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SMITHKLINE ESTABLISHING SEPARATE HOSPITAL SALES GROUP

Executive Summary

SMITHKLINE ESTABLISHING SEPARATE HOSPITAL SALES GROUP as part of an overall reorganization of the firm's sales force, SmithKline said in a Nov. 20 press release. The company noted that the sales organization "will be reorganized into two selling groups -- one concentrated on the physician's office, the other directed at the hospital market." At the same time, SmithKline said it will expand the overall sales force by adding 172 new employees, giving the company a total of "more than 1,000" representatives. The reorganization and expansion should be completed by mid-1986, SK&F President James Cavanaugh said. The new plan follows the trend of several major companies towards sales force reorganization and reflects the influence of cost containment pressures, such as tighter hospital formularies and DRGs, governing hospital sales. Last month, Lilly announced the realignment of its detail force into specialized hospital and physician groups ("The Pink Sheet" Oct. 21, T&G-5). Until now, SmithKline & French has segmented its sales unit by regions, occasionally including members who specialize in hospital work. The specialized sales forces appear designed to help SmithKline focus its efforts on some of the newer hospital products. Because the company has had to face recent challenges to its two top-volume drugs, Tagamet and Dyazide, SmithKline has been limited in its ability to detail new products such as Monocid and Cefizox. The company is also preparing to enter the fray with Glaxo and Lilly for U.S. marketing of ceftazidime. Cavanaugh commented: "This will help strengthen our presence in the pharmaceutical marketplace -- by increasing sales of current products and by positioning ourselves to launch new products coming from our research and development organization."
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