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Both Large and Emerging Pharma and their Service Providers
Have Much to Gain from Innovative Thinking
New Brunswick, NJ— (April 5, 2006) Over 400 leaders of the pharmaceutical industry gathered together at SRI’s 4th Annual Pharmaceutical Marketing & Sales Global Summit to participate in a robust agenda covering six topical areas over two-days. Steve Budd, President of PDI, Inc, a diversified sales and marketing provider to the biopharmaceutical industry, set the tone for the two days in his opening remarks when he said: “Despite the [many challenges we face], and in many ways as a result of them, we as an industry are faced with tremendous opportunity . . . I have a real sense of optimism about our industry, and great confidence in our collective ability to thrive in the current environment.”
Citing the billion-dollar price tag to develop and establish new brands, the hyper-competitive market, the impact of managed care, an increasingly restrictive regulatory environment, and the unknown impact of the Medicare Modernization Act, Budd quickly set the stage for the need to address innovative solutions in order to continue historically unprecedented success trends as an industry.
According to Budd, the opportunities to overcome these obstacles are an exciting challenge that will take some creative thinking and new approaches to the process of doing business. Sales is a prime example of a strategic area that can be well served by new delivery models that incorporate partnerships or service relationships. Emerging pharma is an “excellent example of alternative thinking.” These companies have embraced innovative approaches and strategic partnerships to overcome their lack of infrastructure and are making terrific in-roads.
Budd continued on this theme in his keynote address, discussing how these are the best of times and the worst of times. Faced with a marginally productive pipeline for the top 20 pharma companies, successful patent challenges, pricing pressures and $100 billion in branded products due to come off patent in the next five years, Budd contended that traditional sales and marketing practices must be re-examined. Training all reps equally to represent the brand throughout the product lifecycle is no longer the most effective strategy. Similarly, training multiple reps to detail the same product with the same message also bears marginal return and risks alienating our physician customer.
Companies who look to leverage their brand and improve their ROI going forward in today’s sales climate will be well served by so doing with a “fit-for-purpose” sales organization. In this scenario, the rep profile is aligned with specific physician/portfolio needs. There can be a core group of reps who target physicians in the launch and growth phases at an annual fully-loaded cost of approximately $180 thousand per representative, and a supplemental group covering well-established mature brands at approximately $110-120 thousand per representative. Then additional teams can be brought in as needed along the growth curve to provide supplemental support at approximately $140 thousand per representative. This type of model allows the pharmaceutical company the flexibility they need to respond to market conditions while addressing cost containment, without risking top-line sales.
With emerging pharmaceutical companies, the contracted “fit-for-purpose” sales organization brings slightly different benefits to the table. A “fit-for-purpose” model can mitigate commercial risk by delaying the cost of fixed infrastructure. It gives companies the opportunity to leverage the technology and expertise of their partners while they address other business-critical issues. It can certainly speed up their market entry, as well as the removal of poor performing representatives. Utilizing a contracted sales organization also gives emerging companies the option to hire the best performers through dynamic conversion and to continually refine their rep profile without impacting their own organization.
Despite all the market issues, and the ensuing pressures brought to bear on the service providers in the industry to improve margins, Budd strongly emphasized that despite what doomsayers are saying, the “personal selling model is NOT dead, but that an innovative sales force solution will nurse it back to health.” Concluding with statements like this set the stage for a very positive and productive approach to the conference. They also underscored PDI’s involvement and commitment to sharing their expertise in market dynamics and changing sales force structures for the betterment of the =
About Strategic Research Institute (SRI)
The Strategic Research Institute creates, produces and manages conferences covering industry specific business-to-business topics. Their globally recognized events provide powerful business research, education and information, which relates directly to market trends, global competition and technological change.
They provide attendees with the content and contacts needed, whenever, wherever, and however needed. Their conferences create an interactive forum for information sharing - empowering attendees to receive an insider perspective into highlighted industry segments through presented business research by invited domain experts.
For more information contact:
Stephen P. Cotugno
Executive Vice President-Corporate Development
PDI, Inc.
201-574-8617
About PDI
PDI, Inc. (NASDAQ: PDII) is a diversified sales and marketing services provider to the biopharmaceutical industry. PDI's comprehensive set of outsourced sales and marketing solutions is designed to increase its clients' strategic flexibility and enhance their efficiency and profitability. Headquartered in Saddle River, NJ, PDI also has offices in Pennsylvania and Illinois.
PDI's sales and marketing services include our Performance Sales Teams™, which are dedicated teams for specific clients; and Select Access™, our targeted sales solution that leverages an existing infrastructure; marketing research and consulting; and medical education and communications. The company's experience extends across multiple therapeutic categories and includes office and hospital-based initiatives.
PDI's commitment is to deliver innovative solutions, unparalleled execution and superior results for its clients. Through strategic partnership and client-driven innovation, PDI maintains some of the longest standing sales and marketing relationships in the industry. Recognized as an industry pioneer, PDI remains committed to continued innovation.
For more information, visit the Company's website at www.pdi-inc.com.
Forward-Looking Statements
This press release contains forward-looking statements regarding future events and financial performance. These statements involve a number of risks and uncertainties and are based on numerous assumptions involving judgments with respect to future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond PDI's control.
Some of the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements are general economic conditions, changes in our operating expenses, adverse patent rulings, FDA, legal or accounting developments, competitive pressures, failure to meet performance benchmarks in significant contracts, changes in customer and market requirements and standards, the impact of
any stock repurchase programs, and the risk factors detailed from time to time in PDI's periodic filings with the Securities and Exchange Commission, including without limitation, PDI's Annual Report on Form 10-K for the year ended December 31, 2004, and PDI's periodic reports on Form 8-K filed with the Securities and Exchange Commission since January 1, 2005. The forward looking-statements in this press release are based upon
management's reasonable belief as of the date hereof. PDI undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
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