The Role Of Medical Representatives In Rm Marketing Essay

In Relationship marketing, role of Medical representative is changing. Medical representative is the pharmaceutical missionary sales person (FIG: 1.9), or drug representative who provides information on drugs and product samples to physicians. Also, it is the pharmaceutical representative who keeps an eye on the physician’s prescribing pattern in a particular area and get back to his or her company with the details. Pharmaceutical representative works for a single or a group of drugs and meet the physician’s practising in that specific field only.

A medical representative is naturally expected to achieve the product-wise, unit-wise and value-wise sales target monthly and cumulatively. A Medical rep. is a vital communication link between the drug manufacturer and the medical professional. He is the most reliable source of feedback on what is happening to company’s products in the competitive market, customers perception and sales strategies etc. Medical representative act as a link between a company, stockiest and customers and ensures the smooth working of the network.

Now days, Indian pharmaceutical companies are outsourcing a portion of their medical representative work force, in a bid to become more competitive. The move supports expansion into newer geographies in the domestic market and could be aimed at reducing the hold of trade unions. Also, outsourcing medical representatives can prove to be cost effective as Pharma Company has a zero liability and moreover it’s the medical rep., who is responsible for sales through good relationships with medical practitioners.

Issue of medical sales force outsourcing.

Bangalore based Charak pharma was among the first companies in India to outsource medical representatives through franchisees. According to industry sources, the companies Uttar Pradesh’s franchise employs over 50 medical representatives, while its Chennai franchisee employs around 40 medical representatives.

According to a National Trade Union, Federation of Medical and Sales representatives association of India (FMRAI) – In India, Novartis, e-Merck, USV, IDPL, Jagsonpal, Cipla, Ranbaxy labs and Nicholas primal outsource part of their sales force to third parties.

Mr. Akshay Nath, executive director, Innovex opines that hiring contracted medical representatives also allows pharma companies to break trade unions, once a very strong force in the industry. The contract sales organization is fully responsible for hiring representatives. The appointment letters is from contract sales organization wherein the medical representative can work for any client with whom contract sales organization ties up.

R.B. Smarta, MD, Interlink (marketing consultancy) opined that many MNC’s in India such as e-merck too are outsourcing medical representative’s work. MNCs cannot increase their manpower in India due to budget constraints and hiring contracted medical representatives allows them to expand their reach in the market without taking the liability associated with hiring new people.

Amit Guha, joint general secretary, FMRAI had told that Nicholas Piramal also works with franchisee to promote some of its established products and the company had given number of its old products to a franchisee named Jeevan, where the medical representatives do the same work as the direct medical representatives of the company but are maintained under contract.

Amar lulla Joint Managing Director, Cipla had told that CIPLA too has outsourcing part of its medical representatives through franchisee for a certain segment reach, but they will however represent less than 5% of their 3000 sales force.

However, while outsourcing medical representatives, provides flexibility to pharmaceutical companies and can be more effective but benefits are not always there. Doctors take time to acknowledge the third party selling the products for a client and relationship between medical representative and doctor may not be profitable because of high expectations of doctors. Pfizer’s experience was not conclusive either. The company entered into an agreement with Innovex in 2003 to hire around 100 people to promote tail-end products, which has a turnover of about Rs 100 crore. Since then, the company no longer works with third parties to promote its products.

Even the legal position of such contractual work has also been challenged by FMRAI in court, as outsourcing medical representative’s leads to a significant deterioration of working conditions in many cases as their salary is less and no job security is available. So, contracting medical representatives raises major organizational issues, while it offers flexibility and cost advantages pharma companies will have to look at new alternatives to reach to new territories and segments. The nature of sales force management is changing and challenging. The increasing unionization of medical representatives, militant attitude and approach of some of their associations are causing concern to managements.

