by Cara Smithers

Created on: October 01, 2008   Last Updated: October 07, 2008

Title: The Pharmaceutical Industry: Dependent on Sales Forecasting

Pharmaceutical companies and their droves of sales representatives would be helpless without the use of their IMS Health sales forecasting data. Many people are unaware that unlike other markets where the competitors' business is unknown, pharmaceutical representatives have all their cards laid out on the table. Pharmaceutical companies purchase millions of dollars of data from Healthcare solutions companies such as IMS Health.

Every month sales data is conveniently loaded into the sales representatives' laptops or blackberries and is broken down and converted into various reports and graphs. This data is often reflective of how much their product has increased from the last month. In addition, by purchasing this data, pharmaceutical companies also have the privilege of scoping out which physicians are prescribing their product, which physicians are prescribing their competitors' product and how much their product use has gone up from the previous month. This sales forecasting information is pivotal to the successful launch of new pharmaceutical products and maintaining market share of old products on the market. Depending on how much the pharmaceutical company paid for the software, the reporting data can be very elaborate. There are options to sort prescription data by script volume, script growth and even as recent as weekly growth. Besides all of the pretty, colorful graphs printed out to appease upper management, this data can also serve as a red flag to sales representatives. For instance, if script counts dip down dramatically from one month to another the data will reflect it and often send the sales representative an automated message to alert them how convenient? This could be an indication that the representative of a competitor has provided information to persuade the physician to switch to their product. Wouldn't it be nice if someone would send you an email at work every time someone outsold you? Many salespeople wait weeks or month anticipating a sale that may already be gone or may never come to fruition. This type of reporting gives pharmaceutical representative an instant competitive advantage.

The worst case scenario for a representative is that a physician had a recent bad experience with the product and has discontinued its use in their practice. However, without the monthly data, the representative may not realize there is an issue with the product and may either waste additional resources on them or may be blind sighted by an angry practice. Properly forecasting sales data can eliminate these barriers.

As far as cyclical sales cycles are concerned, pharmaceutical sales representatives may also see trends corresponding to the seasons or the weather. For instance, a product marketed toward an elderly person in the North, may see a sharp decline in sales every year during the fall and winter months. This is in response to the "winter birds" leaving the chilly snow behind for their summer homes in the South. Consequently, pharmaceutical companies in that region would adjust their sales quotas to reflect that yearly trend and sales representatives would plan accordingly to that sales forecast.

The interaction of sales representatives with physicians has been dramatically decreased over the last few years due to a flood of too many representatives in the market. Therefore, without the sales forecasting data, representatives would be flailing around trying to figure out which prescribers to target and wasting company time and money. Sales forecasting is undoubtedly a way for the pharmaceutical industry to maximize productivity and some may say that it could not survive in the current environment without it.

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