Glaxo to End Some Payments to Doctors

In a surprising announcement, pharmaceutical giant GlaxoSmithKline revealed they will soon put an end to a common industry practice of paying doctors and other health professionals to promote their drugs. The company said it will stop paying doctors to endorse its products at speaking engagements and no longer base the pay of sales representatives on how many prescriptions are written.

A fistfull of twentiesWhile some may applaud their efforts, it does appear somewhat suspect in light of the recent bribery charges levied by the Chinese government claiming Glaxo bribed doctors and government officials in order to boost sales. The move also comes just prior to the implementation of legislation, which requires such payments to be made available to the public under the Physician Payment Sunshine Act (Section 6002 of the Patient Protection and Affordable Care Act.)

Also known as Open Payments, the Act was created to provide greater transparency around the financial relationships of manufacturers, physicians, and teaching hospitals. It requires the following information to be submitted annually to the Centers for Medicare and Medicaid Services (CMS):

  • Payments or other transfers of value by manufacturers of covered drugs, devices, biologicals, and medical supplies to physicians and teaching hospitals
  • Certain ownership or investment interests held by physicians or their immediate family members
  • Payments or other transfers of value made to physician owners or investors by certain group purchasing organizations
  • The Centers for Medicare and Medicaid will collect data, aggregate it, and publish it on a public website.

For patients, Glaxo’s decision is a step in the right direction, but conflicts of interest remain. The New York Times reports that Glaxo will “continue to provide what the company described in a statement as ‘unsolicited, independent educational grants’ to continue educating doctors about their products.” Doctors will also continue to receive consulting fees from Glaxo for market research.

So, is this move part of a new, socially responsible corporate culture for Glaxo, or just an effort to stop the bleeding? It’s hard to tell. Bloomberg Newsweek reporter Diane Brady seems to share our skepticism:

It’s hard to look like an innovator when your company has paid a $3 billion fine in the U.S. and is accused of paying another half-billion dollars in bribes to China.

In a perfect world, doctors would prescribe medications to their patients based on unbiased, independent research weighing the risks and benefits for each individual. Hospitals and medical professionals would not receive kick-backs or be subjected high-pressure sales pitches promoting off-label use by pharmaceutical representatives and Big Pharma would not inundate the public with direct-to-consumer advertisements.

Sadly, we don’t live in that world (at least not yet) and sometimes baby steps are better than no steps at all.

 

Sources:

Glaxo Says It Will Stop Paying Doctors to Promote Drugs” by Katie Thomas, The New York Times, December 16, 2013.

Is GlaxoSmithKline Playing Defense—or the Opposite?” by Diane Brady, Bloomberg Businessweek, December 18, 2013.

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