MEDICAL REPRESENTATIVE UNIONS AFFECTING RELATIONSHIPS

As medical representatives are our focal point, while studying relationship marketing, as discussed earlier that they, as field sales force are responsible for maintenance and enhancement of profitable relations. So it is necessary to have a study about their social, political aspects apart from professional. The unionization of medical representatives is a big issue in Indian pharmaceutical industry.

Though there are few medical representative unions in states and at national levels but FMRAI (Federation of Medical representatives of India) is the largest one. FMRAI was first formed at Hyderabad in 1962 where it aimed to improve living conditions of the Medical Representatives. It has traveled a long way in building itself as real trade union body, form the idea that the medical representatives are not workers but somewhat like managers to demand and agitate for recognition as workmen took almost a decade. The management of the pharmaceuticals industry always isolated the medical representatives from the other workers in the factory and office. There was inhibition from the medical representatives also to consider themselves as a workman. 

 It was found that the services of the medical representatives (popularly known as field workers) were not regulated under any law. Whenever any attempt of organising was made, the employers used to embark upon them with all kinds of attack. Termination of services particularly those of the leaders was a regular phenomenon. FMRAI demanded of the Govt. to recognise the medical representatives as workmen by clearly defining in the Trade Union Act. It was a lengthy struggle. In 1976 when the democracy of the country was shadowed under state of emergency, a law was enacted as Sales Promotion Employees’ (Conditions of Service) Act which was applicable to those medical representatives whose monthly earning was only Rs.650 per month. This deprived a vast number of medical representatives out of the purview of the Act. FMRAI demanded the Govt. to remove the wage ceiling from the Act. Meanwhile, FMRAI in its conference in 1978 included sales representatives of other industries also and demanded the Govt. to extend the benefit of the Act to sales representatives of all industries. In pursuance of these demands FMRAI staged nationwide agitation and several rallies were staged before the Parliament at New Delhi. The Govt. ultimately removed the salary ceiling for the Medical and Sales Representatives who are legally known as Sales Promotion Employees, but the Govt. agreed to extend the benefit of the law only for 11 industries which FMRAI did not agree. FMRAI formulated a 27 point common charter of demands which consists of not only extension of benefits of all labour laws for the field workers but also demands for the people on medicines.

 Nearly 40 large companies including multinational drug companies have recognised FMRAI as trade union for their field workers and regularly signs wage agreement. Regular meeting on day to day grievances of the field workers is also held with these companies. In regional level, some smaller companies also recognise FMRAI through its Zonal Committees.

 FMRAI has become the only national organisation for the field workers in the country having functioning centres known as local units in 300 cities and towns of the country. Its membership has reached nearly 40,000. FMRAI associates its activities with several central trade unions of the country and its members participate to the national programme when jointly called by the central trade unions.

 FMRAI has also joined All India People’s Science Network (AIPSN) which is a national organisation for science movement. AIPSN actively work in the areas of health and pharmaceuticals. Jointly with AIPSN and with its own initiative, it has campaigned for a Rational Drug Policy and is considered as an important policy critic on Pharmaceuticals Policy of the Government.

FMRAI in the sates actively worked with health action groups and local branches of Indian Medical Association, convened seminars, conventions and other campaigned in different occasions. It has several publications on the health and drug situation of India. It is the only national trade union which observed nationwide strike against attempt of changing the patents act.

There are also some parallel associations and unions working in every state which are also communicating and helping each other in achieving their goals.

MARKET

-C&F agents

-Wholesalers

-Retailers

PATIENTS

(End users)

DOCTOR

(Customers)

Pharmaceutical

Company

PHARMACEUTICAL

COMPANY REPRESENTATIVE

(M.R)

(FIG: 1.8) Pharmaceutical marketing representative interactions

PHARMACEUTICAL RELATIONSHIP MARKETING MODELS:

Evert Gummesson in his book had described thirty types of relationships marketing which exist in the market directly or indirectly in various contexts has been already mentioned earlier. Though many experts had developed and discussed many models of relationship marketing but only few are relevant in pharmaceutical industry as per our study.

