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Home » An
Overview of the UK Pharmaceutical Industry
An Overview of the UK Pharmaceutical Industry
Jeremy Tromans
AllAboutMedicalSales.com
First
published in 2002
The Pharmaceutical Industry is the second
largest contributor to Gross Domestic Product behind Financial Services. There
are several very big players in the UK with GlaxoWelcome, SmithKline Beecham
and AstraZeneca being the three largest UK based companies. In America the
largest organization (in capital terms) is Merck Sharp and Dohme (MSD), and
until recently this was the worlds largest company. In recent years with the
merger of Glaxo Welcome and Smithkline Beecham to form GSK, Merck Sharp &
Dohme have been relegated to second position.
An Overview of the UK Pharmaceutical Industry
There are three distinct types of
pharmaceutical companies in the UK:
- Research and Development (An Integrated Company)
- Research Only - i.e. Biotechnology
- Contract Pharmaceutical Organization (CPO) i.e. Snyder
and Ashfield
Within the CPO's there are two distinct
types of field force:
Dedicated Sales Team
An integrated
company works in partnership with a CPO over a prolonged period if time. The
products promoted are solely those belonging to the integrated company. The
advantages of this type of arrangement for you are numerous and include: a
definite contract with the CPO even if the integrated company struggle,
possibilities of working with numerous companies and developing your broad
knowledge, possibility of been taken on head count in an organisation you like.
Syndicated Sales Team
These are managed by the CPO and you
would sell up to three drugs from different companies. The advantages for you
working in this environment include:
- Varied product and therapy area
knowledge, which if you want to progress in to marketing would help
immensely
- variety with little chance of boredom.
- Early promotional
opportunities, as many CPOs look to develop their successful syndicated reps
into higher positions within their organisations.
Pharmaceutical
companies in the UK operate in a monopsonist market, in that, there is only one
major purchaser (the NHS). Adding increasing challenge to this equation, this
monopsonist is also the price regulator (the government) and therefore the one
purchaser is also the price regulator. You could ask, why therefore does the
government not slash all drug prices and reduce the costs of the NHS?
Within the NHS there are two distinct sectors:
Primary
care
This constitutes General Practice i.e. GPs, Practice Nurses,
Practice Managers and Health Authorities
Secondary Care
This includes Hospitals and all their associated infrastructure i.e.
Consultants, Registrars, Junior Doctors, Pharmacy, Ward Staff and Specialist
Nurses.
Generally speaking ten times more prescribing takes place in
primary care, although it is important to recognise that much of this
prescribing is Hospital led or instigated, with the General Practitioner often
working in close cooperation with their hospital colleagues.
This
Hospital influenced community prescribing practice is an important factor for
Medical Representatives to take into account, although this balance has seen
some change since the advent of Primary Care Groups (PCGs), set up by the new
Labor Govt.
One important factor that PCG's are tasked to examine is
the balance between the cost of prescribed medication versus provision of the
best possible medical care. Of fundamental importance within this process is
the agreement of drug forularies, where drug efficacy and relative costs are
considered across all major therapy areas. The outcome is a 'prescribing
guide', which all GP's within given PCG's, are encouraged to adhere
to.
The impact of this policy can either have a positive or detrimental
effect on the pharmaceutical products that your company promotes. If your drug
fails to gain a formulary inclusion, then the Doctors ability to prescribe is
limited.
In recent years the number one drug prescribed in the UK has
been "Losec" by Astra Pharmaceuticals. At its height, Losec sales amounted to
one million pounds per day! Losec loses it's patent in 2001, meaning that other
Pharmaceutical companies will be allowed to manufacture it. They will have to
call it Omeprazole (its GENERIC name) but with no research and development
costs (R+D) involved the new companies will be able to massively undercut the
BRANDED version, Losec. It is envisaged that all PCGs will switch their
prescribing of Losec to Omeprazole, resulting in reducing revenues for Astra.
Astra have therefore developed new drugs, with patents, to make up for this
shortfall in earnings.
Drug representatives in the main sell
prescription only medicines (POMs). This means that they influence the Doctor
to prescribe their drug. The patient then takes the prescription the chemist,
who dispenses the drug. At the end of every month the number of prescriptions
dispensed by each chemist for each drug is totaled up. All chemists who work in
a specific postal brick add together their figures to give a total number of
prescriptions per postal brick per product. Every Representative works
designated postal bricks so these figures constitute actual territory sales and
are termed RSA (Regional Sales Analysis).
A representative does not
directly sell drugs to a Doctor but encourages him to write their product on a
prescription (called an FP10). The exception to this is the field of Vaccines,
where a DR can buy the injections from the company direct.
The
representative rarely sells directly to the chemist either. Normally when a
prescription comes into a chemist via the patient, the chemist will take a pack
off the shelf and re order a new pack direct from the wholesaler. The
exceptions are:
- Some companies offer discounts to the chemist if they
place an order directly with the rep. This often happens with generics where
cost is the key driver.
- Over the counter (OTC) medicine. These are products that
were once POM and can now be bought from your chemist i.e. Ibuprofen. A company
will generally have a different team of Representatives to sell OTC
medications.
On an average territory you can expect to
find between 60 - 80 GP representatives.
Types of Medical
Representative
Broadly speaking, there are four distinct types of
Pharmaceutical Representative.
Part Time Medical Representative
Generally works from 8am - 1/2pm in Primary Care, with a very small amount
of evening work.
Full Time Medical Representative
Primary
Care only - Works only with GPs, practice nurses and practice managers,
possibly some Health Authority.
Full Time GP/Hospital
Representative
Works in primary care in the morning and secondary care
in the afternoon.
Hospital Specialist
100% dedicated to
hospitals. This role is one that can only be done after spending time in
Primary Care first.
As well as the above, there exists a wide
variety of specialist and project driven Medical Representatives, for example,
the advent of PCG's has seen the emergence of Specialist PCG Representatives,
whose remit it is to understand the influence PCG policy and decision
making.
Over the last ten years or so the number one problem facing the
representative is gaining access to prescribers and influencers. Healthcare
professionals time has become increasingly busy and the representative runs a
constant gauntlet, where he is competing for time with numerous other
distractions.
Couple this with the shift towards generic prescribing and
the role of the representative is a tough one.
With the average cost of
initially getting a new representative selected, trained and out on the road
for one year estimated to be at TWO HUNDRED THOUSAND POUNDS, you can see why
companies do not want to make any mistakes.
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