Why Amgen Doesn't Want a Big Sales Force for Denosumab

(MoneyWatch)  Amgen wants to market its new twice-yearly osteoporosis injection, denosumab, without a massive sales force.

Instead, the company said it wants to rely more heavily on the internet. The move will produce an interesting experiment that tests whether companies really need heavy sales forces to sell blockbuster drugs (the company expects denosumab to earn $1 billion-plus in revenues annually).

For years companies have suspected that clinically superior drugs sell themselves, and that reps driving around the countryside in company cars are an inefficient way to sell product. Amgen currently believes large sales forces are "outdated." Amgen may have been tempted into this conclusion by its own recent experience. According to its third quarter earnings call, Amgen's sales reps produced $4.31 in sales for every dollar spent on their salaries and cars. That's a pretty decent result -- higher than the industry average.

However, it is still down from this time a year ago. In 2007, Amgen got $4.95 for its money, because it spent an unusually low amount on sales and marketing. It is difficult to reconcile those numbers and conclude that large sales forces boost sales.