In this section we will discuss three relationship models which are felt relevant within the pharmaceutical market. They are as follows –

The interaction model of buyer-seller relationships.

In the interaction model the relationship of two organizations – the buyer and the seller is analysed. According to this model the relationship corresponds to a series of interactions between the parties. Fig: 1.9 shows the Interaction model of buyer – seller relationships.

Figure1.9: Interaction model of buyer – seller relationship

(Source: simplified scheme of CAMP-bell (4), p.268.)

The interaction model (fig: 1.9) is based on the following statements:

Both the buyer and seller are active participants in the market; both of them make efforts to find the suitable partner in order to achieve the goals.

These relationships are long term, close involving a complex pattern of interactions between and within each organization. It is more than simple sale or purchase.

The links between buyer and seller often becomes institutionalized in to a set of roles that each party expects the other to perform. Adaptations often occur when one of the parties makes modification in the product, in financial arrangements or in inventory routines etc.

The interaction model assumes continuous supply of the products.

The whole interaction process is embedded in the interaction environment. The environment has several aspects like the market structure, dynamism, internationalization, position in manufacturing channel and the social system. In the business environment the buyer’s involvement in the product development process has also an effect on the interaction.

In pharmaceutical market, the market characteristics (strict regulations) and the product’s special characteristics have dominant impact on the relationships.

The Key account management model of relationship.(KAM)

The technology had enabled us to reach maximum customers and consumers and get hold of their database to be utilized as per our convenience. The K.A.M. model provides pharmaceutical companies to get hold of profitable relations with its customers and end users.

A systematic key account management is made up of eight fundamental elements that answer core questions to the company specific set up of an account management program, before implementing of KAM model& they are:

Objectives and terminologies

what is the overall objective that should be achieved with the KAM program? Which company specific terminologies will be used?

Identification of key accounts

who are the key accounts and how are they going to be identified?

Packages for key accounts

what do we do differently for the important key accounts? Which products or services will they get that other accounts will not get?

Organization and account teams

how is the KAM integrated into the overall company organization?

How to set up and manage interdivisional (mostly virtual organized) key account teams?

Personal

what is the job profile of a key account manager? How to reimburse key account managers? How to set up a career path for people in the KAM organization?

Processes

How to set up KAM specific processes (e.g. budget planning process) and how to integrate them into the company processes?

Tools

which tools are provided to the key account managers to manage the business relationship with their customers? (Example: Key Account Plan)

Steering & feedback

How to set up a multi dimensional scorecard to steer the KAM?

No matter how large the organization and how good the knowledge management is, each key account management has to be built from scratch since the combination of customers for each company provides a unique scenario. In other words, once a program is put into place, make sure that you incorporate a feedback loop that allows constant tweaking.

Fig: 1.10 KAM Model (Source: SIECK consulting)

The KAM model is based on customer portfolio of the enterprise. Strategic importance of each customer can be determined using sales volume, future potential and prestige etc. A key account manager is a customer who:

a) Purchases a significant volume as a percentage of a seller’s total sales

b) Involves several people in the purchasing process

c) Buys for a geographically dispersed organization

d) Expects special attention such as logistical support, inventory management, price discounts and customized applications

Others define key accounts as customers that have strategic importance to the seller, purchase a large volume from seller, and have the potential to lower the seller’s costs. These numerous characteristics can lead to different approaches of key customers.

THE CORE MODEL: PUSH & PULL.

This core push and pull strategy model has its general relevancy in Indian pharmaceutical market. As a matter of fact, pharmaceutical companies are merging and through the merging process, the portfolio of the new companies changes. Medical representatives are rearranged throughout the new companies. New, bigger, pharmaceutical companies are competing more and more with one another and in order to stress their products, might adopt a more aggressive sales strategy. As a result of the new, aggressive strategy companies representatives tend to have more frequent visits to encourage doctors to prescribe drugs and thus increase sales. The push and pull strategy models of pharmaceutical relationship marketing came in to limelight. They are as follows:

Pull strategy model of pharmaceutical relationship:

Pull strategy as the name suggests (fig: 1.11), aims at pulling the customer towards the product .it aims to create demand of the product with in a channel of distribution by appealing directly to the consumers. Advertising rather than personal selling is the primarily promotional tool used for this strategy.

