GlaxoSmithKline scraps doc payments, sales-rep quotas in global marketing revamp

GlaxoSmithKline is tossing out the Big Pharma marketing playbook. No longer will Glaxo pay doctors to promote its drugs or shell out bonuses to sales reps based on their ability to boost prescription numbers.

It's not Glaxo's first move away from the usual drug-marketing tactics. The company ($GSK) overhauled its compensation for U.S. reps beginning in 2010 by scrapping prescription-based incentive pay in favor of other measures, such as evaluations by physicians and overall group performance. And even earlier than that, Glaxo said it would limit payments to individual doctors who hired on to speak about its products.

This time, the changes in rep pay will roll out worldwide, and the limits on certain types of doctor pay ratchet down to zero. No more trips to medical conferences on GSK's dime, either.

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," CEO Andrew Witty said in a statement. "We recognize 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."

Since Witty took over in 2008, Glaxo has broken with the Big Pharma pack in other ways. Most recently, the company promised to open up its clinical data--all of it, with identifying information stripped out--for scrutiny by outside researchers. The company was also among the first to cut prices in the developing world, to open up access to drugs and gain market share at the same time.

Glaxo's critics see Witty's changes as marginal and cynical attempts to burnish the company's image, which has been badly dinged by past marketing violations and patient lawsuits. The company's open-data effort, for instance, has been criticized as too restrictive, with a GSK-appointed board determining which scientists' data requests will be honored.

And GSK's latest announcement follows some big bad news on the marketing side, too. The company inked a record-setting, $3 billion settlement last year with the Department of Justice to wrap up allegations that it promoted a variety of drugs for off-label use. And now, it remains under investigation in China, accused of bribing doctors and hospital officials to use more Glaxo products. 

But Witty gets at least some credit. Of all the Big Pharma CEOs presiding over marketing settlements, Witty has come closest to actually apologizing for his company's misbehavior. In China, the company admitted "breaches" of local law, apologized to government officials, and promised to take punishment in the form of price cuts.

And the company has been cutting back on payments to doctors, even if it's partly because GSK has fewer new drugs to promote: For the first three quarters of 2012, the company's speaking budget dropped to $7.6 million from $52.8 million for the same period in 2010, according to ProPublica.

Most recently, the company's marketing folks have been unusually open about the side effects of its new respiratory drug Breo. In launching the new treatment, GSK reps and speakers have reportedly been hammering not only on its benefits, but its risks.

It's too soon to award any gold stars, however. The changes to sales-rep compensation and doctor payments will be phased in, with the new sales-incentive system fully in place by early 2015. The physician-payment changes will take two years to come into play, and some consulting fees will still change hands. 

Meanwhile, the question is whether Glaxo's changes will inspire its rivals to make similar moves. When GSK announced it would open up its trial data--as long in coming as that openness might prove to be--industry types speculated that other drugmakers would have to follow suit. The details--and time--will tell.

- read the release from Glaxo

Special Reports: Pharma's Top 11 Marketing Settlements - GSK