AccessMonitor TM 2015 Executive Summary

For Pharma Reps, a

Challenging Market for
Physician Access Gets
Even Tougher
AccessMonitor TM 2015 Executive Summary

For Pharma Reps,

a Challenging Market
for Physician Access
Gets Even Tougher

Sales reps from pharmaceutical and biotech companies continue to face a tough
environment in trying to communicate directly with physicians. According to ZS’s
AccessMonitor TM study, fewer than half of all physicians in the United States are
now accessible to reps. This continues a downward trend that has shown up
each year since ZS launched the AccessMonitor TM study in 2008.

While some specialty areas are still comparatively accessible (such as urology,
dermatology and rheumatology), all indications suggest that even these
physicians will become less accessible in the future. As a result, pharma
companies will need to maximize the access they can still get, and develop an
effective mix of other channels in order to get their message to physicians.

In this executive summary of the AccessMonitor TM study, Pratap Khedkar, ZS

Associates Managing Principal for Pharmaceuticals and Biotech, and Malcolm
Sturgis, who leads the AccessMonitor TM and AffinityMonitor TM offerings, discuss
the results and provide some guidance on how pharmaceutical and biotech
companies can win in an increasingly restrictive environment.
Physician access for pharmaceutical reps continues to decline and has passed
the halfway point. Throughout the United States, more than half of all doctors
are now “access restricted” to some degree.1 That continues a steady downward
decline in access that has played out for the past decade, increasing the
pressure on pharma sales force effectiveness.

According to ZS Associates’ latest AccessMonitor TM study, which analyzes call

reports from 70 percent of all U.S. pharmaceutical companies sales reps, just
47% of prescribers were considered “accessible” in 2015, compared with 55% in
2013 and 51% in 2014.

Key Findings
When ZS launched the initial AccessMonitor TM survey, in 2008, nearly 80% of
prescribers were considered accessible. Since then, that number has declined
steadily, and just 47% of physicians are now accessible to sales reps (see
Figure 1). “Clearly, there’s some point at which access restrictions will slow
down or even stop, but we’re not there yet,” Pratap says.

ACCESSIBLE PRESCRIBERS, 2008-2015

100%

80%
% of Accessible Prescribers

60%
47%
Most prescribers hard to see
40%

20%

0%
S1’08 S2’08 S1’09 S2’09 S1’10 S2’10 S1’11 S2’11 S1’12 S2’12 S1’13 S2’13 S1’14 S2’14 S1’15

*Based on data for more than 240,000 prescribers

Figure 1. Sales rep access to subscribers has fallen steadily for much of the past decade.

A driving factor in access restrictions is consolidation among providers (which,

in turn, is tied to new regulations, the reforms of the Affordable Care Act and
consolidation by other industry players like insurance companies). Consolidation
leads to centralized purchasing for an entire hospital or health system, and
more doctors working as employees, in which they are subject to institutional
policies and have less autonomy regarding medicines they prescribe. “The
consolidation trend is still evolving,” says Pratap, “meaning it likely has years to
play out, and access restrictions will continue to grow.”

1
Physicians were grouped into three categories: “accessible” (those who met with more than 70%
of the sales reps who called on them), “access restricted” (those who met with 31% to 70% of reps)
and “severely access restricted” (those who met with 30% or fewer of reps).
1
 While such access restrictions challenge pharma companies to get their
marketing messages out effectively, they also lead to waste—in both time
and money. Based on ZS analysis, the pharma industry spends approximately
$1 billion on infeasible sales calls—meaning those calls that companies plan for
and staff but cannot execute (see Figure 2). (The ZS methodology considers a
call to be infeasible if a best-in-class sales rep can’t deliver it.)

While the industry eliminated a lot of waste late in the first decade of the 2000s,
during the era of downsizing, the remaining $1 billion has been a bigger challenge,
says Pratap. “Pharma companies are optimizing the size of their sales force and
their plan, but as restrictions continue, they’re always going to be a bit behind
the trend.” In addition, Pratap says, “Sales calls are so much more effective
than other marketing channels that even if the odds of actually getting in to see a
particular doctor aren’t in the reps’ favor, they’ve still got to try.”

COST OF INDUSTRY INFEASIBLE CALLS, 2008-2015

$3.5

$3.0
Infeasible Calls Cost (Billions)

$2.5

$2.0

$1.5

$1.0

$0.5

$0.0
S1’08 S2’08 S1’09 S2’09 S1’10 S2’10 S1’11 S2’11 S1’12 S2’12 S1’13 S2’13 S1’14 S2’14 S1’15

*Based on data for more than 240,000 prescribers

Figure 2. Waste due to inaccessibility has plateaued for the past several years, and the remaining $1 billion
has been tough to eliminate.

Among medical specialties, some areas continue to be more accessible to

reps, primarily urologists, dermatologists, rheumatologists and allergists (see
Figure 3). Across all four, more than two-thirds of doctors are still accessible.
These areas still often function in smaller, independent practices, which are
often physician owned. As a result, they have not felt the impact of provider
consolidation as directly.

