Is this the excuse they needed?

Is this the excuse they needed?

It’s well known that management and the field sales force don’t exactly see eye to eye. Management basically believes sales reps are lazy, over-paid and a bunch of crybabies. Sales reps see management as bunch of overpaid morons who haven’t a clue as to what the real world is like. We all remember our good buddy Serge throwing the Sanofi (NYSE: SNY) sales team under the bus when sales of Lantus began declining. Heaven forbid that Serge acknowledge that it was management that screwed this up by not having anything close to a strategy.

And as we have seen with the recent Novo Nordisk (NYSE: NVO) settlement sales reps aren’t angels either. It may have been management that came up with this illegal scheme but that does not mean sales rep had to participate in something they knew was clearly illegal. And let’s be honest Novo reps aren’t the only reps who have broken the law.

The question is with the diabetes drug market commoditizing, with payors controlling the keys to the kingdom is there a need for a field sales force anymore. Keep in mind that it’s very expensive keeping a rep in the field and given the ultra-competitive nature of the diabetes drug category every dollar saved is huge.

Would it not be a wiser allocation of dollars concentrating on payors? Given the current state of the market and the all new laws, i.e. the Sunshine Act, could not technology replace what the sales rep used to do? Is it necessary to have an army of reps anymore?

Listen we have lots of friends in sales but the reality is when it comes to diabetes drugs there is no need for a large field sale force. Think of the money Novo, Sanofi or Lilly (NYSE: LLY) would save without having to support a large field sales team. Think of the time saved from not having to manage this large field force. The fact is when looked at strictly from a cost/benefit analysis the cost outweighs the benefit and therefore this cost should at minimum be reduced at maximum eliminated.

This is exactly what happened in the conventional glucose monitoring space and should be repeated in the diabetes drug space. We know this is not what reps want to hear but it is also what they know to be true.

It will be interesting to see which of the diabetes drug companies is bold enough to make such a move. Keep in mind we are not talking a simple downsizing, no we are talking about eliminating or nearly eliminating the sales team entirely. A move which some may consider drastic but that would be old school thinking. The fact is technology can do everything a sales rep does only cheaper.

Also note that this strategy would not work for every company, just the ones who need the savings the most the big guys who are looking to save any money they can. Lilly, Novo, Sanofi, AstraZeneca (NYSE: AZN), Johnson and Johnson (NYSE: JNJ) and Merck (NYSE: MRK) are in fierce fight. Payors are demanding and quite frankly expecting deeper discounts and higher rebates. Lawmakers are holding hearings on how these drugs are priced. State Attorney Generals are gathering information for their eventual lawsuits.

Is this not the perfect scenario for these companies to make this move?

Listen we’ve been around this wacky world for many years and have seen the rise and now fall of the field sales force. Yes, there WAS a time when these companies needed and could afford an army of reps. However, those days are long gone and it’s time to completely break from the past.

As Momma Kliff noted yesterday change is never easy but change is what’s needed.