- GlaxoSmithKline (GSK) will stop paying physicians to promote its products as it tries to pivot from a corruption scandal in China. Instead, the company will hire medical professionals to advocate for GSK products at medical seminars and events.
- While GSK is the first large drugmaker to stop paying speaking fees, it will continue the practice of paying doctors for clinical research.
- In 2014, the biopharma industry paid $6.49 billion to more than 600,000 doctors for services, including speaking and research, according to the Financial Times. GSK paid out $213 million to physicians in 2014.
GSK made headlines in 2012 when it was fined $3 billion by the Department of Justice to settle allegations that it encouraged physicians to prescribe certain drugs through thinly veiled cash payments. These payments would come in the form of various consulting arrangements, dinner events, and entertainment. Around the same time, GSK was fined by China for a large doctor bribery scandal.GSK continues to face scrutiny stemming from both of these incidents.
The decision to stop payments to physicians stems from GSK's renewed efforts to rein in corruption following the US fine and China scandal. Replacing the extensive network of "hired guns" will require GSK to train its internal group of physicians on staff, as well as hiring new employees solely for promotion duties.
Although GSK will continue to pay physicians for research, GSK has become the first large company to end speakers' fees. This could set a precedent for other companies looking to burnish their images at a time when the entire industry has come under fire for pricing practices. However, in stepping away from established practice, GSK may face some short term pain as it gets its new team up to speed.