Pharma ethics
Ravi Speaks:
Looking to the present-day market scenario for the sales of the pharma goods-the situation seems to get stagnant & tightened unless some extraordinary efforts with the innovative approaches are not employed by the field forces of the various pharma companies for the enhancement of sales. The growth despite Covid-19 has not really been the good one in the recent 20-21 period. The concern at present is the hit to the field force at the grass-root level where the Medical Representatives go into the tight corners while dealing with their stockists in reaching their stipulated targets and in the bargain are forced to certain infringements-which are discussed in this beautiful article giving the actual real picture of the present pharma scenario in India. This has been extracted from my book on sales-“38 years of selling“.
“Adjustments To Pharma-Stockists For Reaching Targets Defeat Ethical Approach.”
Updated on
April 3rd,2023.
Never forget one basic rule a stockist is a businessperson to the core. If someone thinks that he could be simply controlled for your gains without really getting yourself affected, then you are on the wrong track. Because till the time he does not get his due profitability component, he cannot be befooled at any cost. The disturbing trend nowadays in the high level of competition is the actual sales of a territory getting stagnant or even reduced further. The reason for that is the low effort level for the enhancement of sales from the field force and the high level of exploitation happening at the stockist level in getting the immediate required purchase to reach one’s stipulated time-bound targets.
Look at the basic mechanism of getting exploited by the so-called helping or favoring-stockists. Every company gives the set discount as the stocklist’s discount and it is this attraction on which the stockist operates for his profitability to be earned. If this discount coming to stockist from the company gets diminished because of reduced sale-component-the stockist slowly and steadily starts losing interest in the same company. The loss in the profitability is then compensated by many unfair means by the concerned field-force of the same area-where the stockist is operating. Here instead of putting hard efforts to increase the sales, the concerned person in the field adopts unfair techniques like giving some percentage to the stockist under the table and inducing him to the additional purchases. The stockist being a proprietor calculates his profitability and once he realizes that his basic amount which according to him should have come from a particular company is coming to him-he enters the deal accordingly and this way the poor field man gets entangled into the vicious cycle of the stockist-dealings. Had it been just for one transaction, then it would not have been a sort of exploitation to the larger extent. Because there are many bigger companies too who towards the end of their sales year for want of some extra amount to be purchased induce their stockists for that extra to be purchased by giving them some allurements or additional schemes or even the cash at the closure of the sales year. This onetime transaction the field force does not take to be amounting to some bigger compensation. Because here the annual targets are being achieved and even the companies declare some additional allurements as special schemes, etc.
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| Stockists Play On Price Match To Maintain Their Profits. |
The problem lies especially where the field force gets entangled in the vicious circle of stockists getting additional purchases against the additional compensations. In such a case the actual sales are not being focused accurately by the field force and since they have developed the way of getting the easy additional sales from the stockists to cover up the shortfall in the actual sale a happening month after month-they feel to be cool on the front of putting an extra effort for creating additional sales which have been decreased over time.
Unfortunately, as is being observed now in the field -there has been the involvement of some managers in such a scenario and stockists also have become very bold and courageous to ask for the set percentages from such field force people. Thus, the ones who have gone into this vicious circle are getting themselves more and more involved in such acts on a regular basis and a stage is coming during their annual sales year-where they realize they do not have any earnings left out of such unfair acts. But then it becomes too late for them.
In such extreme conditions, the company also gets affected badly since such people show their dubious character of selling the company’s samples and even the gifts which they get for the doctors and that way try to fulfill their stockist’s commitments. The net result is –‘loss of an actual generation of sales through lack of proper input utilization by the field force.’ Since the required samples and gifts are not being distributed as per the company’s monthly marketing strategies and plans-there is the natural response comes as lesser prescriptions and lesser creation of sales in such places.
This never used to be there earlier in our times so much but as is reviewed now from the talks and stockists openly declaring their deals- the word ethical selling has taken the back seat and instead of immediate-sales there is immediate purchase with the help of the above allurements to the stockists. This immediate purchase may help the field force for an immediate time, but because of the loss of actual sale demand in the market, the stockists too would keep the additional stocks only to some limit. In case the stocks purchased do not get liquidated fast-there would be a ‘full-stop’ to the further purchases and even a stage might come when the same stockist would return the goods to the Depot despite getting all the compensations for that additional purchases.
This exactly would lead to appointing of no return at one stage. The only remedy to all such disturbing scenes would be to put in the best of your efforts in the field and create the additional demand badly needed so that the stocks piled up are also liquidated fast and the sales show consistency and things would return to normal only in such a scenario.
I remember in 2010 there was such an adverse scene exposed in Delhi in Himalaya-where the company management exposed the vicious cycle of unfair dealings between the stockists and the field force, including certain managers as well. The management took a very bold step that time and shunted out the managers involved in it as well as some boys, too. Further, the top Sales Manager of the same affected Pharma division was also transferred to another SBU immediately and then this affected division started slowly and steadily improving in its basic work of creating the demand. The challenge in this division was to re-create the work culture back-which had gone for six. So, this division started from the basics again and reps started putting in the real efforts to get this division back on track.
Things in the pharma industry seems to happen the same way where the stockists are trying again to exploit the various company-field forces attached. It is for the field force to realize the adverse effects of such wrongdoings and high time for them to get things back on track simply by putting hard efforts into applying the basics sensibly and ethically in the field. Then only they would enjoy the journey in Pharma with high dividends.
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