no good deed goes unpunished…

Posted on Friday 20 February 2015

    Society holds our interactions with our customers – healthcare providers and payers – to a higher standard. And it should. Society expects our business to be conducted openly and transparently and in a way that does not create even a perception of inappropriate influence.
    Deirdre Connelly speech January 2010
The quote is from a speech given by then newly appointed CEO of GlaxoSmithKline America, Deirdre Connelly, at the CBI 8th Annual Pharmaceutical Industry Compliance Congress in January 2010. It was a year and a half before GSK agreed to their $3 B settlement, "GSK agreed to plead guilty to a three-count criminal information, including two counts of introducing misbranded drugs, Paxil and Wellbutrin, into interstate commerce and one count of failing to report safety data about the drug Avandia to the Food and Drug Administration." And it was long before GSK’s ChinaGate scandal. When I read this speech back then, I was awed [see “so what went wrong?”…]. I guess I thought that either Connelly was the biggest sociopath on the planet, or she was an angel. I suspected the latter, but felt like I might be being the most gullible naive guy on the planet. I even hoped GSK would confess their sins [Study 329 for example]. But that didn’t happen. Deirdre Connelly, however, did happen. But now…
Pharmalot: WSJ
Feb 17, 2015

In the latest shift at GlaxoSmithKline, Deirdre Connelly, who has run the North American pharmaceuticals business for nearly six years, is retiring, according to a memo distributed yesterday to employees. She will be replaced by Jack Bailey, who most recently headed government affairs, managed markets and the vaccines business in the U.S., according to the memo. The move comes amid an ongoing reorganization at Glaxo, which has promised to cut expenses by $1.6 billion annually through 2017. The drug maker is struggling with declining sales in its key respiratory franchise and an overall sales drop in the U.S., which is its most important market and accounts for roughly one-third of companywide revenue.

“The U.S. healthcare environment is extremely challenging. We are making good progress with payers and early signals are encouraging, but there remains a lot to deliver,’ Abbas Hussain, the president of the Glaxo global pharmaceuticals business, wrote in the e-mail to employees. The memo was first reported by Bloomberg News. “With Jack heading the U.S. business, I feel confident that we have the right experience to steer us through the current environment and deliver our strategy. I’d also like to thank Deirdre for her leadership of the U.S. business these last six years – she is a great leader and a good friend. I’m incredibly grateful for everything she has done to reshape the U.S. business.”

The change comes after a management reshuffling last year in which Connelly, who arrived from Eli Lilly, began reporting to Abbas. Previously, she reported directly to Glaxo chief executive Andrew Witty, who has been under pressure to engineer a rebound not only from declining sales, but also a bribery scandal in China. During her tenure, Connelly, 54, attempted to steer Glaxo through a turbulent period. Last year, sales of respiratory medicines fell 18% in the U.S., due to both lower volume and price reductions. This reflected a 25% drop in Advair, one of its most important medicines [see here]. Two newer products have so far not generated anywhere near the needed sales levels. The Abbas e-mail also noted that Jorge Bartolome, a senior vice president for the respiratory  and medical centre unit, is leaving.