In this model medical representatives are the key actors for example in a small oncology unit almost 40 sales representatives interacting with doctors, and most of them are coming for a visit on a regular once-a-month basis as this is the restriction put by doctors of meeting only once in a month that to on a fix time only, in order to stress the usefulness of their products and push clinicians towards the use of their drugs. This means that, basically, there are at least two representatives every day in busy clinic asking for a ‘short’ meeting to support their product.

Pharmaceutical marketing is a specialized field where medical representatives form the backbone of entire marketing effort. Pharmaceutical companies also appoint medical representatives and assign them defined territories. Medical representatives meet doctors, chemists and stockiest as per company norms. Medical representatives try to influence prescription pattern of doctors in favor of their brands.

The pharmaceutical distribution channel is indirect with usually three channel members i.e. depot/C&F, stockiest and chemist. Pharmaceutical companies appoint one company depot or C&F agent usually in each state and authorized stockist in district across the country. Company depot/C&F sends stocks to authorized stockist as per the requirement. Retail chemists buy medicines on daily or weekly basis from authorized stockiest as per demand. Patients visit chemists for buying medicines either prescribed by a doctor or advertised in the media. Here patient is end customer and doctor is direct customer for any pharmaceutical company. But for doctor customer is more important so he wants an effective supply chain management from prescribed company, and for pharmaceutical companies their customer that is doctor is more important that’s why they emphasize more on supply chain management. Ultimately end-customer is benefited out of this.

For marketing of these types of products companies require more and more skilled field force to develop good rapport with their direct customer (doctor). Moreover field force should have good product knowledge and USP of their products over other so as to convince doctors and PULL the demand for their products i.e. from Doctor to Retailer to Stockiest to CFA to company.

CORE CUSTOMER

(Doctor)

END CUSTOMER

(Patient)

NON CORE CUSTOMER

(Retailer)

CUSTOMER

(Stockiest)

CUSTOMER

(C&FA)

(Fig: 1.11) Pull System Working In Chronic Therapy Segment

In this system, doctors are the core customers and the major thrust is given to build and retain these customer because they are pulling the demand for products hence companies also give main emphasis in building and retaining these customers. For retaining and developing customers, the companies normally provide gifts like sponsorship for various conferences like RSSDI, FOGSI, APICON, UPCON etc. For example Dabur having PASS (Professional Acedemic and Scientific Services) activities for promoting its chronic therapy range.

Closing stock x 2 – opening stock =orderAlso it is interesting to note that since this is a pull system demand is being pulled in to the market so generally representatives place product orders from their stockist on the basis of following formula:

In normal practices there are no chances of dumping of products at retailer level or stockiest level as secondary sales as well as primary sales are reported to the company and payment recovery is also timely and efficiently.

Push strategy model of pharmaceutical relationship

The push strategy got its name because it involves pushing or urging members of marketing channel to sell a product by recommending it to consumers or by giving it an adequate display (fig:1.12).

In present scenario companies are focusing more and more on the availability of products so as to enjoy good image in their cutomer’s (doctors) chamber. Many companies such as Glaxo, Pfizer, Dabur, FDC, Aventies and Cipla etc. are known for their availability of products. For marketing of these types of products companies require more and more field force to remind their products on daily basis to their direct customer (doctor). Moreover field force should have good knowledge of product schemes and offers. Also field force is required to have a good rapport with retailers. Field force also required to ensure good availability of their products to convince doctors and push their products i.e. from to Stockist to Retailer to Doctor. It has been observed that sometimes there are more than fifteen or sixteen representatives in a day are meeting with their customers and requesting for same type of products. Although field force visits are important for an update on drugs and their use. The doctors are in general, sneaking away, trying to hide from sales representatives, since there are too many and they are too pushy and there is too little time. Also the representatives probably have noticed that the reluctant doctors have always less time for short meetings and less interest and tend to reduce the time of the visit.

