What Are Pharma Contract Sales Organizations?
Pharma contract sales organizations (CSOs) are companies that provide pharmaceutical sales services to drug manufacturers on a contract basis. These third-party sales forces are contracted by pharmaceutical companies to market their products in the field. Their role is pivotal to the success of pharmaceutical firms, particularly those that cannot afford to maintain large, multi-territory sales networks to promote their products across many geographical areas.
CSOs can deliver a variety of proven and valuable services to pharmaceutical firms, including sales force management, marketing support and even administrative assistance in conjunction with the Sales Outsourcing service. Contracting with a CSO is often a preferred option over in-house sales for pharmaceutical companies because maintaining their own sales team can be financially prohibitive, particularly in underdeveloped markets . Depending on the product, therapy class and sales organization, there may also be a lack of expertise, patient volume or other circumstances that divide sales forces into separate contract organizations, generic biopharma, biotech and sellers of over-the-counter (OTC) products.
Outsourcing sales functions can also enable pharmaceutical firms to expand their reach into new markets and provide a level of flexibility in sales staff hiring, contract negotiations, commission structures and other sales-related operations. Some pharmaceutical firms also choose to outsource their sales forces to focus on research and development (R&D), despite having the financial resources and volume to maintain an in-house staff.
Contract sales forces can be hired on a rolling basis or for a fixed term or project. CSOs offer various sales services that can be tailored to meet the needs of pharmaceutical firms. These include:
Advantages of Employing Contract Sales Organizations
Pharmaceutical companies experience a multitude of advantages from contracting out their sales personnel to Contract Sales Organizations (CSO). During the research into the top Contract Sales Organizations, we have found that the biggest perceived benefit is price. Overall, each Contract Sales Organization has its own pricing schema, but they have all shown us that the low price is not necessarily indicative of previous stellar pharmaceutical marketing campaigns. Their reasoning behind this statement is most likely that they know the success of a few major campaigns can make or break the CSO. Most of the larger contract sales organizations have built up considerable capital, from either a previous few successful campaigns or through funding by larger parent companies. This capital allows CSO to better pursue top talent and the technology needed to analyze the data needed to establish a pharmaceutical company’s sales campaign.
Another financial advantage touted by the Contract Sales Organizations we spoke with was the concept of pay for performance. Most of the top CSO we spoke with offered a pay for performance plan, in which each employee was brought on for a specific amount of time with a specific deliverable in mind. For example, if a CSO were contracted in to help with a new drug launch at the beginning of next quarter, they might agree to provide two sales representatives for twelve months at a six-figure salary (lower than your average physician sales rep) with the bonus that if they receive more than a 10% bump in market share in the first quarter they worked, the contract would be extended for 18 months and at a 15% rate increase to the original salary.
Another point made by contract sales organizations we spoke with was the benefit of their expert knowledge in the field. For some of the larger pharmaceutical companies out there, they just do not have the time or capability to maintain a team of experts in every field they represent. By using a CSO, they are able to leverage the expertise of that team to further their products without having to hire an entire permanent sales team for that purpose.
Premier Pharma Contract Sales Organizations
The leader in the industry, in terms of revenue and services, is QuintilesIMS which has a 23% market share. QuintilesIMS provides a full range of innovative, tailored solutions from Phase 1 through commercialization. Quintiles’ commercial solutions services include all aspects of contract sales (IQVIA’s SCS), market access, payer and patient health services, adherence and supports patient services including hub services, specialty pharmacy, and patient assistance (in partnership with Whithall, Medicus and UBC). It also provides clinical development and commercial solutions including signal detection, science and patient solutions (added in the recent merger of Quintiles and IMS Health). While Quintiles has in for a long time been the leading DSP, a lot of new entrants have sprung up in past couple years to compete with Quintiles. Here are a few:
COMPANY NAME
SPECIALIZATION
MediMedia USA, Inc.
Direct to Patient
Medpace
Full-service
InVentiv Health
Full-service
Chiltern
Full-service
Syneos
Full-service
Celerion
Products and Consulting
Novella Theoretical Research and Consulting
Full-service
Strategic Clinical Developments
Full-service
Medpace
Full-service
Veristat
Full-service
Revive
Sales and Medical Affairs
Market Access
Implementation
Branding and Marketing
Commercial
Sales with Commercialization
This is by no means a comprehensive list but gives an overview in terms of some of the top DSP vendor options.
Considerations When Selecting a Contract Sales Organization
When selecting a contract sales organization, pharmaceutical companies should consider several key factors.
Experience: The company’s experience and the experience of its personnel are important factors. Experienced personnel are better able to develop and execute a strategic plan to grow your brand while simultaneously avoiding compliance pitfalls.
