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The Pill Brigade

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On 27 May last year, Satyamev Jayate, a TV talk show hosted by Bollywood actor Aamir Khan, highlighted the malpractice of Indian doctors accepting bribes from medical representatives. Three months later, on 23 August, nearly 100,000 medical representatives went on a day’s strike. They demanded, among other things, stringent regulation to end unethical marketing practices in the pharmaceutical industry, which had led to sales employees being portrayed as ‘bribe givers’ by many, including a section of the ‘corporate media’.
What Satyamev Jayate showed was not a one-off incident in which medical representatives, the final link in the sales promotion network of India’s Rs 70,000-crore pharmaceutical market, were seen as conduits for the ‘unholy’ nexus between their employers and medical professionals. “We are always blamed, while the culprits are corporate corruption and government policies,” says Aloke Banerjee, general secretary of the Federation of Medical and Sales Representatives’ Associations of India (FMRAI), the organisation that called the 23 August strike.

For several years now, FMRAI has been fighting the unethical practices associated with medicine sales promotion. However, individually, medical representatives have little or no say in bringing about this change as their job is to market medicines according to the larger promotional strategy of their employers (companies). Ethics need to percolate top-down, they say.

“In 1969, when I entered the profession, a medical representative’s job was considered respectable. We had tremendous prestige,” recalls Amitava Guha, a retired representative with close to 40 years of experience. At that time, foreign pharma MNCs dominated the market. Public sector firms such as Indian Drugs and Pharmaceuticals (IDPL) and Bengal Chemicals were the only big local players, as home-grown companies such as Ranbaxy, Cipla and Cadila were in their early phases. And patent protected medicines had no competing generic equivalents. In fact, until 1970, there was no price control on drugs. “One brand, one molecule, one price; that’s how it used to be,” recalls Rajiv Gulati, president of global pharmaceuticals business at Ranbaxy Laboratories.

“MNCs such as Glaxo and Burroughs Wellcome had a number of research products. Doctors used to wait for us to know about them,” says Guha. “(But) representatives of local private companies did not enjoy the same respect among doctors as they were marketing known products (generic versions of off-patent medicines).”

The first major change that led to the growth of home-grown pharmaceutical firms and a resultant surge in the number of medical representatives happened in 1970 when India shifted from a product patent regime to a process patent system. This allowed manufacture of medicines using different processes. “The latest products became available in India at the lowest prices in the world. Patients and the country benefited as the prices were low and many brands were available,” says Gulati.

Today, there are about 10,000 registered pharmaceutical companies in India, though it’s the top 250 that control over 90 per cent of the market. The number of medical representatives grew at the same pace — from not more than 15,000 across India in the early 1970s to at least 15 times that in 2012. “Sales promotion employees in the organised sector (the top 250 companies) would be over 150,000 today. And more than 250,000 if you add those of the state and zonal level companies and the ones that are concentrating on raw material production, hospital supplies and direct sales,” says FMRAI’s Banerjee. Reflecting this growth, the membership of his organisation is expected to touch 100,000 by the end of 2013.

So it’s not surprising that companies spend 8-10 per cent of their sales revenues on maintaining their sales force, says Neeraj Vashisht, head of lifesciences consulting practice at IMS India. “The fixed salary is about 65 per cent of the total expenditure,” he explains. That comes to an industry average of Rs 7,000 crore a year.

The spurt in companies and the launch of dozens of competing brands for the same drug, have had an impact on the way medical representatives work. “Performance (generating prescriptions for drug brands) is all that matters today. Earlier, the first criterion was the manner in which you represented your firm,” says Guha. “After the 1980s, as Indian companies grew, MNCs wanted to contest them. Inducements (to doctors) started and kept increasing in scale. Indian firms were the first to do it; MNCs followed.”

Corporate Corruption

Convincing doctors to generate prescriptions for their drugs is common among companies, both big and small, Indian and foreign, though in varying degrees and in a variety of ways, say medical representatives. Such practices have almost become the norm. “A tour to South Africa is the latest fad. Earlier, it used to be Thailand and other closer locales. Freebies are also resulting in prescription obligation. If earlier, one foreign tour fetched at least a six months (prescription) obligation, now it has come down to three months. Doctors have started asking for such offers openly, as if such things have been legitimised. As a result, prestige has gone down. A medical representative today is just a conduit,” says Guha.

Such a narrow focus on just generating more and more prescriptions has pitfalls for medical representatives too. “Many young sales professionals do not see life in one firm beyond two years. And every time they change jobs, they seek a better package with a promise to deliver. They bring in their own team, prepare huge volumes of promotional material, and show an initial increase in business. By the time company calls their bluff, they have moved on. Floating loyalties, which started from the top, has reached the medical representative,” says Guha.

But Gulati feels there is more to attrition than just floa­ting loyalties. He says the trend also reflects the larger changes over the years. “In 1991, when India liberalised its economy, there was a sudden demand for disciplined field staff for new generation banks, insurance firms and other such companies. With daily call reports and systematic schedules, trained pharma industry professionals were the best picks for the new jobs,” he says. The attrition rate has shot up from 3 per cent until 1991 to 28 per cent at present, he adds.