The relationship between clinicians and representatives has always been good and pharmaceutical companies have provided and still provide the major economical support for customers’ continuous medical education. Something needs to be done to find a solution to this problem that takes into account the needs of both pharmaceutical companies and their representatives on one side and physicians on the other, for a better professional interaction.

In this system, doctors and retailers are the core customers and the major thrust is given to build and retain these customers. Here retailers are also core customer as most of the times they are substituting the products based on their own discretion.

For retaining and developing customers, the companies normally provide gifts like sponsorship for various conferences like small gifts & sponsorship to remind the products on daily basis.

CORE CUSTOMER

(Doctor)

END-CUSTOMER

(Patient)

CORE CUSTOMER

(Retailer)

CORE CUSTOMER

(Stockiest)

CUSTOMER

(C&FA)

(FIG: 1.12) Push System Working In Acute Therapy Segment

Also it is interesting to note that since this is a push system products are being pushed into the market so generally representatives place product orders from their stockiest on the basis of SKUs sold and schemes.

Normally the chances of dumping of goods at stockiest and retailer level are reported also payment recovery of companies is also not very good. Supply Chain Managers can provide considerable value to their companies by understanding the customers’ delivery requirements. A very powerful tool for understanding these requirements is account segmentation. A company can use account segmentation to identify market segments such as Acute & Chronic therapy market which is well positioned to serve and then organize its product range and even SKU’s and service in a superior way. Companies are fighting (for customers) like never before and if anything is certain then it is further intensification of this war. Because of this companies are increasingly looking at Logistics as a weapon to gain Competitive Advantage and it is true that Logistics has the potential to do so.

Customer relationship management & sales force automation

Customer satisfaction in the pharmaceutical industry is highly related to speed, accuracy and efficiency of a company’s research response times. This calls for pharmaceutical companies to have a comprehensive medical information system. This would allow them to fulfill their legal, contractual and ethical obligations while supporting their sales and business partner relationships. The system must service a variety of communication methods in order to connect with a broad spectrum of customers with varied needs throughout their product life cycle, while enabling staff to deliver consistent, accurate and current information in timely manner.

The system also need to simplify the method of information sharing, assist with the identification of market trends and issues and finally, run on secure and scalable platform to continuously accommodate growth.

A good CRM system allows pharmaceutical companies to collect, track, organize, prioritize and respond to caller events. Using the comprehensive knowledge repository, automated responses via letters, fax or e-mails can be generated and edited within minutes. Urgency levels can be employed to define specific target response timeframes. Once a call sheet is closed, it can be archived for statistical reporting purposes.

This allows a company to identify and report on immediate and long-term calling trends related to its pharmaceutical products. It can also track drug related events and capture critical patient data on-line.

The company is also able to handle a major increase in the number of medical queries more efficiently. It can maintain frequent caller and demographic information on health care professionals that can be reviewed by the sales team while maintaining a detailed audit trial of customer correspondence and exchanges. The centralization of up-to-date medical information makes it easy to retrieve and disseminate while the provision of statistical reorts allow users to constantly reassess product profiles and performance improvement.

A CRM system provides a company with an effective mechanism to support continous improvement to its internal business practices. Utilizing the system’s reporting facilities; it can provide strategic information regarding the health care professional’s interests and concern to their sales team.

Sales force automation (SFA) is a subset of customer relationship management. A SFA system allows for easy management of a pharmaceutical company’s vast sales force. It provides sales representatives with relevant updated information when they are on the field and also allows managers to track their activities to make sure that things are going fine.

