NEW YORK (Reuters) - GlaxoSmithKline Plc (GSK.L: Quote, Profile, Research, Stock Buzz) plans to cut both costs and jobs using smart selling tactics that rein in some promotion and is confident it will not lose market share, its chief executive said on Monday.
Glaxo has been experimenting with new sales models intensively in the past year and is now ready to implement the changes, Jean-Pierre Garnier told the Reuters Health Summit in New York.
The reforms are a key to a big cost-cutting initiative announced alongside third-quarter results last month. Garnier said there would be "significant" cuts in the group's 24,000- strong global sales force as a result.
"Let's say that in some markets, in some situations, we are able to reduce the sales force significantly without losing market share. But it's not everywhere, at the same time for all products," he said.
Drugmakers as a group spend half as much again on selling medicines as they do on researching and developing new drugs -- a position Garnier said was clearly unhealthy.
"If you had to redesign the pharmaceuticals industry today, you wouldn't end up with spending more on S,G&A (selling, general and administrative expenses) than you do on R&D (research and development)," he said in a telephone interview.
There have been persistent calls for companies to end their marketing race, but Garnier said cutbacks to date have been made mainly in response to former blockbusters losing market share to generics rather than to smarter sales techniques.
Companies fear promoting products less will cause them to lose their "voice" in the marketplace and lead to a slump in sales.
But Garnier is convinced that using face-to-face techniques in a more targeted way means this does not always have to be the case.
"I think that the competition could do the same, but I am not going to give them the benefit of our work," he added.
"We have found a way to change the way we are selling ... this is reducing promotional intensity in some of the markets in which we are competing -- and getting away with it, so to speak."
The shift to lower-cost selling models, however, will not be universal. Emerging markets remain a priority, along with key products that Glaxo believes have above-average commercial potential.
"We are increasing our sales force in China. We are increasing our sales force selling vaccines and oncology products because the pipeline is really at its best in those categories," he added.
(For summit blog: summitnotebook.reuters.com/)
(Reporting by Ben Hirschler; editing by Andre Grenon)
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