Sales Force Size Continues Up--Or Does It?
Executive Summary
While some companies have seen dramatic increases in the last year-at least half of the companies with more than 1050 reps have decreased the size of their forces since 1995, including BMS, at least prior to its most recent announcement.
At the beginning of this year, we noted that BMS’ then-recent decision to add 370 sales reps reflected a wider trend in the drug industry toward slightly larger sales forces, according to data from Scott-Levin Associates. The increase, from 37,281 reps industry-wide in 1994 to 37,925 in 1995, followed two consecutive years of declines from an industry-peak of 40,289 in 1992.
BMS’s most recent announcement that it is increasing its worldwide sales force by 2,100 also seems illustrative of broader industry trends. After the modest rise in the number of reps in ‘94-‘95, industry-wide growth through September 1996 was a strong 6%, to 40,337 reps.
But the impression that the entire industry is moving toward larger sales forces is misleading. While some companies have seen dramatic increases in the last year—Abbott (22%), for example, or Sandoz (69%) and SmithKline (31%)—at least half of the companies with more than 1050 reps have decreased the size of their forces since 1995, including BMS, at least prior to its most recent announcement.
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In the May, 1996 issue of IN VIVO, future pricing of our product, Doxil, is discussed. Specifically, the article states that “if Sequus maintains pricing as is, which is doubtful, then Doxilfor solid tumors will cost $1800 - $2400 per cycle.” Clearly, these comments regarding Doxil are speculative and do not take into consideration important issues such as patient benefits, efficacy, dosing and pharmacoeconomics.
Furthermore, the article makes additional incorrect statements regarding the effect of pricing on people with AIDS. After eight months availability, the patients and their physicians treating Kaposi’s sarcoma have overwhelmingly elected to use Doxilas their drug of choice, despite the presence of a lower priced competitor. The feedback from both patients and their physicians confirm that Doxil is a valuable addition to their KS treatment armamentarium. We at Sequus have made every effort to develop a safe and effective treatment for KS patients and will continue to provide it at a fair price.
The article continues with quotes from Pat Mahaffy, CEO of NeXstar. It is perfectly reasonable to quote a CEO to discuss his or her own product’s pricing and even to discuss pricing relative to competing products. Sequus believes that it is inappropriate to allow comments from a competing CEO regarding the market’s reaction to a competing product’s price, particularly when those comments are inaccurate and self-serving.
Standard editorial practice calls for the author(s) to check facts with the affected company before printing the information. Such actions are beneath the high standards of journalism that we have come to expect from IN VIVO.
L. Scott Minick
President and Chief Operating Officer