It’s clear that pressure on the size of sales forces will continue. And as industry increasingly moves to targeted therapies, the change in focus from the primary to the specialist sector will compound this pressure.
It doesn’t make sense to have a large sales force dedicated to long- established products that have no new clinical information or are about to go off patent.
There are implications here for industries that have a symbiotic relationship with the pharma sector. PR and marketing consultancies that have traditionally had large health practices are now typically looking to diversify. This is because business from the pharma sector is decreasing, not only as a result of expense reductions, but also because the increasingly stringent Medicines Australia Code limits promotional activities.
Outsourcing trends up
August AFT estimates show that up to 25 per cent of the Australian workforce can now be classified as ‘contingent’ – freelancers, temporaries, etc. A change in the nature of the workplace, with the increased use of ‘hot desking’ to reduce accommodation costs, is another trend likely to increase.
Companies are reducing internal resources and relying increasingly on external sources. Because of the breadth of their activities, contingents often bring a greater degree of expertise than internal sources.
Opportunities for consultants focusing on the regulatory, health outcome and government space will likely increase. And many ‘refugees’ from big pharma find attractive and profitable niches, either working alone or with colleagues specialising in value adding.
Most majors have increased their focus on emerging markets and ramped up resources accordingly, although areas such as government relations are in short supply. Acquisitions are common, as are strategic partnerships, particularly in the generic space. Both Pfizer and GSK have made a number of partnerships and have shown they are prepared to decrease prices and make a volume trade off.
The next few years will see trench warfare. A lack of new products and government pricing pressure will make other sectors potentially more attractive.
As a result the industry is entering a period of slow growth and the challenge now for Australian senior executives will be how to retain an engaged workforce.