The Physicians Payments Sunshine Act was passed as part of the Affordable Care Act a few years ago and enacted quite a few changes within not only the medical and pharmaceutical worlds but the sales world as well.
These new regulations, often referred to as the Sunshine provisions, were intended to create more transparency surrounding the relationships between doctors and medical companies, with the ultimate goal of reducing the impact of marketing on physicians’ treatment decisions. A recent article published in the New York Times uncovered that certain gifts and payments from medical sales reps did, in fact, influence physicians, resulting in higher healthcare costs for patients (medications, treatment options, etc.). It’s almost certain that this type of practice had gone on for many years, either un-reported or severely under-reported.
A September MedReps article highlighted a few facts about the newly-enacted Sunshine Act, including how the act requires medical manufacturers to report all financial payments and exchanges of value (over $10) made to physicians. Payments are reported to the CMS and then published on a public website, where anyone can see how much money a specific doctor has received from a given company.
Problems Facing Sales Reps
Sunshine will likely make it harder for sales reps to access doctors. Fears about the implications of appearing on a company’s website, and eventually a government website, may limit the type of interactions doctors are willing to have with reps. Many doctors will put the brakes on fancy dinners with reps, and for some, even a catered lunch for their office could be off limits. As early as 2012, several posters on Café Pharma claimed that doctors were already citing the Sunshine Act as a reason for closing their doors to reps.
Another problem potentially facing reps will be the increased difficulty of filing expense reports. While the Sunshine provisions don’t require the reporting of a gift of less than $10, if the gifts to an individual add up to $100 over the course of the year, each item must be reported. This means every gift – no matter how small – must be carefully tracked, ultimately increasing paperwork for reps. These reps will have their share of reporting to do, and they may find their customers a bit more standoffish, according to a 2012 MedReps article about the potential of the Sunshine Act to negatively affect medical sales reps.
As pharmaceutical reps get less and less face time with providers, the pharma sales model will likely need to transform to a more digital process.
The move to digital in pharma sales is already underway. A 2013 survey of 200 pharma execs conducted by Accenture found that close to one in four direct sales force interactions migrated to digital interactions with doctors, providers, payers, and patients.
In addition, a 2014 Quantia survey found that 76 percent of physicians surveyed actually preferred to receive information about new drugs, products, and indications digitally. See more about that study here.
What Does The Future Hold?
From January to July of this year, the pharmaceutical industry cut 6,334 jobs, according to data from Challenger, Gray & Christmas. What’s more, many of these cuts occurred within the sales team. A similar report from Cegedim Strategic Data found that the U.S. pharmaceutical sales force shrunk by 2 percent from 2013 to 2014 to a total of less than 65,000 pharma sales reps.
So, will the Sunshine Act effect how medical sales reps do their jobs? Most likely. However, while the outlook may seem bleak, the best pharmaceutical and device sales reps – those who bring the most value to their employer – will be kept around despite mergers and acquisitions. These reps will quickly adapt to changes within the industry and will approach sales with the attitude of providing information to physicians and building trust, not just relationships, according to this article. Going digital may be a solution as well, making face-to-face meetings quite obsolete, but allowing for quicker, simpler interaction with the easy touch of a few buttons.
