December 16, 2013
Glaxo Says It Will Stop Paying Doctors to Promote Drugs
By KATIE THOMAS
The British drug maker GlaxoSmithKline will no longer pay doctors to promote its products and will stop tying compensation of sales representatives to the number of prescriptions doctors write, its chief executive said Monday, effectively ending two common industry practices that critics have long assailed as troublesome conflicts of interest.
The announcement appears to be a first for a major drug company — although others may be considering similar moves — and it comes at a particularly sensitive time for Glaxo. It is the subject of a bribery investigation in China, where authorities contend the company funneled illegal payments to doctors and government officials in an effort to lift drug sales.
Andrew Witty, Glaxo’s chief executive, said in a telephone interview Monday that its proposed changes were unrelated to the investigation in China, and were part of a yearslong effort “to try and make sure we stay in step with how the world is changing,” he said. “We keep asking ourselves, are there different ways, more effective ways of operating than perhaps the ways we as an industry have been operating over the last 30, 40 years?”
For decades, pharmaceutical companies have paid doctors to speak on their behalf at conferences and other meetings of medical professionals, on the assumption that the doctors are most likely to value the advice of trusted peers.
But the practice has also been criticized by those who question whether it unduly influences the information doctors give each other and can lead them to prescribe drugs inappropriately to patients. All such payments by pharmaceutical companies are to be made public next year under requirements of the Obama administration’s health care law.
Under the plan, which Glaxo said would be completed worldwide by 2016, the company will no longer pay health care professionals to speak on its behalf about its products or the diseases they treat “to audiences who can prescribe or influence prescribing,” it said in a statement. It will also stop providing financial support directly to doctors to attend medical conferences, a practice that is prohibited in the United States through an industry-imposed ethics code but that still occurs in other countries. In China, the authorities have said Glaxo compensated doctors for travel to conferences and lectures that never took place.
Mr. Witty declined to comment on the investigation because he said it was still underway.
Glaxo will continue to pay doctors consulting fees for market research because Mr. Witty said it was necessary for the company to gain insight from doctors about their products, but he said that activity would be limited in scope. A Glaxo spokesman said that each year the company spends “tens of millions” of dollars globally on the practices that it was ending, but declined to be more specific.
Glaxo is among the largest drug companies in the world, reporting global third-quarter sales of 6.51 billion pounds, or $10.1 billion, a 1 percent rise from the same period a year ago. Sales fell markedly in China as the investigation proceeded.
The move won qualified praise from Dr. Jerry Avorn, a professor at Harvard Medical School who has written critically about the industry’s marketing practices.
“It’s a modest acknowledgment of the fact that learning from a doctor who is paid by a drug company to give a talk about its products isn’t the best way for doctors to learn about those products,” Dr. Avorn said. But he noted that Glaxo would continue to provide what the company described in a statement as “unsolicited, independent educational grants” to continue educating doctors about their products.
He said that in the past the grants had often been provided to for-profit companies that rely on such payments from drug companies, raising questions about whether they were providing truly independent information.
Mr. Witty said while the details were still being worked out, the company intended to provide such grants to respected educational institutions and medical societies. “I’d like to look for those sorts of partners, and I do not envision these partners being companies or pseudocompanies,” he said.
Glaxo is first among its peers to announce a plan to end paid-speaker programs, but it is not the only one considering such a move, said Pratap Khedkar, who oversees the pharmaceutical practice at ZS Associates, a global sales and marketing firm.
He said a handful of drug makers were weighing similar actions for several reasons, including concerns about the reaction to the required disclosure of such payments that will begin next fall under a provision of the health care law. Glaxo and several other major companies already report many such payments, but Mr. Khedkar said the new requirements may go farther than what some companies are reporting, and will be accessible on a searchable government website.
Previously, “It wasn’t really made public in some big, splashy way,” he said.
Jeff Francer, vice president and senior counsel at the Pharmaceutical Research and Manufacturers of America, the industry trade group, said many other companies were looking for ways to better reach increasingly busy doctors — who may not have time to travel to a conference in the first place — and Glaxo’s actions represent just one example.
“Of course all of our companies are looking for ways in which they can refine their relationship with physicians to make sure they’re making the best use of physicians’ time,” he said.
Beginning in 2015, Glaxo will also no longer compensate sales representatives based on the number of prescriptions doctors write, a standard practice that some have said pushed pharmaceutical sales officials to inappropriately promote drugs to doctors. In 2012, Glaxo paid a record $3 billion in fines to resolve charges that it had marketed drugs for unapproved uses. It is one of several major companies to have settled such cases in recent years.
Glaxo said its sales representatives worldwide would instead be paid based on their technical knowledge, the quality of service they provided to clients to improve patient care, and the company’s business performance. The company made such changes in the United States in 2011 — and is required to continue the new program under a corporate integrity agreement with the Justice Department — but will now extend the practices to its global business.
Mr. Khedkar said some other companies were also experimenting with ways to compensate sales representatives, but they must tread carefully.
“You remove the incentive to do anything inappropriate, but you also remove the incentive to do what is appropriate, which is to promote the on-label use of your product,” he said.
Mr. Witty said the experience in the United States had been positive and had improved relationships with doctors and medical institutions.
Dr. Raed Dweik, the new chairman of the innovation management and conflict of interest committee at the Cleveland Clinic, said he hoped other companies would follow suit.
“As a physician, I periodically meet with these sales reps and they usually come in armed with information about me that I don’t even know,” he said, like the number of prescriptions he writes for the drug company’s product. “I feel that’s not really a comfortable interaction to have.”