Medtech startup offers a cheaper alternative to pharmaceutical sales ‘armies’

Imagine you’re a busy physician at a crowded urban hospital. You’re on the tail-end of a 12-hour shift without a nap or a proper meal since putting on your scrubs. As you dart between curtained-off hospital beds from one room of patients to the next, you spot him out of the corner of your eye. He’s sitting at the edge of the waiting room with his suit and briefcase full of new drug samples – the pharma sales rep. As soon as your eyes meet, he’s already dashing across the tile floor with a business card in hand. “Hey doc, got a minute?” You don’t, but you agree to chat after making the final rounds. Looks like dinner and sweet, elusive sleep will have to wait a while longer.

Pharma sales representatives are an important intermediary between doctors and the manufacturers of drugs their patients rely on. Some patient’s lives literally rely on them – but doctors are busy people, and squeezing in time for a face-to-face meeting at a busy clinic or hospital can be difficult. Moreover, skilled salespeople command high salaries, and hiring a top-notch team of drug reps can cost pharma firms a small fortune.

In Japan, the world’s second-largest market in terms of branded (non-generic) pharma sales, a new medtech startup hopes to streamline the process by putting meetings online – at the doctor’s convenience and at a fraction of the cost to drug makers.

“Right now, the entire promotional model of Japan’s pharma industry has to change,” Marty Roberts, the founder and CEO of EnTouch, tells Tech in Asia. “There are 29 salespeople for every single doctor, compared to nine in the US and two in the UK. It’s an insane army of sales reps saying ‘yoroshiku onegaishimasu’ [a common Japanese phrase that roughly translates, in this case, to ‘nice to meet you’] hoping it will increase product sales.”

The rise of generic drugs

Japan’s pharma companies are bracing for massive policy changes that will open the floodgates for cheaper, foreign-made generic drugs. In 2013, the most recent year that data is available, less than 47 percent of all drugs sold in Japan were generics. This past July, Japan’s health ministry set an ambitious goal of increasing that figure to 80 percent by 2020 – even higher than current adoption rates in the US and much of Europe.

The move is meant to address the country’s steadily rising healthcare costs, an urgent social issue as the population rapidly ages and shrinks. Japan’s big pharma will feel the burn from an influx of generics – despite its high position in overall pharma sales, not even one of the world’s top 10 generic drug makers is Japanese.

“Domestic pharma companies must massively reduce their costs to stay competitive, and the biggest cost is their salesforce,” Marty says, referencing the 2020 deadline. “It’s nearly impossible to fire people in Japan, so many firms push early retirement. Many of the best salespeople, who are nearing retirement age anyway, accept these offers – and they’re exactly who we recruit.”

EnTouch, founded in September, hires these highly-skilled drug reps directly and allows them to work from home with a workstation that it provides (it includes a computer, webcam, phone, and backdrops with EnTouch and client logos). The startup is also encouraging professional women who have left the workforce after having children to join up, as their schedules tend to work with the very early or very late hours required to call doctors.

The startup’s sales rep hiring strategy also follows the Japanese government’s push to increase participation by both groups. Older workers who remain in the workforce reduce strain on pensions and healthcare. A staggering 70 percent of Japanese women never return to the workforce after childbirth, eliminating a huge number of highly-educated potential taxpayers.

Distractions

The EnTouch website, expected to go live next month, allows doctors to prearrange meeting times so they’re not blindsided by in-person visits. It also gives pharma companies a more effective way to communicate their products to a captive audience, free of the distractions that can arise in a doctor’s office or hospital.

A preview of the EnTouch homepage.

“About five years ago, all the big pharma companies bought their sales reps iPads,” Marty says. “They can command so much more attention from doctors with interactive graphs, animations, and stuff like that. But they didn’t solve the main problem, which is that docs don’t have time to play with an iPad at work.”

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