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Healthcare Business News

Glaxo to stop paying doctors to promote its drugs

By Modern Healthcare
Posted: December 17, 2013 - 8:00 am ET

Drugmaker GlaxoSmithKline said it will end payments to doctors who promote its products in speaking engagements and for attendance at medical conferences and will stop paying its sales force based on sales targets.

In a statement issued Monday, CEO Andrew Witty said the changes are part of a broader initiative at the U.K.-based company to evaluate whether its business practices “are responding to the needs of patients and meeting the wider expectations of society.”

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The company intends to “begin a consultative process towards stopping direct payments to healthcare professionals for speaking engagements and for attendance at medical conferences” by the start of 2016.

In January GlaxoSmithKline plans to roll out a new compensation system for every sales employee worldwide who works directly with doctors and other healthcare professionals who prescribe medications.

GlaxoSmithKline is compelled to change the way it pays its sales force under a corporate integrity agreement entered with HHS' inspector general's office as part of a $3 billion agreement to resolve civil and criminal liability for a range of allegations, including illegal promotion of Paxil and Wellbutrin.

The new compensation framework, the company said this week, rewards sales representatives according to a “blend of qualitative measures and the overall performance of their business, rather than the number of prescriptions generated” and is based on a program launched in the U.S. in 2011.

The moves come amid increasing scrutiny of the role of money in prescribing decisions. Under a provision of the Patient Protection and Affordable Care Act effective in August this year, drugmakers and medical device companies are required to report payments and gifts valued at $10 or more to physicians and medical schools.

GlaxoSmithKline, meanwhile, has come under fire in recent months in China, where police accused its executives of paying bribes to help the company gain a greater foothold in that emerging market.

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