- Source : Press Release
- Date : 2020-11-09
- Companies : Roche
Multinational Drugmakers to Downsize Salesforce Amid Covid-19
A prolonged outbreak of the Covid-19 is forcing multinational pharmaceutical companies to use early retirement program (ERP) to reduce the number of drug sales representatives.
Sanofi, Lilly Korea, and Roche Korea have recently announced that they would operate ERP on all or part of salespersons.
Sanofi plans to encourage some drug sales reps in the chronic disease business to choose early retirement. Lilly is pushing for ERP to reduce the number of drug reps by 20 percent. Roche Korea also said it would apply ERP to salespersons, sources said.
According to industry sources, the multinational pharmaceuticals' move to cut the number of salespersons in Korea had been predicted. Even before the Covid-19 pandemic, the companies started to redirect investment from the workforce for sales to digital marketing to adapt to changes in the local sales and promotion environment.
According to data by IQVIA, a market research firm, pharmaceutical companies' investment in digital channels increased 17.1 percent on-year in 2019, but that in drug reps inched up 6.1 percent.
Also, healthcare professionals are increasingly choosing digital platforms over offline meetings with drug reps.
IQVIA data showed that the proportion of local healthcare professionals who prefer online and digital drug promotion increased from 18 percent in 2018 to 28 percent in 2020. Simultaneously, their preference for in-person meetings declined from 29 percent in 2018 to 24 percent in 2020.
Industry sources said Covid-19 prompted the drug companies to allocate more investment in non-contact promotion channels and pushed up client physicians' preference for digital tools.
However, salespersons at the pharmaceutical firms with imminent ERP said they could not predict the downsizing because the pharmaceutical sector was one of the rare industries that remained almost intact from the Covid-19 pandemic. Some companies showed even better performances this year, they said.
One drug representative at one of the three firms with ERP plans said, “I've been working for my company for nearly a decade. Our sales did not even plunge after Covid-19, but I'm sad because the company is treating me like a useless person and telling me to leave.”
Another salesperson said some pharmaceutical firms do not even have a labor union to check if conditions for ERP are legitimate.
“People say sales jobs can be insignificant, but I feel like I'll be kicked out on the street overnight,” he said.
The domestic pharmaceutical market's combined sales increased 5.3 percent to 5.64 trillion won ($5.06 million) in the first quarter, compared to the same period of last year, IQVIA said.
“Many institutions had predicted that Covid-19 would slow down the growth of the local pharmaceutical market. But the sector achieved better-than-expected results, as the first-quarter sales and growth rate showed,” IQVIA said.