Lilly, on Tuesday, announced that it will offer 4,000 sales reps a buyout in hopes of reducing its sales force by 300 before yearâ€™s end. According to a Lilly spokesperson, this is a voluntary exit program for eligible sales force professionals in its diabetes, neuroscience, and osteoporosis business units. Reps have the opportunity to leave the company with an â€œenhancedâ€ severance package based on their years of service at the company.
This program comes in advance of a restructuring program of Lillyâ€™s office-based sales organization in the aforementioned business units. That restructuring will take place in November, with a new sales structure going into effect on January 1, 2010.
â€œWe need to right-size our sales force to the new model,â€ said Lillyâ€™s Edward Sagebiel. â€œTo get to that model we need to lower the head count. However, [this is] not a wholesale layoff like other firms have done, but a voluntary program.â€
Lilly said that itâ€™s also trying to enhance customer interaction and improve efficiency. Currently, the company has its sales force spread through larger territories with a number of reps in each therapeutic area calling on a physician.
â€œWhat weâ€™ve heard from our physicians is that they want to see a more direct response to that interaction,â€ Sagebiel said. â€œ[Doctors] want a single point of contact with the company, and they want to interact with a sales representative that has deep therapeutic expertise, and one that can add value to their relationship.â€
Lilly has developed pilot programs based on a similar model in Ohio and Wisconsin that are showing positive results, according to Sagebiel.