Biotech Pharmaceuticals Expanding July 1st, 2006
Pharmaceutical executives take heed – biotechnology firms and specialty pharmaceuticals corporations are the industry giants of tomorrow, according to a national survey.
While sales force expansion remains stagnant for Big Pharma, biotech and specialty companies are the one’s to watch, notes Hay Insight’s 2005 Pharmaceutical Sales Force Effectiveness Study, conducted in partnership with Pharmaceutical Executive.
Most companies target the market median for base pay, saving their more competitive posture for incentive compensation. Companies are trying to spread the wealth by lowering the threshold required to receive an incentive payout. The targeted positioning of incentive compensation has shifted slightly downward relative to the market median over the past few years.
Qualitative measures for determining incentive compensation are currently out of vogue. Almost half of the surveyed companies pit their reps against one another with relative ranking to allocate incentive compensation. The complexity of incentive compensation plans often blurs the distinction between levels of performance, and thereby minimizes pay differences.
Staffing: Turning a corner three years ago, we asked in a Pharm Exec Sales Force Survey how long the pharmaceutical industry could continue expanding its sales force.
Today, if Big Pharma’s sales-force bubble has not quite burst, it is definitely deflating. None of the survey participants representing big companies predicted that their sales force would grow "somewhat" in 2005, much less grow "a great deal." In contrast, 15 percent of the biotech companies and 22 percent of the specialty pharma companies surveyed planned to grow "a great deal" and another 65 percent and 18 percent, respectively, planned to grow "somewhat" over the course of 2005.
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