In an SFA system, information is constantly updated with data that is replicated quickly and securely on their sales reps, managers and corporate HQ systems. Field forces communicate with the corporate HQ when and where they choose. A web based SFA system reduces communication cost and time.

Some of features of good SFA system are:

Mantaining Customer profile – The system maintains detailed and up-to-date profiles, in structured and easy to use form. Information in the profile can be tailored to specific corporate needs, providing accurate, up-to-date comprehensive view on important customers and business opportunities.

Mantaining hospital profile – The system also maintains detailed hospital profiles which are helpful in targeting specific areas and making effective sales strategies. The system provides with sales calendar so that activities are better coordinated and managed.

Activity planning – The system allows individual team members to plan their activities and managers to assign and track specific tasks.

Daily Calls and promotion reporting (DCR) – The system provides detailed information about each call and promotion so that future activities can be planned and tailored to meet specific needs.

Analysis and reports – The system provides detailed statistical data about the activities of sales force to enable better planning and strategy.

Since sales force forms major portion of pharmaceutical company’s marketing efforts, a good sales force automation system can go a long way in reducing marketing cost and increasing effectiveness of marketing. Web applications can enable pharmaceutical companies in deriving tangible benefits by leveraging their traditional expertise. Web applications like e-mails, websites etc .helps them cut costs, manage existing market more effectively and make forays in to new markets. There are many more aspects of pharmaceutical companies, which could also benefit from new technologies.

Pharma marketing emerging trends in context of RM A research conducted by Boston University School of Public Health (BUSPH) reveals that brand name drug makers in the US employ 81 percent more people in marketing than in research and the gap has been growing. It was also found that total staff in marketing has been increased by 59 percent between 1995 and 2000, while number of research staff decline by 2 percent. Quiet clearly drug companies are taking their marketing activities more seriously than before. As compared to Indian market, where less research activities were prevalent and more concentration on marketing is always there. We have observed the following challenges are faced by pharmaceutical companies in formulation and implementation of marketing strategies:

Regulation with respect to marketing tactics

Pressure from public, government and insurance companies for price control

Defining the target group from among physicians, consumers, wholesalers, pharmacy chains, independent pharmacists, hospital personnel and HMOs

Targeting Customers i.e Doctors:

Drug companies are trying to promote their products in many ways. Sometimes the doctors are paid by the pharmaceutical companies to attend or speak at dinners. Medical representatives come in with an arrays of gifts such as pens, pen stands, calendars, notepads, mouse pads, various computer accessories etc. depicting name of their brands so as to position it in the mind of doctors. Also as discussed earlier another powerful tool is free samples of the products. Most doctors receive it from representatives and pass in on to their patients. When free samples eventually run out and when prescription needs to be written, often doctors write the prescriptions for the same drug even though they might have actually considered a different drug. As companies spend more and more money for pampering doctors, the ethical dimensions of some of their actions are coming under scrutiny and criticism. So marketers have to employ their marketing tools judiciously. Most of the doctors claimed that they are not influenced by marketing ploy but research has shown otherwise. According to a study conducted by the Journal of American Medical Association (JAMA), doctors who made specific request to insurance companies that a particular drug be added to the formulatory list were thirteen times more likely to have met with pharmaceutical representative promoting the drug than doctors not making any such requests.

Targeting end consumers i.e. patients:

Now a day another important segment is arising, which also play an important role in promoting drugs. Today drug marketers are pitching their products directly to the consumers instead of relying on doctors to spread the word. There was a time when consumers were illiterate and depend on doctors for treatment but as awareness and self medications are increasing. We can find the effect on the nature of prescriptions by doctors. Increasing lifestyle diseases, increasing OTC products, creating increasing awareness through technology had made end consumers i.e. Patients to request their doctors for medicines of their choices. Many pharmaceutical companies like Johnson & Johnson (J&J), Cipla, Dr Reddy’s lab, Morpen labs etc had even set up thei