Big Pharma Busted: Glaxo under Fire for Corrupt Compensation Policies

When our doctor prescribes a medicine, we assume the choice comes as a result of years of training and professional practice. We trust that the chosen drug is best suited to cure what ails us. However, pharma giant GlaxoSmithKline has recently found itself accused of interfering with that trust by offering doctors unethical compensation packages for promoting specific drugs. Rather than evaluating pertinent clinical research and considering both risks and benefits, doctors involved in the scheme are tempted by large bonuses to favor some therapies over others.  Transparency with regard to drug promotion has long plagued the industry, but it was China’s outcry against Glaxo in July that sparked a renewed call for reform.

Corrupt Practices

Over the summer, Chinese officials blew the whistle on Glaxo for bribing physicians to prescribe certain medications, give speeches, and attend medical meetings.  Chief executive officer, Andrew Witty admits that some senior executives circumvented corporate guidelines in order to defraud the company and the Chinese health care system. Glaxo has also admitted to marketing infractions in the US, where officials breached pharmaceutical quality control guidelines by failing to report safety information and improperly promoting medicines. Witty promises reform, saying “it is imperative that we continue to actively challenge our business model at every level to ensure we are responding to the needs of patients and meeting the wider expectations of society.”

Plans for Reform 

Glaxo promises to phase out direct payments to physicians by 2016. It also plans to initiate a new compensation package for sales reps who deal directly with doctors and health care institutions.  In the US, the company has already eliminated its old criteria for sales bonuses. Now, monetary rewards are based solely on selling competency, customer evaluations and overall performance.  Glaxo’s newly developed marketing strategy, called “Patients First” focuses on educating doctors and pharmacists about new products, rather than promising big compensation for pushing specific prescriptions.

Wake-up Call for Competing Companies

In 2012, pharma giants Pfizer and Eli Lilly paid a combined $74 million in fines for bribing officials in various countries, including China. Stakeholders and whistleblowers are hopeful that the Glaxo move to overhaul its marketing practices will prompt other industry heavyweights to follow suit.  AstraZenca claims it has done away with payments to doctors for attending medical conferences, and continues to tighten practices that reward physicians for recommending certain drugs over others. Students currently enrolled in pharmaceutical courses will graduate into a marketplace more focused than ever on the ethics of drug promotion. Consumers and health officials will be watching closely to determine how Big Pharma will balance a desire for profit with its responsibilities to patients.

Do you believe doctors should receive any type of compensation for endorsing a drug or attending a medical conference?