GlaxoSmithKline Ends Physician Compensation

GlaxoSmithKline is introducing a worldwide marketing plan that will end the practice of compensating physicians who prescribe its medicines by paying them speaker fees or by underwriting their attendance at medical conferences. At the same time, the firm says it will phase out a system of tying sales representative compensation to the number of prescriptions written by doctors they visit.

GSK introduced a version of the sales rep program in the U.S. in 2011 in the wake of a government investigation of how the firm marketed the diabetes drug Avandia.

Under the new plan, representatives will no longer have individual sales targets. Compensation will be based on technical expertise, quality of service, and the company’s business performance. GSK says it hopes to have the program implemented worldwide in early 2015.

The company says it will continue to pay fees to doctors for clinical research, consulting, and market research services.

The changes are being made as GSK faces bribery charges in China, where it is alleged to have made illegal payments to health care professionals to boost sales of GSK products.

The relationship between drug firms and physicians, once characterized by lavish perks provided by sales reps, has changed in recent years with regulatory and industry efforts to eliminate incentives for prescribing drugs.

In 2009, Pharmaceutical Research & Manufacturers of America, a U.S. trade group, issued a voluntary initiative restricting the use of travel, meals, and other sales incentives. Adherents to the code also agreed not to pay for doctors to attend medical conferences.