Ranking of 20 Drug Companies' Sales Forces Shows Productivity Flat or Declining

(MoneyWatch)  A ranking of drug company sales productivity shows Gilead gets the most revenues in return for every dollar invested in reps and marketing.

At the other end of the table, Sepracor gets the least bang for its sales, general and administrative buck (see table below).

The ranking also shows there appears to be very little relationship between size and productivity. Some large companies, like Pfizer, are near the top of the table, while the lower end has its fair share of smaller operations such as Shire.

That potentially indicates that sales force efficiency is more a factor of product mix than it is of the efficiencies of scale often cited by pharma management.

Gilead, the runaway most efficient generator of its own revenues, has a portfolio concentrated in specialist HIV drugs. Sepracor, however, is more concentrated in insomnia and asthma -- areas handled by primary care physicians, many of whom are disinterested in seeing reps.

The second and third most efficient companies, Teva and Genentech, are in very different businesses. But like Gilead they are mid-size companies and have specialties, Teva in generics and Genentech in biotech and cancer. There seems to be a significant advantage in specializing.

Also of concern: Most companies' sales productivity is trending flat or down. Of 20 companies looked at, only four appeared to have efficiency levels trending up.

The bottom of the table contains some worries for very large companies AstraZeneca, GlaxoSmithKline, Schering-Plough and Novartis. Companies of that size ought to be able to save some money from efficiencies of their massive scale, but their ability to generate revenues is still magnitudes lower than lumbering giants such as Sanofi-Aventis, Abbott Labs and Pfizer. BNET produced the numbers by dividing a company's revenues by its spending on SG&A, producing a revenue yield per $1 of SG&A. Those results were compared to the previous four quarters to identify a trend.

• 20 Drug Companies Ranked by Sales and Marketing Efficiency*
• Rank, Name, Yield, Trend
• 1. Gilead: 7.37 Up
• 2. Teva: 4.19 Down
• 3. Genentech: 4.15 Up
• 4. Sanofi: 3.64 Flat
• 5. Abbott: 3.46 Flat
• 6. Pfizer: 3.37 Flat
• 7. Amgen: 3.31 Down
• 8. Wyeth: 3.25 Flat
• 9. Merck: 3.24 Down
• 10. Lilly: 3.20 Flat
• 11. BMS: 3.03 Down
• 12. Novo: 2.94 Up
• 13. AZ: 2.87 Down
• 14. Novartis: 2.74 Down
• 15. Schering: 2.69 Flat
• 16. J&J: 2.68 Down
• 17. GSK: 2.53 Down
• 18. Allergan: 2.44 Down
• 19. Shire: 2.26 Flat
• 20. Sepracor: 2.18 Up
• * Source: Companies' quarterly earnings statements