MERCK SALES FORCE IS ABOVE 2,000 REPS IN FOUR PRIMARY GROUPS

Executive Summary

MERCK SALES FORCE IS ABOVE 2,000 REPS IN FOUR PRIMARY GROUPS following the recent completion of another major expansion effort. Merck Chairman Roy Vagelos announced the completion of the most recent round of sales force hiring at the company's Nov. 3 presentation to New York financial analysts. Noting the shift toward managed care health businesses, Vagelos said "we recently took action to structure our field force more effectively." He reported that the "reconfiguration" of the sales force was "just completed a week ago." Merck added roughly 500 new sales positions during the 1988 round of hiring from an applicant pool of 28,000 ("The Pink Sheet" October 31, T&G-2). The company added about half that number the year before. Vagelos explained that the Merck Sharp & Dohme sales force has been dived into four major groups. Three of the groups, of about 500 reps each, are aimed at office-based practice. One group (comprised of three separate subgroups) will cover institutional sales: hospitals; medical schools and medical centers; and HMOs, PPOs and other national accounts. The hospital sales force alone will total about 500 reps. The other two specialty groups will be smaller. The three sales forces for office-based practices will be divided by product grouping, but Merck will not have the rigid divisions between cardiovascular and antiarthritics that it previously used. The two ACE inhibitors, Vasotec and Prinivil, for example, will reportedly be sold by separate groups. Dispersing products within the same therapeutic category among several sales forces is an approach successfully used by some of Merck's major competitors in the cardiovascular indications for Capoten and Corgard. In the spring of 1987, ICI/Stuart established the same approach to divide attention for Tenormin and Zestril. Vagelos was pressed by one analyst to explain the marketing of the second generation ACE inhibitor Prinivil (lisinopril). Characterizing Merck's approach to the product as a "blunder", the analyst asked why the company was not giving the second generation product more attention. Vagelos said that "Prinivil is doing very well; it is just beginning its ride." He predicted that it "will find its place and be a major player in the angiotensin converting enzyme inhibitor market." Asked more pointedly if Prinivil were a better product than Vasotec, Vagelos commented that "Prinivil has no advantages over Vasotec." He said that the marketing reason for two Merck ACE inhibitors is to crowd the market and make it difficult for future ACE entries. "We know there will be many ]ACE inhibitors[ on the market," Vagelos said, "and it's best for Merck to have numbers two and three than to have number two alone and have other companies have the others."