New Transparency in Medicine

Transparency and Its Effect On Sales Reps in the Pharmaceutical and Medical Devices Industry

By Jane Noble, May 14, 2013

As part of the Patient Protection and Affordable Care Act (PPACA), a new ruling will come into effect at the end of March 2013. The Physician Payment Sunshine Act mandates that pharmaceutical and medical device companies report any payments made to physicians. These payments are widespread and until recently were considered a trade secret but will become public record in September 2014.

The pharmaceutical industry has already experienced dramatic changes over the last 20 years. In the 1990s and early 2000s, drug companies, flush with the revenues from blockbuster drugs, sent an army of sales reps who courted doctors with lavish, entertaining and lucrative consulting fees in exchange for endorsement of their products. Healthcare reforms, the digital age and a tough global economy have forced pharmaceutical companies to reinvent themselves and curtail spending. The industry is now facing a major patent cliff as revenues from the hugely successful drugs of the 90s are now facing generic competition.

We’ve seen mega mergers of companies so that the market is now dominated by a handful of drug giants – who have slashed their sales force and are experimenting with digital marketing. Companies are developing digital sales tools that aim to educate and influence doctors on new drugs without the intrusion of an office visit; and doctors are embracing these changes. Technology is gradually replacing, rather than supplementing, human sales personnel. The Physician Payment Sunshine Act brings a much needed transparency to medicine, but it is yet another nail in the pharmaceutical rep’s coffin as one more sales tool is taken away and the competitive edge is dulled.

For many years, the medical devices industry stayed in the shadows and experienced extensive growth even as the pharmaceutical industry was declining. That pattern has now come to a halt, however, and there is an exodus of sales reps underway.

With baby boomers reaching retirement age, one of the fastest growth industries in the country is now the senior care market. As we at Amada continue our expansion plans through franchising, we are seeing a pattern in the inquiries we are receiving from potential franchisees. More than 80% of inquiries are from ex pharmaceutical and medical device company employees and they are proving to be ideal franchise partners. The skills, knowledge and acumen they bring to the senior care market are invaluable. They have an excellent work ethic and understand the need for networking and relationship building. Combine these skills with an entrepreneurial spirit and you have a recipe for success. Right now is the perfect time to invest in the senior care market – as tremendous growth is anticipated over the next 7-10 years.