Capabilities: A company’s capabilities to plan, execute and meet the needs of your business are essential to a successful relationship. Assess applicants for their capabilities in the context of your specific needs to ensure the relationship will be beneficial.
Regulatory compliance: Ideally, all capabilities would be in full compliance with applicable U.S. Food and Drug Administration (FDA) regulations and guidelines. However, depending on the stage of your product, regulatory compliance may not be immediately necessary. In that case, you’ll need to gauge a prospective partner’s plans for ensuring regulatory compliance before engaging its services.
Pharma Contract Sales Success Stories
A multinational pharmaceutical company specializing in neurology and biosimilar medications sought to launch a new specialty drug in a particularly competitive and crowded specialty segment. The company determined that to reach their target physicians effectively, they would need to restructure the way in which their sales force operated, as the current model did not allow sales reps to sufficiently differentiate the new product from the competition.
In the face of these challenges, the pharmaceutical company chose to partner with a contract sales organization, which proposed a new model that reduced the number of traditional primary care physicians who would be called on by sales reps . In its place, the contract sales organization advised that a team of specialized sales representatives would visit prescribers to present the unique clinical data and program support for the new drug. Call volume was increased to ensure more doctors were educated about the drug so they could incorporate it into their treatment regimens.
The results? In just 90 days, the pharmaceutical company saw its new drug move up to the top tier within its class. By implementing a high-frequency, high-impact selling model, the contract sales organization helped the company exceed its first-year sales targets by more than 120% in the first 12 months.
This company represents just one example of how we have helped Phillips-Medisize clients tackle commercialization challenges to achieve their business goals.
Future Directions in the Pharma Contract Sales Industry
As the pharmaceutical industry is evolving and maturing, so too has the contract sales organization (CSO) sector. Here we will explore three main areas of change that are having a significant impact on the contract sales market.
Changing Health Care Dynamics
As the world of healthcare becomes more precise, so too does our relationship with it. One example of this is precision medicine, a way of targeting medical treatment to the individual characteristics of each patient. While still in its early stages, it has the potential to transform the industry, particularly as personalized medicine leads to integrated care e.g. genomics and nutrition metabolism. An expansion in the use of patient-friendly treatments, such as oral or self-injected biologics could disrupt the pharmaceutical market. The trend towards digitization and personalization will make it easier for companies to connect and communicate with patients while providing value-added services.
Changing Market Landscape
The rapidly changing pharmaceutical industry brings forward new commercial opportunities and expands current avenues through which to sell. The emergence of a more self-directed consumer, combined with a network of touch points helps deliver relevant messages at relevant times and in preferred formats. The average patient’s use of digital media for health information is also increasing, creating opportunities for the pharmaceutical industry to engage in health education. CSOs that partner with principals across multiple departments and therapeutic areas have the potential to drive greater value as they are able to leverage best practices across multiple clients.
Digital Age
With breakthroughs in technology manufacturers now have access to a wealth of data as well as a wide range of offerings to help mine this information. Data sciences, for example, can provide insights into future brand performance. Medical affairs consulting can turn information into insights. Digital MSLs, digital engagement programs, net promoter score, tablets and apps can facilitate the implementation of new business processes at low cost. The success of these tools will depend on how well they are integrated into core processes.
Conclusion: Selecting the Best Partner for Your Needs
In this article, we explored the diverse landscape of contract sales organizations in the United States. From large national agencies to smaller, specialized providers, the contract sales organization sector offers pharmaceutical companies a range of options for outsourcing their sales and marketing needs. The key players in the field demonstrate their prowess across the pharmaceutical industry, with a focus on tailored solutions that meet the specific requirements of their clients.
The top contract sales organizations provide pharmaceutical clients with a range of sales services, including recruitment, training, and management of sales teams. By utilizing the expertise of these organizations, companies can achieve greater market penetration and leverage the latest automation and communication tools to optimize their sales efforts. The contract sales organization business model also allows for more adaptable and flexible sales operations , enabling pharmaceutical companies to strategically enter new markets or react quickly to the changing business landscape.
Choosing the best contract sales organization for your pharmaceutical company requires a thorough analysis of your organization’s unique needs and objectives. It is important to prioritize the fundamental factors including experience within your industry, specific product and service offerings, and operational footprint and capabilities.
In addition, pharmaceutical companies should consider the experience of the employees and management of the organization, as well as its mission and corporate values. It is essential that the operations of the contract sales organization align with your company goals and objectives.
By conducting a careful assessment and analysis of potential partners and their alignments with your objectives, you can make an informed decision that will lead to successful sales efforts. Overall, the selection of the right contract sales organization is a critical aspect of the broader sales and marketing process, and should be given sufficient attention and analysis to ensure success.