By contrast, oncology and nephrology are the two most restricted specialties, where
just 27% and 19% of physicians are fully accessible to reps, respectively. “These
are very academic specialties where there’s a high degree of clinical knowledge
involved,” Malcolm says. “Treatments are complex and expensive, and practices
are often based in an institutional or academic setting.” Similarly, primary care,
the third most restricted specialty, is experiencing dramatic consolidation right
now, and primary-care doctors face huge time and productivity pressures. In many
cases, they simply don’t have the time to meet with reps, even if they wanted to.

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 Yet while most areas are still largely accessible today, the longitudinal results
of the AccessMonitor TM study over the years indicate they are not likely to
remain so. Consider that five years ago, the accessibility levels for oncology
were approximately where urology is today. “The restrictive specialties aren’t
inherently less accessible,” says Pratap. “They’re just getting there faster.”

ACCESSIBLE PRESCRIBERS FOR SELECTED SPECIALTIES

100%
19%
27%
80% 43% 40%
47% 45% 44%
60% 57% 55%
67% 65%
76% 75% 73%
60%
58%
37% 58%
40% 33%
36% 40% 46%
27% 35% 34%
20% 27% 28%
20% 20%
22% 22% 24% 23%
17% 13% 11% 14% 11% 15%
4% 2% 7% 6% 7% 8%
0%
Dermatology

Rheumatology
Urology

OB/GYN

Endocrinology

Gastroenterology

Neurology

Cardiology

Oncology

Nephrology
Psychiatry
All Prescribers

Allergy

Pediatrics

Primary Care
Accessible Access Restricted Severely Access Restricted
(Reached by more than 70% of reps) (Reached by 31-70% of reps) (Reached by 30% of reps or less)

Figure 3. Some specialty areas are still relatively accessible, but they are all becoming more restrictive
over time.

In addition to specialty practice areas, the study looked at geographical

differences. Specifically, it identified the large and midsize cities that showed
the biggest one-year drop in accessibility (see Figure 4). Notably, all five have
historically been more accessible than the overall national average. “Markets
that we thought were open and accessible are showing the biggest declines,”
says Pratap.

METRO AREAS WITH THE BIGGEST ONE-YEAR DECLINES IN ACCESS

70%
59% 60%
60% 57%
52% 53% 54% 53%
51%
% Accessible Physicians

48% 48%
50%

40%

30%

20%

10%

0%
St. Louis, Knoxville, Dallas-Fort Birmingham-Hoover, Atlanta-Sandy
MO-IL TN Worth-Arlington, AL Springs-Marietta, GA
TX
2014 2015

N: 3,842 1,405 7,869 1,771 5,757

Figure 4. The cities with the biggest declines in access in 2015 were all historically accessible, suggesting
that pockets of accessibility are disappearing.

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One new factor that the study analyzed for the first time was the impact of
medical schools on regional accessibility. As with other trends in the healthcare
industry, many of the earliest restrictions on sales rep access originated in
academic settings, dating back to the mid 2000s. Prior to that point, a generation
of doctors grew accustomed to dealing with pharma reps, starting with their
academic training and continuing into residencies and internships. Today, by
contrast, there is a large group of doctors who have never met with a rep—and
likely never will. This represents a seismic shift in the industry, which the data
clearly shows.

Specifically, the study looks at access in regions where the top-rated medical
schools are based.2 (It considers access among all doctors in those regions, not
merely those affiliated with the school itself.) For regions where one of the top
12 medical schools is based, just 41% of physicians overall are accessible. For
regions where one of the top 50 medical schools is based, just 44% percent of
all physicians are accessible, compared with 47% for the nation as a whole (see
Figure 5). “The correlation is clear,” says Pratap. “Higher-rated schools, which
are typically ahead of the industry in shifts regarding clinical care, seem to be
ahead of the industry regarding restrictions on access as well.”

Malcolm echoes this sentiment. “In the places where doctors are training, the
places where academic work is being conducted, where journal articles are
being written and where attitudes about the industry are being shaped among
tomorrow’s generation of physicians, pharma has less access, by quite a bit.”

PRESCRIBER ACCESS BY GEOGRAPHY

School % Accessible
Top 20%% metro areas Symbol
Category Physicians
(least restricted)
estricted)
Top 12 41%
Top 50 44%
(None) Other 48%
Bottom 20% metro areas (most restricted)

Figure 5. The presence of a top-ranked medical school tends to reduce access among all doctors in
the region.

2
Ratings are based on the most recent U.S. New and World Report rankings as of 2015.
5
Looking specifically at the doctors who graduated from those groups of medical
schools—as opposed to all doctors in the regions where the schools are
based—the shift is even more dramatic (see Figure 6). For the top 12 schools,
the universe of physicians at all 12 fall below the national average in terms of
access—and often far below. For Harvard, the top-ranked school, just 30% of
graduates are accessible to reps. Most are below 40%. Looking at the top 50
schools, the numbers are only marginally better, and most are still below the
national average. “The thought leaders in the industry—and the people who will
be most influential in the future—are incredibly hard for the industry to see,”
says Pratap.

