One of the world’s largest drug makers is going cold turkey and cutting off payments to physicians for hawking their drugs.
GlaxoSmithKline (GSK), Britain’s biggest pharmaceutical company announced on December 17, 2013, that it will stop paying physicians for promoting its drugs and scrap prescription targets for its marketing staff. The entire industry has been under heavy scrutiny and pressure to clean up questionable marketing practices. Regulators have been particularly heavy handed in China where industry executives have been threatened with jail time after being accused of bribing physicians with up to $494 million payments through travel agencies to boost its drug sales.
The company said the action was not directly related to its Chinese problems and were rather part of a broad effort to improve transparency. No other company has yet followed suit.
Disruption Now or Later
Giving up payments to physicians and ditching marketing targets is a kind of unilateral disarmament that the company must think will lessen future business disruption from government officials. Zimmer Holdings Inc.’s CEO Dave Dvorak went further than competitors in cancelling and restructuring surgeon contracts with the company after then U.S. Attorney Christopher Christie’s purge of 2008. At the time, Dvorak argued the disruption of surgeon-industry relationships will come sooner or later and he’d rather get it over with right away.
“Where GSK leads we must hope that other companies will follow, ” Fiona Godlee, editor of the British Medical Journal and an influential campaigner against undue industry influence in medical practice, told Reuters.
“But there is a long way to go if we are to truly extricate medicine from commercial influence. Doctors and their societies have been too ready to compromise themselves.”
$3 Billion U.S. Settlement
In the U.S., the industry’s biggest market by far, many companies have run into conflicts over improper sales tactics and GSK reached a record $3 billion settlement with the Justice Department last year over charges that it provided misleading information on certain drugs. A number of other firms have taken some steps to clean up their marketing practices and companies are being forced to disclose payments to doctors under U.S. healthcare law.
The decision to stop payments to doctors for speaking about medicines during meetings with other prescribers is a big change for an industry that has always relied heavily on experts to influence their peers.
GSK will still pay fees to doctors carrying out company-sponsored clinical research, advisory activities and market research, which it said were essential in providing insights on specific diseases.
Pro/Con
PBS interviewed Harvard University’s Dr. Jerry Avorn and Dr. Thomas Stossel about the business and ethical issues surrounding GSK’s decision and whether doctors should be paid by pharmaceutical companies to promote their drugs.
They had different opinions about GSK’s decision. “I do think they’re setting a good example, ” Dr. Avorn said. “I wonder whether some of the other companies are going to hang back and see what is this doing to their sales, because you can probably sell more drugs when you can totally control the flow of information than if you just pay a hospital or a medical school to do whatever kind of education it wants.”
Dr. Stossel said that a one-size fits all approach is not the best for healthcare education. He worried that if companies, which don’t have “the Glaxo profile, ” restricted the cutting-edge information given to doctors, the real victim would be patients.
Andrew Witty, GSK’s CEO said in a statement that his company’s actions were designed to ensure that patients’ interests always came first.
“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, ” he said.
