Doctors talking up drugs to other doctors has been quite lucrative for pharmaceutical companies — and the physicians who moonlight as their salesmen.
Drugmakers learned long ago that deputized doctors were effective pitchmen. A doctor paid by a company to give a dinner speech or to chat over lunch with colleagues can go a long way toward changing their prescribing habits.
But now drug giant GlaxoSmithKline says it's going to stop paying doctors to speak about drugs or diseases to people with the power to write prescriptions or influence those who do. Doctors will still be able to earn money from Glaxo through research collaborations and consulting agreements.
The company will also stop paying sales reps based on sales targets. Historically, Glaxo and other companies have tied reps' compensation to changes in the prescriptions written by doctors they call on.
The changes "are designed to bring greater clarity and confidence that whenever we talk to a doctor, nurse or other prescriber, it is patients' interests that always come first," Glaxo CEO Andrew Witty said in a statement.
Glaxo says the new approach will be implemented in all the countries it operates in by early 2016.
Some of the changes, such as the shift in sales rep pay, got rolling in the U.S. a few years ago. In 2011, Deirdre Connelly, Glaxo's U.S. president, talked about decoupling rep pay from prescriptions in a speech that acknowledged that "our industry lost its way."
Why is Glaxo making these changes now? Well, the company has been rocked by allegations of ethical missteps and worse. There's been a bribery investigation in China. And last year, a settlement of alleged health care fraud involving the marketing of some drugs in the U.S. The settlement included a restrictive corporate integrity agreement with the federal government.
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