Biomedical Engineering Reference
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reported trends that pharmaceutical detailing effectiveness in new product launches
is declining over time. The meta-analysis also revealed a number of methodology-
related factors as signifi cant determinants of the detailing elasticity compiled from
previous studies. After correcting for these methods-related biases, the mean detail-
ing elasticity reduces to 0.18. Using this method bias-corrected estimate of mean
detailing elasticity in conjunction with plausible product margins, the authors
demonstrate that optimal detailing spending to sales ratios today (1) should be in the
region of 6-7 % over pharma product life cycles; (2) should involve judicious shifts
from higher to lower detailing emphasis as products age; (3) should be larger in
Europe than in the USA.
18.1
Introduction
In pharmaceutical marketing, detailing, i.e., personal selling to physicians has been
the key component of pharma promotion in the developed markets for decades.
Most recently, Cegedim-SK&A (
2011
) reports that in 2009-2010, US Pharma
Companies spent about $28 billion promoting drugs to prescribers, with detailing
accounting for about $15.3 billion, or about 54 % of total annual promotion
spending.
1
The corresponding numbers for the top fi ve European markets (France,
Germany, Italy, Spain, and the UK) were about $18.5 billion for total pharmaceuti-
cal promotion spending with detailing to healthcare professionals accounting for
$11.8 billion or 60 % of total promotion spending (Derrick
2011
). Interestingly,
however, total pharma promotion spending in the USA declined by 10 % from 2009
to 2010, continuing a trend that has been evident for the past few years. US pharma-
ceutical companies are cutting back mostly in detailing and sampling, while spend-
ing in mailings and print advertising grew from the previous year (Cegedim-SK&A
2011
). Indeed, there has been a 25 % reduction in the US pharmaceutical sales force
since 2005. In 2005, the US pharmaceutical sales industry employed 102,000 reps.
It is estimated there will be just 75,000 in 2012 (Baldwin
2011
). In contrast, overall
pharma promotion expenditure in the top fi ve European markets has exhibited small
0.5-3 % annual increases over the last few years. However, like the USA, total
detailing spend has decreased in recent years, albeit at a much slower rate than in
the USA, e.g., it was down 2.5 % from 2009 to 2010 (Derrick
2011
).
1
Based on Gagnon and Lexchin (
2008
), we believe Cegedim's (CAM Group's) estimate of total
spending on detailing includes not only the average “cost to fi eld the rep” (salary and benefi ts of the
representative and the transportation cost) but also the costs for the area and regional managers, the
cost of the training, and the cost of detail aids such as brochures and advertising material. In contrast,
IMS Health estimates of detailing spending only consider the “cost to fi eld the rep.” Thus, Cegedim
CAM Group's estimate of US pharma detailing spending in 2005 was nearly 2.8 times IMS' esti-
mate of $7.3B for that year (Donohue et al.
2007
; Gagnon and Lexchin
2008
). Data from a third
source, SDI Promotional Audits (recently acquired by IMS Health), utilized in a 2009 Congressional
Budget Offi ce (CBO) report by Campbell (
2009
) indicates that US pharma companies' detailing
spending was roughly $11.25B in 2005, or about 55 % of the CAM estimate for that year.
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