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What Eli Lilly's job cuts mean for the future of sales jobs

Eli Lilly & Company in Indianapolis, Ind.

Things aren't getting any easier for pharmecutical salesmen. Drugmaker Eli Lilly announced it's sending pink slips to 30 percent of its U.S. sales force, which works out to about 1,000 people.  Patents are expiring on two of the company's marquee drugs, so competition from generic brands is about to put a big dent in Eli Lilly's bottom line.

The company loses the patent on its antidepressant Cymbalta in December. Next March the game is up for the osteoporosis drug Evista. "Our U.S. revenue with those two medicines makes up about one-fifth of our corporate revenue," says spokesman Scott MacGregor. "It's a pretty significant impact."

When patents expire, generic drug makers will swoop in and sell the product for much cheaper. MacGregor says Eli Lilly is ready to make up for some of the losses, expanding a different sales team to push a new diabetes drug.

But there's something else that's threatening the livelihood of pharmaceutical sales reps. Their relationships with doctors are more restricted after controversy erupted over lavish spending on gifts and expensive meals in exchange for business.

MacGregor blames new health care regulations that further restrict a doctor's time. "That inherently changes the nature of the way they want to interact with us," he says. "And certainly we continue to see access restrictions, particularly in big academic institutions." 

So what's a drug company to do? For one, go digital, says Perdue University College of Pharmacy Dean Craig Svensson. "Certainly there are ways of providing information that used to be only by the sales force that now you can provide it digitally," he says, "and it doesn't require that salesperson to interact with the physician or other health care provider face-to-face."

Svennson says using pop-up ads on websites targeted to doctors is becoming more common, along with social media. He says health care providers are also more distrustful of biased information. So a hospital might form an advisory board that makes recommendations on what drugs to perscribe, leaving the sales rep out of the equation.

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