This two-part series explores trends in medical device sales. This week, we discuss the changes in doctor purchasing power and strategies medical device vendors should consider to accommodate additional influencers and account types in their coverage models.

As a group, US medical device vendors missed their top-line growth plans in 2010.   Rather than 6% planned growth, they achieved 4%[1].   Industry leaders cite many contributing factors for the slump, such as lack of demand, decreases in elective procedures, and aggressive contracting by hospital networks.  These leaders now look to the sales organization to help them meet their growth targets.  To aid this acceleration in growth, a number of companies are experimenting with different coverage models.

Decrease in Doctor purchasing power. For many years, US medical device vendors deployed sellers to maximize coverage of doctors.   Vendors determined how many field sales reps they could hire to cover doctors who performed procedures and treated patients with their product type.   Many vendors exceeded sales goals and achieved double-digit annual growth.  The role of the salesperson was to drive clinical interest and develop trusted relationships with doctors.  The most successful sales reps devoted themselves all-out to their doctors’ success, unencumbered by limits on sales rep/doctor interactions.  The institutional affiliation of the doctor was incidental.  This kind of seller made sense when doctors enjoyed near absolute control over device purchasing, wielded veto power over other hospital stakeholders, and determined which vendor reps had access to the hospital.

But now the doctor as an independent decision-maker is disappearing.  Doctors are now one of many competing voices in the hospital supply chain.  The number of doctors employed by hospitals is growing at over 20% per year and, by 2014, one in four doctors will be hospital staff employees.  Hospital purchasing decisions have become a shared responsibility among materials management, purchasing, the value analysis committee, operations, and other hospital stakeholders.

Coverage Model Impact: Vendors must recognize the changing role of doctors in their accounts.  Vendors should focus expensive field salespeople where they are truly needed – in physician preference product categories, in new account conversions, and in other challenging settings.   They can then use lower-cost resources where physician preference has already faded into economics-based purchasing.

For example, greater account targeting is required to separate where doctors still drive the decision vs. where they merely provide clinical perspective to more influential stakeholders.  As the role of the doctor evolves, the vendor sales force must evolve with them.

Learn more about AGI’s Medical Device practice.

Read part 2 of this series.

[1] Alexander Group Medical Device Sales Benchmarking Program.


Insight type: Article

Industry: Healthcare, Medical Device

Role: C-Suite, Sales and Marketing Leadership

Topic: Coverage, Strategy

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