Will GSK's no-speaker-fee system work? Execs say yes; critics, not so much

GlaxoSmithKline ($GSK) has taken some bold steps to polish its image, tarnished by a Chinese bribery scandal and $3 billion settlement with the U.S. government. But naysayers blame its first big moves--nixing sales-rep quotas and pegging bonuses to "softer" measures instead--for disappointing roll-outs for several new meds.

Now that it's dropping the time-tested tactic of paying doctors to promote its meds, critics are piling on there, too. But the U.K.-based drugmaker is sticking to its guns, recruiting its own doctors and other experts to tout its meds.

As the Financial Times reports, GSK execs promise that the new policy won't backfire on its drug sales. In fact, the company says its pharma rivals will eventually follow suit.

GSK figures that public opinion is running its way. Some high-profile scandals put a spotlight on the practice a few years ago, and now, pharma companies are reporting enormous numbers of U.S. doctor payments in a public database--$6.5 billion worth in 2014, including research grants, according to ProPublica, which regularly crunches those numbers. Follow-up dives into the database have linked big prescribers with big payments, and media coverage has pushed doctor dollars into the public eye like never before.

GSK CMO Murray Stewart

Society now sees pharma-paid doctors as "hired guns," Glaxo CMO Murray Stewart told the FT. The only way to avoid that rap is for drugmakers to use their own employees instead, he said.

It's a major shift for GSK, which shelled out $15 million in speaking payments to doctors in 2014, little less than it did in 2013. In addition to seminars headlined by internal doctors, the company will be using an increasing number of webcasts to communicate with providers. The company told the FT that about 400,000 medical professionals participated in GSK-hosted webinars last year.

Since GSK first announced its no-payment policy--which went into effect Jan. 1--other Big Pharmas have addressed the question. Will they do the same? Several companies are on record with an unequivocal "No," saying that their doctor-speakers are important to their promotional efforts.

Forbes' John LaMattina, a former R&D chief at Pfizer ($PFE), backs them up; to his mind, respected doctors in the field offer endorsements far more powerful than company staffers--even doctors and medical experts--could provide. Doctors could well assume that a GSK physician has more of a vested interest in a med than would a doctor simply paid to speak about it. Plus, the Open Payments Database makes physician speaking fees transparent, which should give the public peace of mind, he says. "Hopefully the rest of the biopharmaceutical industry will not follow GSK's lead on this topic," LaMattina concludes.

Time will tell whether GSK's new policy will boost its credibility without cutting into revenue. More time will tell whether a buffed-up image would translate into bigger sales. Whether GSK has started an industry trend against pharma-paid physician speakers? The company's head of respiratory meds, Neil Barnes, delivered a parting shot in the FT: "It is going to be like smoking on aeroplanes. People will look back and say 'did we really used to do that?'"

- get the FT article
- see the Forbes column

Special Report: Top 10 drug brands by payments to doctors