Besides the challenges of growing sales, however, Connelly also implemented a new and closely watched marketing program for sales reps called Patient First. Begun in 2011, this was designed in 2011, before the drug maker paid a $3 billion fine to the U.S. government to settle allegations of improper drug marketing to physicians, among other things. The program was seen as ground breaking because reps are not paid bonuses based on the volume of prescriptions written by doctors. Instead, bonuses have been based on product knowledge, business acumen and understanding needs of patients and physicians, which were assessed in written tests and simulations conducted by third parties. Supervisory observations are also used [details are here]… “The company put a lot of faith and effort in this system working and we are putting patients first,” says a Glaxo sales rep who asked not to be named. “But you wouldn’t go to a car salesman, who just sold some cars, and pay him based on his knowledge of the auto industry instead of commission. Salespeople are in it for sales and they’ve been seeing declines because the motivation isn’t there.”…
Some more from that speech in 2010…
    Doctors don’t need us to teach them how to practice medicine. But doctors do benefit from the very specific and extensive knowledge we have about our medicines and the conditions they treat. After all, it’s hard for health care providers to stay current with all the information available about thousands of medicines – and the new ones coming to market. When our GSK sales representatives talk with doctors, we require that they share the extensive knowledge they have about our drugs – including both who should, and importantly, who should not, take our medicines. This is something that my management team and I set as a fundamental requirement. Employees are trained to inform their customers when our products are not right for their patients. That is just one example of delivering value to the physician that is in the best interest of the patient…
    Deirdre Connelly speech January 2010
My guess would be that Glaxo’s slump is not just from Connelly’s policies, but from many other forces as well. Advair now has some healthy competition. And recall that the off-label promotion of Advair was part of that $3 B settlement against GSK. So falling sales are no surprise:
Off-Label Promotion and Kickbacks: The civil settlement resolves claims set forth in a complaint filed by the United States alleging that, in addition to promoting the drugs Paxil and Wellbutrin for unapproved, non-covered uses, GSK also promoted its asthma drug, Advair, for first-line therapy for mild asthma patients even though it was not approved or medically appropriate under these circumstances. GSK also promoted Advair for chronic obstructive pulmonary disease with misleading claims as to the relevant treatment guidelines…
I may yet be naive and gullible, but I still think Deirdre Connelly was legit. If that’s true, her retirement brings up something fundamental. Can a publicly owned pharmaceutical company survive in a world where a drug isn’t hyped up and sold with aggressive and deceitful marketing? where it’s instead allowed to stand on its actual worth based on efficacy and safety? or will the push for profits, and the dreams of becoming a blockbuster drive the show? Whatever the case, let’s hope that her influence and policies have at least some sticking power. And if she applies to the FDA, let’s give her a long hard look…
    February 20, 2015 | 3:29 PM

    If she applies to the FDA? If that is where the money trail leads, then I think you have answered that question.

    I have to say, why is it people minimize the damages done by antisocials who just steal money? As I have written before, there are worse things than death, and sometimes bankrupting and stripping honest people of their possessions, like homes as much as their life savings as a start, can be beyond crippling.

    My father never really recovered from the Savings and Loans scandal here in Maryland in the mid 1980s, part of that his fault I say up front, but, the hole it dug him was so vast, it was incredibly difficult for him to regroup. How many people have been irrevocably harmed by Madoff’s scandal?

    So, this either unintentional or outright naive wish to minimize damages by pathological thieves and money grubbing bastards, well, it can be as bad as gunning down people in a movie theater. After all, the potential logarithmic impact on others who are screwed financially on day one can involve many hundreds to the few first screwed weeks to months later.

    But, as the antisocial in chief reminds us, “if it bleeds, it leads”, and robbing people isn’t a top story if there was frank mayhem and violence that same day, eh?

    February 20, 2015 | 9:26 PM

    It looks like she was put in a double bind situation, then someone decided to throw her under the bus.

    Steve Lucas
    February 22, 2015 | 7:45 AM

    I view the drug industry as slightly behind the automotive industry. The old hard sell model prevailed for many years as detail men became medical professional and car salesmen became associates.

    Today we have car dealers trying to hold onto the old hard sell model and we all see the loud ads while more and more dealers have a one price strategy with a large ecommerce business. A number of years ago a car dealer stated people should not be allowed access to the internet, but instead had to come to his dealership and bargain for a car.

    The drug industry now faces the same challenges. Internet access allows patients and doctors access to a drugs profile, information on the reliability of the company and more and more drug trial information. Ms. Connelly represents the new reality of information access where drug reps have returned to their original role of detail person spouting facts, not selling or being “medical professionals.”

    Today we see automotive companies representing the spectrum of business models from the old hard sell to the newer better product, information based purchasing experience. Drug companies will be making this move as we have seen the reduction in sales force combined with computer driven sales presentations entering the doctor’s office. Increased government regulation and reporting will also drive this change.

    There will always be a need for sales people as doctors need samples will request more information than in the handout, and it is good business practice just to have someone stop by and say hello. The day of the free lunch are numbered just like the car dealer inviting people down for free hot dogs.

    The world has changed. The problem is some do not realize it and find comfort in the old ways of hard sell and deception. Ms. Connelly paid the price of being young and forward thinking in an industry that is stuck in the past.

    Steve Lucas

    February 22, 2015 | 7:50 AM



Sorry, the comment form is closed at this time.