Pfizer's Sales Force to be Cut

The world's biggest drug manufacturer Pfizer Inc. plans to make a 20% cut in its US sales force. This move was said to be brought about a need to align sales organization to protect business and consumer interest.

Currently employing 100,000 people worldwide including 34,000 medical representatives, Pfizer has the largest sales force in the industry. Controversies have long been surrounding the need of major drug firms for a big sales force.

Currently, the industry is overcrowded with reps whose calls only averages around 1.5 minutes per physician. In addition to this, sales and marketing costs have risen from 20 percent to 25 percent while sales revenues declined from a high of 15 percent to 5 percent per year since 1990.

Analysts believe that Pfizer's plan cutbacks will benefit the industry in the long term. If Pfizer pushes through, smaller drug firms like Wyeth and Bristol-Myers Squibb might follow suit.

The drug manufacturing industry is just recently feeling the impact of high sales costs. Drug makers would rather spend their revenues on drug research and development than on promotion and marketing.

But even with the need for sales force cutbacks, some drug manufacturer may still keep a considerable number of medical representatives to handle their new products as well as the products that are yet to be introduced to the market. They maintain that the salespeople has an edge over other methods of promotion.

Following the rumors, shares in Europe's leading drug manufacturers went up, with GlaxoSmithKline Plc, the world's second-biggest drug manufacturer, adding 2.5 percent, AstraZeneca Plc 2.1 percent and Sanofi-Aventis 1.5 percent. Pfizer shares, on the other hand, picked up by 1% to $27.33.

Pfizer’s products include antidepressant Zoloft, antibiotic Zithromax, cholesterol-lowering drug Lipitor, pain reliever Celebrex, smoking-cessation product Chantix and inhaled insulin Exubera.