The unorganised sector, or the region specific tiny pharmaceutical companies that account for the bulk of the registered firms in India and an approximate 10 per cent marketshare, employs at least 100,000 for sales promotion, estimates FMRAI. And the way this workforce promotes medicines is also a matter of concern.

“India is the only country where you don’t need a manufacturing facility to become a pharmaceutical company. One can simply have a pure marketing company,” notes Guha. “You can also do well with just 10-15 doctors on your rolls. Your medical representatives need not be highly paid, or highly qualified, as there isn’t any need for science-based promotion. They are aiding commercial transactions. Handling the promotion-cum-distribution system of your territory — that’s what they do.”

If the government’s failure in curbing unethical practices in pharma marketing has resulted in a dent in the status of medical reps, its recent drive to replace expensive branded medicines with low-cost unbranded generic medicines is threatening their very existence.

“If there is a brand, there is a medical representative. And if there isn’t a brand, there is no medical rep,” says FMRAI’s Banerjee. He feels the job security of thousands of medical reps is threatened by the generic drive initiated by the central and state governments as generic medicines are known by the active ingredients they contain. “The governments are even restricting sales promotion activities in public healthcare institutions,” he says. What worries Banerjee is the government’s attempt to cut the cost of drug procurement by popularising generics. Free supply of essential medicines is an integral part of its ‘universal access to healthcare’ strategy. That said, the generic promotional drive has not taken off in a big way.

Global Practice
The Indian pharma market is unique, so is its medical rep. No specific qualification is needed for the job. It is left to the commercial or scientific (as the case may be) interests of companies to choose their sales employees.
“In Russia, you cannot become a medical representative without a medical degree. In Europe, there is a minimum qualifying examination every third year to retain the licence,” says R.B. Smarta, managing director of Interlink Marketing Consultancy.

IMS’s Vashisht, too, feels that the systems of evolved healthcare markets such as the US and Japan and those of emerging ones such as India, China, Russia, and Latin American countries should be looked at separately. “It is not unusual for representatives to spend a lot of time with doctors in China, while they get 15-20 seconds with a doctor in countries like the US.” The nature of the healthcare system (US has a highly evolved “insurance” industry; China is a hospital-driven market, etc.), and stringency of the promotional protocols (in the US, companies can be fined millions of dollars if unethical promotional practices are observed) also matter, he adds.

In India, as the industry is growing quickly, which is leading to high attrition, companies want to retain their medical representatives, and have thus improved their recruitment and training processes. “We have a seven-step process, including physiological profiling, and a one-month residential training for new recruits. Some (companies) may not go to that length, but all are providing training,” says Gulati.

“There are two kinds of firms in India. The ones that believe in being the first to launch different products, and the ones that do not believe in such launches,” says Gulati. “Different firms have different approaches.”
Traditionally, medical representatives have been the eyes and ears of their companies. On job, they gather a great deal of data, including sales performance of brands — their own and of rivals. And this information usually helps pharma companies frame, further and alter marketing strategies. But not any longer, it seems. Now, technology-armed information providers help pharmaceutical companies collect data more effectively. Market research firm IMS Health India, for instance, has launched a new doctor-chemist census covering 75 per cent of the Indian healthcare market in order to capture information such as specialisation range of doctors, pharma and non-pharma sales, etc. It will capture the location of healthcare players on an interactive map using GPS. Access to reliable and granular market intelligence, says Kumar Hinduja, senior director for strategy at IMS Health, will help “effective measurement and deployment of salesforce”.

IMS’s competitor AIOCD AWACS is capitalising on the 750,000 membership strength of promoter All India Organisation of Chemists and Druggists to pool in information from 1,678 towns to estimate the pharma market size for each town. This, it claims, will help pharma companies prioritise areas for drug deployment. The initiative can also provide data on how much money each town spends on each therapeutic category of medicine. This, of course, can be a critical tool for companies framing market entry and expansion strategies.

Smarta says that pharmaceutical marketing trends are moving towards creating specialised divisions and marketing to specialty and super-specialty doctors besides general practitioners. “The technical, medical and marketing knowledge and communication is going to be essential for the next generation of medical representatives. They are going to be knowledge workers and also highly specialised medico marketing people,” he says. “You may find nutritionists, alternate medicine professionals, medical professionals as well as B. Pharmacy graduates getting attracted to this profession.”

But the challenges before medicine sales promotion are much more than ethical issues. For instance, technology increasingly plays a major rolew in marketing practices. Remote tracking of doctors’ prescription behaviour, pattern of sales in the same therapeutic category, etc., are all available at the click of a button. With companies taking the email route to approach doctors, will medical representatives have a future at all?

joe(dot)mathew(at)abp(dot)in; joecmathew(at)gmail(dot)com

(This story was published in BW | Businessworld Issue Dated 17-06-2013)

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