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Ranking of 20 Drug Companies by Sales Force Effectiveness Shows Improvement in Q1

A ranking of 20 drug companies by sales and marketing productivity shows that 13 companies saw upward trends in effectiveness in Q1 2009. Only four were trending up last quarter.

At the top of the table, as expected, is AIDS drug specialist Gilead. Its score -- $7.50 earned in sales for every $1 spent on marketing -- asks the question, can it test the $8 barrier? Gilead has nearly double the sales and marketing leverage of its nearest competitor.

At the bottom of the table is vanity pharma play Medicis. Its results were harmed by a recession-triggered decline in sales for skin and face treatments, and costs for the run-up to its launch of Dysport, a competitor to Allergan's Botox.

Medicis and Allergan's low productivity prove that being a specialist doesn't always mean greater operating leverage; especially if many of your products are not reimbursible. That's important because Pfizer has considered getting into the cash business and Johnson & Johnson recently bought Mentor for the same reason.

Sanofi-Aventis maintained its spot as the most effective of all the Big Pharma companies, and overtook Teva to claim the No. 2 spot.

The duel for 4th and 5th place is interesting because Teva fell from 2nd, indicating that the generic specialist is becoming more inefficient as it grows; whereas Pfizer is proving that massive doesn't always mean inefficient.

Bristol-Myers Squibb was the most improved, on lower costs and higher sales of Plavix and Abilify. Perhaps the "String of Pearls" strategy is working?

GlaxoSmithKline stabilized after a disastrous Q4; and Johnson & Johnson also appears to be doing well.

Sepracor moved off the bottom but only because we replaced Genentech (now engulfed by Roche) with Medicis. Yes, that's not an equal swap, but the purpose of the table is to compare a wide range of companies.

  • 20 Drug Companies Ranked by Sales and Marketing Efficiency*
  • 1. Gilead, 7.50, up
  • 2. Sanofi, 4.10, up
  • 3. Amgen, 4.06, flat
  • 4. Teva, 3.93, down
  • 5. Pfizer, 3.78, up
  • 6. BMS, 3.61, up
  • 7. Wyeth, 3.38, up
  • 8. Lilly, 3.30, up
  • 9. Merck, 3.30, flat
  • 10. J&J, 3.26, up
  • 11. Novo, 3.25, up
  • 12. AZ, 3.24, up
  • 13. Abbott, 3.24, down
  • 14. Novartis, 3.08, up
  • 15. GSK, 3.08, flat
  • 16. Schering, 2.94, up
  • 17. Shire, 2.56, up
  • 18. Sepracor, 2.14, up
  • 19. Allergan, 2.08, down
  • 20. Medicis, 1.42, down
  • * Source: Companies' quarterly earnings statements
Methodology: 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. The majority of SG&A costs are sales force and advertising expenses. The yield is a rough guide to how well a drug company martials its marketing resources each quarter. Results were compared to the previous four quarters to identify a trend.
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