GRADUATE ACCESS BY MED SCHOOL GROUP

University of California, San Francisco, 34%

School % Accessible School % Accessible
Graduates Graduates
Washington University, 43%

University of Utah 51% Mercer University 58%

University of Pennsylvania, 38%

70%
Johns Hopkins University, 37%
University of Michigan, 40%

University of Alabama 51% University of Mississippi 57%

Columbia University, 38%

University of Miami 51% University of Louisville 56%

Duke University, 41%

University of Washington, 31%

University of Chicago, 34%

60%
Stanford University, 33%
Yale University, 38%

Harvard University, 30%

50%

40%

30%

20%
School % Accessible School % Accessible
Graduates Graduates
Dartmouth University 36% Medical College of Wisconsin 38%
10%
University of Wisconsin 29% McGill University 36%
University of Minnesota 26% University of Massachusetts 32%
0%
Top 12 Med School Top 50 Med School Other Med School

Figure 6. Physicians who graduate from higher-ranked medical schools are much harder for reps to
call upon.

Last, given that consolidation is a driving factor in reducing access—and a trend

that will continue to play out over the next several years—the study data looked
at 20 markets that have experienced major consolidation. Specifically, it gauged
the impact of 25 large health system mergers by looking at access in the region
before the deal and 12 months after the deal closed. Perhaps predictably, 19
of those 25 led to lower access for sales reps (see Figure 7). The bottom line:
While the overall market is declining, the presence of a merger will accelerate
that decline in a particular market. “In some cases, the declines were as high
as 4 percentage points over and above the general decline in other areas of
the country,” says Malcolm. “Imagine 4% of your customers disappearing in a
matter of months.”

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SHORT-TERM IMPACT* OF MERGERS
Pre-Merger Access Level vs. Industry Change in Access vs. Industry
12%

8%

4%
Access vs. Industry
Above-Average Access
0%
Below-Average Access

Charlottesville, VA
-4%
(2011)
Atlanta, GA
(2014) Boston, MA
-8% (2010)
Durham, NC
(2011)
-12%
Manhattan, NY
(2013)
-16%

*“Short-term impact” was defined as the greatest drop in access within the first 12 months after the noted merger

Figure 7. Of the 25 largest mergers, most led to even greater declines in access over the 12 months after
the deal closed.

Implications for Leaders at Pharma Companies

Given these profound shifts in the industry, and the strong likelihood that they
will continue over the next several years, the question becomes, how can
pharma companies best respond? Clearly, a personal connection still has the
strongest impact, so companies should continue to leverage that in the markets
and specialty areas where they still can. However, they should expect to see
steadily greater restrictions in the future, in virtually all regions and all practice
areas. “If you’re still lucky enough to be in an accessible market or specialty,
don’t expect that will last,” says Pratap. “All the survey data points in the same
direction, downward, and five years from now, you’ll be in trouble.”

To complement sales reps, companies also need to take a comprehensive view

of marketing. In addition to sales reps, there are other means by which they can
get their message out, such as various digital channels, speaker programs and
other promotional tools. “They may not be as individually impactful as rep calls
you’re used to,” says Malcolm, “but you can’t fight the restrictions in access.”

More important, the ability to understand how doctors want to receive content—
in which communication channels and formats, and how frequently—will
become critically important in the future. ZS’s AffinityMonitor TM offering can help
pharma companies understand these preferences, in order to tailor the most
effective marketing plan for each individual physician. “In the big picture, sales
calls by reps are only one aspect,” says Pratap. “Other channels can effectively
supplement those calls.” In addition, digital channels are far less expensive and
have the potential to be far more precisely targeted and measurable.

In other words, pharma companies may be losing their most effective tool,
but they have other tools available—they just need to become more adept at
using them.
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About the Experts
Based in Philadelphia, Pratap Khedkar is ZS’s Managing
Principal for Pharmaceuticals and Biotech. He has
advised many pharmaceutical and healthcare companies
on a wide range of sales and marketing issues, including
multichannel marketing, marketing mix, promotion
response measurement, managed-care issues, sales
force strategy and incentive compensation.

Malcolm Sturgis is an Associate Principal with ZS

Associates in Evanston, Ill., where he leads ZS’s
AccessMonitor TM and AffinityMonitor TM offerings. Malcolm
has advised pharmaceutical and biotech clients on a
range of strategic marketing issues, including brand
strategy, opportunity assessment, investment
optimization, multichannel planning and sales
force design.

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About ZS
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performance through sales and marketing solutions, from customer insights
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ZS professionals in 21 offices worldwide draw on deep industry and domain
expertise to deliver impact where it matters for clients across multiple
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