GSK continues to outsource sales reps from PDI

There are between 10-12,000 field-based representatives in the UK and around 30 per cent of these are now outsourced. In the US, this figure is around 9 per cent, but expected to climb.

"We believe that increasing financial pressures on drug companies, along with increasing government pressure to reduce drug prices, will lead to an increase in drug companies looking to reduce costs by outsourcing more of their sales reps,"​ Stephen Cotugno, executive vice president-corporate development of >PDI​ told Outsourcing-Pharma.com.

Traditionally, around 80 per cent of a big pharma company's marketing budget is spent on its sales force. However, primary care sales, the prime target of the sales team, are slumping, accounting for only 60 per cent of revenue in 2003 compared with 75 per cent of revenue in 1998.

This trend is expected to continue, as generics further erode the pricing power of brand-name products and many major drug companies are now making substantial reductions in core sales force numbers, particularly in the US.

Generic competition, in addition to the drying up of drug pipelines is also forcing drug companies to look at their cost structure and find new ways of reducing costs. Outsourcing sales representatives is emerging as a popular way to do so.

"Specialist companies that provide outsourced sales representatives can provide a more cost-efficient and flexible team that can be expanded and reduced according to the company's needs,"​ said Cotungo.

PDI's new 12-month contract with >GSK,​ beginning on January 1, 2006 is an extension of an existing contract inititated in July 2003 and will provide the drug giant with around 600 drug reps. PDI has been providing outsourcing services for GSK for over 10 years.