December 18, 2013
Major Drug Company Stops Paying Docs To Market Meds
Rebekah Eliason for redOrbit.com – Your Universe Online
Amid accusations of bribery and scandal, GlaxoSmithKline (GSK), one of the leading drug makers, will stop paying doctors to promote its drugs and cease targets for number of prescriptions filled for the marketing staff. This is a first for the giant drug company, which has long been fighting scandals over its sales practices. Such a huge step is a major challenge to other drug companies and could force them to follow their example.
In addition, Britain’s largest drug maker said on Tuesday it will no longer pay healthcare professionals to attend medical conferences. This is an attempt to persuade skeptics that it is addressing any conflict of interest that might put commercial interest ahead of the needs of patients.
In recent years, the entire drug industry has been accused of overly aggressive marketing tactics. This bold new policy adaption by GSK may force other companies to adopt similar policies. Fiona Godlee, editor of the British Medical Journal and an influential campaigner against undue industry influence in medical practice, told Reuters, “Where GSK leads we must hope that other companies will follow, but there is a long way to go if we are to truly to extricate medicine from commercial influence. Doctors and their societies have been too ready to compromise themselves.”
The extreme policy shift by GSK comes about as a response to a major bribery investigation in China. Police have accused the company of channeling up to 3 billion yuan ($494 million) to travel agencies that will facilitate bribes to doctors who boost their drug sales.
Although this investigation is still underway, GSK claims the measures are not a reaction to the problems in China, but part of a broader effort to improve transparency.
Many companies in the United States, which is the industry’s largest market, have had conflicts about sketchy sales tactics. Last year, GSK reached a record $3 billion settlement with the US government. The case was related to charges that the company provided misleading information about certain drugs.
Several other firms have taken some measures to improve their marketing practices. Under new US healthcare laws, doctors are forced to disclose payments they receive. In Europe, similar laws will soon require drug firms to make the names of doctors they have paid public. This new policy will take effect from the start of 2016.
Richard Bergstrom, director general of the European Federation of Pharmaceutical Industries and Associations said, “This will undoubtedly change behaviour and trigger a re-think of how some forms of continuing medical education are organised and funded.”
As a result of the Chinese scandal and the resulting dip in sales, share in GSK slid 1.4 percent against a 0.3 percent dip on London’s blue-chip FTSE index.
Collin Mclean, managing director at SVM asset Management, holds shares in several drug makers including Pfizer but not GSK said he would welcome other firms following GSK’s lead.
He said, “Given the problems Glaxo had in China, it is important for investors to understand, at a deeper level, just how incentives work through an organization.”
In 2011, AstraZeneca announced it was stopping payments for doctors to attend international congresses. Until this even further action by GSK, other companies did not follow suit.
A spokeswoman from AstraZeneca explained on Tuesday that the company’s practices were tightened so as not to be perceived as an inducement for doctors to prescribe its products.
Other major drug companies did not have officials immediately available to comment.
Tim Reed, head of Health Action International, an Amsterdam-based non-government organization critical of Big Pharma, said The GSK move would increase the pressure on other companies.
“I think other companies will follow suit - but one of the biggest problems is that the industry persists in regulating itself,” he said. “The only way to properly control promotion is strong and enforced regulation by the state.”
Andrew Witty, GSK’s chief executive, explained in a statement that the company’s actions were designed to ensure that patients’ interests always come first.
“We recognise that we have an important role to play in providing doctors with information about our medicines, but this must be done clearly, transparently and without any perception of conflict of interest,” he said.
Throughout its history, the global drug industry has heavily relied on the influence of experts promoting products. Deciding to stop payments to doctors for speaking about medicines in meetings with other prescribers is a monumental shift.
GSK announced it planned to execute this new marketing policy and a related measure to stop paying for doctors to attend medical conferences by the start of 2016. Currently, industry sources estimate that GSK spends approximately 50 million pounds ($82 million) per year to pay doctors to speak at or attend conferences.
Following a successful test run in the United States, GSK’s sales representatives will see a change in payments implemented sooner. In the US, payments have been separated from the number of prescriptions given since 2011.
Globally, the policy of targeting individual sales will be ended. GSK announced it planned to begin new systems for compensation in all countries as soon as early 2015.
In the US the ‘Patient First’ program pays commercial staff through a mix of qualitative measures and overall business performance instead of the number of prescriptions filled.
This decisions is somewhat pragmatic since a large number of the decisions about which drugs to use are made centrally by big insurers and governments, based on cost-effectiveness, instead of by individual doctors. Vivienne Nathanson, head of science and ethics at the British Medical Association, said the approach made sense for patient care.
“It is pleasing to see a large pharmaceutical company like GlaxoSmithKline recognise that it can reduce the possibility of undue influence by rewarding employees for providing high-quality information and education for doctors rather than for their sales figures,” she said.
GSK will continue to pay fees to doctors who are working on company sponsored clinical research projects, advisory activities and market research. The company claims these are essential to provide insights for specific diseases.