Why Pfizer's Deal with Protalix Is Bad News for Big Pharma Sales Reps

(MoneyWatch)  Pfizer's partnership with Protalix BioTherapeutics (PLX) for Gaucher's disease drug Uplyso (taliglucerase alfa) offers one more piece of evidence that the days of traditional big pharma sales reps are limited.

Big pharma has been under pressure to cut its sprawling sales forces for years, and most of the big players have bowed to that pressure, including Sanofi-Aventis (SNY), Merck (MRK) and Pfizer (PFE), among others.

Many folks in the drug industry predict this is just the beginning. With big blockbusters in primary care markets going off patent and healthcare reform putting drug prices under pressure, several pharmas have shown more than a passing interest in niche markets, where drugs serving truly unmet medical needs have an easier time commanding high prices. Add to that the growing trend of using biomarkers to better define patient populations, and you've got a recipe for much smaller markets.

During a recent conference, Joe McCracken, vice president of business development at Genentech (DNA), questioned how much longer pharma will pay sales reps to bring coffee and donuts into clinics. He predicted that the future pharma sales model will be less focused on detailing more focused on running call centers to help patients with reimbursement.

The Pfizer/Protalix deal fits this new business model perfectly. Gaucher's disease is a rare genetic disorder affecting about 1 in 20,000 live births. Genzyme's (GENZ) market-leading treatment Cerezyme (imiglucerase) costs about $200,000 per year and generated sales of $1.2 billion in 2008. When asked how Pfizer intends to market Protalix's Gaucher drug, Andrew Curtis, director of biosimilars and orphan drugs, said he viewed the opportunity as "more of a medical education effort" with significant focus on helping patients with reimbursement.

The Protalix deal is Pfizer's first move into ultra-orphan diseases with high unmet needs ?€" but it won't be the last. Curtis said Pfizer formed a special team early this year to investigate such opportunities, which he called "significant." And as the New York Times notes, GlaxoSmithKline and Novartis have made similar moves.

Death of a Salesman image by Flickr user Howdy, I'm H. Michael Karshis, CC.