ industry has long been in service globally with the leading CSOs—among them, Ashfield Commercial & Medical Services, Quintiles, inVentiv Health Selling Solutions, Publicis Touchpoint Solutions and PDI—show them to be trying out new business models, broadening their palette of service offerings and making internal investments in new technology platforms.

Overall, the business advantage of CSOs, from a cost-per-rep basis, remains the ability and flexibility to “dial up and down” the rep head count, based on the duration of a contract with a pharma client.  “Flexibility and quality—those are the two things which can address the recent challenges faced by pharma companies.

The proportion of outsourced reps vs. in-house reps represents about 15% of the US Pharma Sales Force and almost the same in Europe. In our neighboring India, many large Indian and multinational pharmaceutical companies – including Novartis, Cipla and Ranbaxy – already use CSOs to varying extents. The Indian pharmaceutical market has been growing rapidly in the past few decades. In order to maintain the rapid growth in the market, companies have realized that they will need to target a wider geographic area. In order to reach more rural areas, these companies are likely to use CSOs. Geographic expansion of the domestic pharmaceutical industry is set to be the major driver for growth in the Indian contract sales market in the period 2011-2021.

In the Pakistan Pharma market, the key growth drivers for business will remain the feet-on -the-ground, geographical expansion and an increase in disease incidence and prevalence, as well as a greater affordability of branded medicines.

Tranz-Life is a true CSO, being the first in Pakistan offers flexible alternates comparable to global CSOs to meet the challenges – the ability and flexibility to ‘dial up and down’ the rep headcount, equipped with state-of-the-art real-time reporting SFE solutions and experienced team to manage your portfolio for your desired KPIs.  Tranz-Life offers services to all aspects of the product life cycle. That can range from a few months of making calls on primary-care physicians for a product/portfolio, to highly specialized, experienced sales teams for the high-tech biological brands. Often the companies have brands in the portfolio, yet a cash cow but ignored due to shift of resources to other strategically important brands, Tranz-Life is ultimate solution for extending the life cycle of your brands no matter it is a new launch, mature or a declining brand.