Get your facts straight. Contract companies aren't as cheap as you believe. Salaries aren't 50% of a company Rep. The average Pharma Rep is paid 60-65k. Contract Reps are paid between 50-65k dependent on the contract and the co.
Contrct Reps are still offered benefits, so those costs are passed on to the contracting company plus incremental costs to manage those benefits.
Contract Reps still get cars or car allowances. The cars are usually the same cars available to company Reps.
Contract Reps are still able to participate in retirement savings plans. Maybe not pensions, but they are given a match on 401k contributions. Although the vesting period is much longer usually 5 years.
Plus you pay the contract companies to hire their own staff. This can amount to millions. Consider the contract co. allready has the infastructure in place. All these costs are built into the contract. Think RBD's, DMs, Execs, secretaries...
So it may be less expensive to employ contract sales Reps and certainly cheaper in the event of layoffs, the costs aren't what you expect. I'd guess the savigs are more like 10-20%. For a sales force that doesn't give a shit about J&J.
