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Glaxo to halt sale payoff

- UK giant says it won’t pay doctors to promote drugs

Dec. 17: A leading multinational drug maker has announced that it intends to stop playing Santa to doctors.

GlaxoSmithKline will no longer pay doctors to promote its products and will stop tying compensation of sales representatives to the number of prescriptions doctors write, its chief executive said yesterday, effectively ending two common industry practices that critics have long assailed as troublesome conflicts of interest.

The announcement appears to be a first for a major drug company — although others may be considering similar moves — and it comes at a particularly sensitive time for Glaxo. It is the subject of a bribery investigation in China, where authorities contend the company funnelled illegal payments to doctors and government officials in an effort to lift drug sales.

Andrew Witty, Glaxo’s chief executive, said in a telephone interview that its proposed changes were unrelated to the investigation in China, and were part of a year long effort “to try and make sure we stay in step with how the world is changing,” he said.

For decades, pharmaceutical companies have paid doctors to speak on their behalf at conferences and other meetings of medical professionals, on the assumption that the doctors are most likely to value the advice of trusted peers.

But the practice has also been criticised by those who question whether it unduly influences the information doctors give each other and can lead them to prescribe drugs inappropriately to patients.

All such payments by pharmaceutical companies are to be made public next year under the Obama administration’s health care law.

In India too, efforts by drug companies to influence prescriptions written by doctors to patients have long evoked concerns among sections of medical professionals. A study in 2007 had revealed that drug companies had used a range of “gifts” — from cellphones to automobiles to travel and stay arrangements to attend domestic and international medical conferences — to remind doctors about specific brands of medicines.

The Medical Council of India had in December 2009 notified a code of ethics that prohibited doctors from accepting gifts, travel assistance or hospitality for any purpose. Last year, the Central Board of Direct Taxes said drug companies may need to disclose the names of doctors who have accepted gifts, and doctors would need to declare their equivalent value as taxable income.

Health activists campaigning for lower prices of drugs have argued that unethical marketing practices may influence doctors to prescribe inappropriate medications and contribute to high prices.

“In many medicines, the costliest of brands have the maximum market shares,” said Gopal Dabade, a physician in Dharwad, Karnataka, and a member of the All India Drug Action Network, a non-government agency campaigning for lower drug prices and rational prescriptions.

Under the plan announced by Glaxo which it said would be completed worldwide by 2016, the company will no longer pay health care professionals to speak on its behalf about its products or the diseases they treat “to audiences who can prescribe or influence prescribing.”

The company will also stop providing financial support directly to doctors to attend medical conferences, a practice that is prohibited in the US through an industry-imposed ethics code but that still occurs in other countries. In China, the authorities have said Glaxo compensated doctors for travel to conferences and lectures that never took place.

Glaxo is among the largest drug companies in the world, reporting global third-quarter sales of $10.1 billion (over Rs 62,600cr). Sales fell markedly in China as the investigation proceeded.

A GSK spokesperson in India said the proposed changes are designed to “bring greater clarity and confidence that whenever we talk to a doctor, nurse, or other prescriber, it is patients’ interests that always come first”.