SOURCE: Cutting Edge Information

September 19, 2007 07:27 ET

Incentive-Based Programs Account for 25% of Pharmaceutical Sales Reps' Total Compensation Package

RESEARCH TRIANGLE PARK, NC--(Marketwire - September 19, 2007) - Pharmaceutical sales representatives receive approximately 25% of their annual compensation in incentive-based bonuses, a report from pharmaceutical business intelligence leader Cutting Edge Information reveals. The report, "Pharmaceutical Sales Management 2008," explores the factors that affect sales representative compensation, such as experience, years of service and job success.

In response to the pharmaceutical industry's demand, one study participant claimed that third-party vendors are increasingly likely to offer physician-sales representative relationship measures. These vendors poll doctors on relationship- and customer service-oriented measures and then provide results to pharmaceutical companies, who reward high-rated sales representatives with incentives. The practice of tying sales representative compensation to relationship measures underscores the importance of the physician-representative relationship.

A slew of other factors, in addition to physician relationships, are involved in determining a sales representative's compensation, including co-selling and team cooperation, market share, portfolio-product goals, territory sales goals and new physician scripts. Some pharmaceutical companies are turning to this myriad of factors in order to make compensation levels more equitable.

"With a traditional percent-to-quota compensation system, sales representatives are paid based on their sales relative to other representatives in their territory," explains lead researcher David Richardson, senior analyst at Cutting Edge Information. "This system means that high-selling representatives in a high-producing territory may not receive bonuses, while lower-selling representatives in a low-producing territory will. With more factors in play, pharmaceutical companies can eliminate this inequity."

The report examines pharmaceutical companies' sales investment, structure, strategies, and field tactics. Compiled from interviews and surveys with sales leaders at top performing pharmaceutical companies, the report allows drug companies to compare and improve their own sales strategies.

Key metrics in the new pharmaceutical sales report include figures for the following areas:

--  Budgeting and Financial Support
--  Structure and Headcounts
--  Product Prioritization, Territory Alignment and Coordination
--  Sales Operations and Contract Sales
--  Training and Development
--  Sales Compensation and Reward Programs
--  Rep Activities
--  Segmenting and Targeting
--  Overcoming Reduced Physician Access
--  Optimizing Time Earned with Physicians

To download a free, online summary of this report, visit

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