Lilly Sales Force Buyouts Revealed

Lilly, on Tuesday, announced that it will offer 4,000 sales reps a buyout in hopes of reducing its sales force by 300 before year’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 “enhanced” severance package based on their years of service at the company.

This program comes in advance of a restructuring program of Lilly’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.

“We need to right-size our sales force to the new model,” said Lilly’s Edward Sagebiel. “To 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.”

Lilly said that it’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.

“What we’ve heard from our physicians is that they want to see a more direct response to that interaction,” Sagebiel said. “[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.”

Lilly has developed pilot programs based on a similar model in Ohio and Wisconsin that are showing positive results, according to Sagebiel.