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. According to the story in the New York Times, 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. 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.
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.
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.