Sales Force of the Future

1. Sales Force of the Future Presented to: The Pharma, Biotech & Device Colloquium June 7, 2004

2. Coverage Points • Future Truths We Hold to be Self-evident • Future Sales Force: “3F” Principles of Design • Fusion • Flexibility • Fit • Getting There • Barriers to Design Principles • Summary

3. Future Truths We Hold to be Self-evident • Physicians prescribing behavior will match product to patient subject to patient then payer influence • Success in satisfying unmet clinical needs first will drive therapeutic market dominance • Blockbusters will derive from bold investments in research, development • Blockbusters will be built to reach all healthcare professionals, payers and patients • The meaning of critical mass will forever be reinvented • Drugs will remain political and by extension high margins are a privilege, not a right • Exclusivity periods for drugs will be continually challenged by fast followers, IP attacks and other “unfriendly threats” • Healthcare technology’s ability to change behavior will elude our ability to predict the timing, pace and implications of change

4. Notable Implications • A much more fluid, dynamic environment is predicted • Capacity for and ability to change will be critical • Operational capabilities will need to reflect this environment This provides the context for sales force futuringdraws a set of conditions upon which we have viewed the sales force of the future

5. Future Sales Force: “3F” Principles of Design 1st Principle: Fusion • Representatives will act as “Integrated Content Delivery Systems,”fusing a variety of mediums and channels to connect healthcare professionals to product content experiences Corollaries: • The sales representative will be the centralized conduit, personally connecting healthcare professionals to product content • The sales representative will deliver content in two fundamental mediums: • Personally via 1:1 interactions • Digitally via interactions customized to mediums of choice by healthcare professionals • The sales representative will have the ability to distribute content at two levels, 1:1 and 1:(1+X)

6. Future Sales Force:“3F” Principles of Design 2nd Principle: The Flexibility Formula • Manufacturers will be able to increase/decrease totalsales force size by X% on 12 –24 weeks notice, for periods of up to 18 months, with 0%increase in permanent overhead Corollaries: • A core sales team will exist • The total sales force is a flexible resource, surging and shrinking with periods of growth or attack and periods of market reduction or defense

7. Future Sales Force:“3F” Principles of Design 3rd Principle: Fit, for Purpose • Sales Force will be tiered, with tiers tied to product lifecycle stage to maximize product margin Corollaries: • There are 4 phases of product lifecycle (Periods are subject to market conditions and brand lifecycle mgmt, strategies) • Launch Period (-18 months to +18 months) • Growth (+19 months to 36 months) • Maturity (+37months to 60 months) • Decline (+60 monthsexpiration) • One sales force cannot support all phases of a product’s life cycle to maximize margin opportunity • The points of change in a product life cycle must be clearly marked

8. Pharma Field Force of the Future Reminding/Harvesting Leveraging/Reinforcing Investing/Establishing Supplemental Core Core Sales Force Harvest & Support Team Semi-Permanent Permanent Highly Flexible • Market Development • Product Launch • KOL relationship • Relationship-Driven • Drivers Growth • Defends Competitive Threats • Raises Barriers to Entry • Trained & equipped for brand maintenance Profiles of Teams hired, engineered and supported for specific purpose

9. Getting There • Fusion Principle • Increased investment in enabling technologies • Broadband Infrastructure • CRM Capability • Internet-driven content & communications systems • Cultural: Representative as center point for all product content • Flexibility Principle • “Plug & Play” Partnerships with fully integrated systems architecture • Cultural: Sales force is a flexible asset • Fit Principle • Brand scorecards clearly underscoring points of change in lifecycle • Cultural: Sales Force is ubiquitous, but tailored and tiered

10. Barriers to 3F Principles We’ve Heard • Can’t Disarm, Big Sales Force is Still Working • Not calling for disarmament, suggesting redeployment that can still provide current SOV and higher return on sales, which has declined 25% last 4 years • Current Sales Force critical bridge to Pipeline • Current forces, on an industry basis, spend 35% of time on mature and declining products; inefficient • Flexibility requirements are daunting • Principles of Just in Time inventory management have revolutionized the business cycle; the idea here is the same • Fusion is happening now, not new • Rep role is tough; engineered for dynamic interpersonal contacts with physicians but increasingly pushed to drive promotional events as real content delivery medium; small meeting market has a ___% CAGR last 5 years

11. Sales Force of the Future Success in future will recognize: • Shifts in representative role from primary agent for driving treatment change to hub for Integrated Content Delivery System • Emerging trends in IT enable return to content-rich selling and improved customer experience • Inflection points connecting Launch-Growth-Maturity-Decline can and must be clearly marked • Traditional allocation strategy of “one size fits all sales force” is inefficient and can be replaced by tiered sales force structure “fit to purpose” • Greater flexibility is critical to cope with faster market forces