Bloomberg |
GlaxoSmithKline Plc (GSK)
plans to hire doctors to educate their peers about its drugs instead of
paying external speakers, a further change to its marketing practices
following a record fraud settlement in the U.S.
The drugmaker is
also investing in improving its multichannel marketing strategy through
media such as online streaming of educational content, Deirdre
Connelly, head of Glaxo’s U.S. pharmaceuticals business, said in an
interview in Philadelphia. The changes come at a time when London-based
Glaxo is introducing products recently approved to treat skin cancer,
HIV and respiratory diseases.
Glaxo has been reforming marketing
practices to improve its reputation. In 2012, the company agreed to pay
$3 billion to settle allegations that it illegally promoted its Paxil
and Wellbutrin anti-depressants and failed to report safety data on the
Avandia diabetes drug. Hiring doctors and medical experts to speak as
in-house representatives of Glaxo will provide more transparency,
Connelly said.
“We’ll continue to disseminate this very
important information on drug benefits and risks, but we’re just not
going to do that by hiring external speakers,” she said. “We want to
ensure that no one even perceives us to be doing anything wrong.”
Customer Evaluations
Glaxo
plans to hire a range of people with medical backgrounds, including
doctors and scientists with expertise in specific disease areas, though
how many is still unclear, according to the company. It will be fewer
than the number of external speakers the company has employed, Connelly
said. In December, Glaxo said that it will stop paying doctors for
giving speeches and attending medical meetings by early 2016.
Connelly started her career as a sales representative at Eli Lilly & Co. (LLY)
and rose to lead that company’s U.S. operations. She joined Glaxo in
2009 and was responsible for devising the company’s new compensation
model that got rid of the link between sales targets and bonuses.
Bonuses are now based on selling competency, customer evaluations and
overall performance of the representative’s business unit.
Dubbed
“Patient First,” that measure was implemented in the U.S. in 2011. A
similar program will be extended to all markets by 2015, Glaxo said in
December. The announcement also came amid an ongoing bribery
investigation of Glaxo in China.
Hiring internal speakers isn’t a widespread practice in the industry and has pros and cons, said Pratap Khedkar, who runs consulting company ZS Associates’ global pharmaceuticals practice in Philadelphia.
Credibility Question
Because
they will be employees of Glaxo, the company won’t have to report
payments to doctors under the so-called Sunshine Act in the U.S. that
requires such disclosures. On the other hand, their credibility may be
questioned, and they won’t be able to answer questions such as how they
would treat a patient with specific symptoms or problems, given that
they aren’t practicing physicians, Khedkar said.
The Glaxo
representatives may be perceived in the same way as so-called medical
science liaisons, who typically have pharmacy or nursing degrees and
play an educational role in speaking to doctors, such as explaining
clinical trial results, Khedkar said.
Opinion Leaders
The
corporate ties and a lack of reputation among practicing colleagues may
hamper the Glaxo representatives’ sway with physicians, said Erik Gordon, professor at the University of Michigan’s School of Law and Ross School of Business.
“Doctors
aren’t influenced by just any other doctor,” Gordon said by e-mail.
“They are influenced by doctors who are sufficiently well known,
respected, and seen as key opinion leaders -- real experts with lots of
experience with patients.”
The shift in strategy comes as Glaxo
introduces several key new products, including Breo and Anoro for
respiratory disease. Breo’s uptake in the U.S. has trailed that of Merck
& Co.’s Dulera, which is in the same class of drugs, and were
little changed in the week ended March 7, Bloomberg Industries analyst
Sam Fazeli said today, citing data from Symphony Health Solutions.
“The
real test will be how Anoro gets on,” Fazeli said. Anoro, which will be
introduced in the U.S. by the end of April, has higher sales potential
than Breo, potentially reaching $1.55 billion in 2017, according to the
average of five analyst estimates compiled by Bloomberg.
Instant Replies
Connelly said the experts at Glaxo will be expected to use a growing range of digital tools designed to help market products.
In addition to targeted e-mails and Web seminars, drugmakers
are increasingly using mobile platforms including instant replies to
questions sent by text message that doctors can use while seeing
patients, ZS Associates’ Khedkar said.
Companies are investing
to add more multichannel tools as doctors are increasingly pushing back
on visits by sales representatives, he said. Still, that spending totals
about $1 billion industrywide, compared with about $10 billion for
sales-force channels, Khedkar said. The industry’s expenditure on
sales-force channels has halved since 2006, he said.
Glaxo has
reduced its sales force by more than 30 percent since 2009, while adding
new educational roles and jobs targeting pharmacies, among others,
Connelly said.
“In addition to how we operate, in terms of
values and Patient First, we have a different business model today from
what we had before,” she said. Those changes have helped shield Glaxo’s
U.S. sales from the investigation in China, she said. The company’s U.S. pharmaceutical and vaccine sales rose 5 percent in the fourth quarter, compared with a 29 percent drop in China.
“We had done a lot before that happened,” she said. “We were fortunate that we were ready for an event like that.”