Deirdre Connelly, GlaxoSmithKline’s (NYSE:GSK) top U.S. executive, on Monday offered a gathering of pharmaceutical officials a dose of candor with comments that the pharma industry has “lost its way” in how it markets and promotes its products.
In a morning keynote address to the Annual Pharmaceutical Compliance Congress meeting in Washington, D.C., Connelly acknowledged that pharma companies once took doctors on trips and plied them with pads, pens and other gifts. She added that the industry has relied on a business model of sending multiple sales representatives to a single doctor to make sales.
“This business model may still be O.K. for other industries, but we do not sell chocolate or cars,” she said. “We bring life-altering and life-saving medicines to patients.”
Connelly’s comments at the meeting were noted in a blog post by NPR, which also obtained a copy of her prepared remarks.
GSK, which has its U.S. headquarters in North Carolina’s Research Triangle Park, has taken some lumps as of late. The company last fall pleaded guilty to charges of manufacturing and distributing drugs that were contaminated or otherwise failed to meet Food and Drug Administration quality and purity standards. GSK paid $750 million to resolve civil and criminal charges in the matter, which focused on a now closed Puerto Rico manufacturing plant. More recently, the company disclosed it is setting aside $3.4 billion to pay for legal costs related to Avandia, GSK’s former blockbuster diabetes drug that came under tighter regulatory rules last year due to associations with higher cardiovascular risks.
Connelly said that negative perceptions of pharmaceutical companies persist and the industry must regain the public’s trust. GSK has made public some of ways it will do that. For one, compensation for sales representatives will no longer be based on the volume of prescriptions. Instead, reps will be evaluated on their scientific and business knowledge, feedback from customers in their region and the overall performance of their business unit.
GSK has taken steps to improve transparency and the company now discloses payments to healthcare professionals for speaking and consulting services. Connelly also noted that the company will be more respectful in how it promotes its drugs, citing its erectile dysfunction drug Levitra, which will now have a narrower advertising scope. While the condition is a legitimate one, “it certainly is not a condition parents, aunts, uncles and grandparents want to explain to children while watching a football game on Thanksgiving.”
It’s too soon to tell how these moves will change the perception that doctors, and perhaps more importantly, the public have for GSK. But it’s far from clear that this strategy is a prescription for the pharmaceutical industry. Pharmas are in the business of discovering, developing and commercializing new drugs. Integrity, transparency and respect are all worthy goals. But I just don’t see how they will help any pharmaceutical company develop the next big drug.