Pfizer is not planning dramatic cuts in its sales force over the next three years - and the withdrawal of the COX-2 inhibitor Bextra is not likely to affect that plan.

Pfizer announced plans to restructure and reorganize its sales force during an April 5 analyst meeting in New York, but said it expects only "modest" reductions in headcount, and has no plans for immediate layoffs.

"We are restructuring the field force in order to better meet the ongoing customer need, and we have sized it to be able to meet both the current in-line product portfolio as well as what we expect in new products over the next several years," Pfizer U.S. Pharmaceuticals President Patrick Kelly said.

"In the end, that will lead to some modest reduction in the overall count of representatives, but that will be achieved through normal attrition and performance management methods," he said.

Pfizer unveiled its forecast for the next three years during the analyst meeting. As expected, Pfizer unveiled an ambitious cost-cutting proposal - but not wholesale cuts in the size of the field force.

Several pharmaceutical companies have begun talking to investors about the need for an industry-wide reduction in sales force expenses - and the risks of being the first to move. Perhaps the most overt example was recent comments by GlaxoSmithKline that it would reduce its sales force if Pfizer acted first (¹ Also see "Waiting For Pfizer: GSK Will Cut Sales Force Should Pfizer Act First" - Pink Sheet, 14 February, 2005., p. 17).

Pfizer CEO Hank McKinnell suggested that any analysts disappointed by Pfizer's move should think instead about the disappointment of Pfizer's competitors.

"We're preserving the competitive advantage of our sales force and further improving in investing in R&D productivity while reducing cost by $4 bil," McKinnell said. "That's what scale and financial flexibility does for you." Pfizer's decision not to significantly cut its force "will be very disappointing to our competitors."

McKinnell re-emphasized Pfizer's position that sales force size should be tied to the number of products to promote, and his conviction that Pfizer has more than enough new products to keep its reps busy.

"Field force size has a lot do with what you have to say," McKinnell said. "And we have a lot to say here."

"We have a lot to do in terms of maximizing the benefit of the in-line products, Lipitor being the most outstanding example, renewing the growth of the COX-2s, and we're going to be launching another 10-12 products over this period."

Pfizer's plan for 2005-2007 assumed that the company would be able market both Celebrex (celecoxib) and Bextra (valdecoxib) in the COX-2 inhibitor class. However, on April 7, the company agreed to withdraw Bextra at FDA's request.

In the near term, the Bextra withdrawal will probably not have a major impact on Pfizer's cost-cutting plan. Celebrex is now the only product actively marketed as a COX-2 and there will be a need for intense physician education once the new labeling for that brand is finalized.

Although Pfizer is not announcing radical changes to the size of its U.S. field force, the company did discuss measures to improve effectiveness.

Pfizer said it would retool the U.S. sales force to create a ratio of no more than two sales reps per product per physician, Global Human Health President Karen Katen said.

The company currently has as many as five reps per physician on some products. Pfizer also plans to reduce its teams to only two or three reps to minimize internal coordination while increasing time spent in the field by reps, Katen said.

The change is similar to steps taken by Merck following the withdrawal of Vioxx . Rather than lay off sales reps, the company redistributed products among sales teams to give each rep fewer products on which to focus (² Also see "Merck Sales Force More Focused, Not Smaller, After Vioxx Withdrawal" - Pink Sheet, 20 December, 2004., p. 21).

Pfizer is also using the reorganization to prepare for the Medicare prescription drug benefit. The company is restructuring its sales regions geographically to parallel Medicare's state-based regions, in recognition that Part D drug purchasers will be "significant" customers in the U.S.

Pfizer Sales Force Stays: Changes Include “Modest” Cuts, No Lay-Offs

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