{"id":55952,"date":"2015-04-14T22:01:55","date_gmt":"2015-04-15T02:01:55","guid":{"rendered":"http:\/\/1boringoldman.com\/?p=55952"},"modified":"2015-04-14T22:18:14","modified_gmt":"2015-04-15T02:18:14","slug":"gsk-churning-presidents","status":"publish","type":"post","link":"https:\/\/1boringoldman.com\/index.php\/2015\/04\/14\/gsk-churning-presidents\/","title":{"rendered":"GSK – churning presidents…"},"content":{"rendered":"
I find this next chapter of GSK USA surrealistic. In January 2011, I read Deirdre Connelly\u2019s<\/font><\/b> speech with amazement. She was the new president of GSK USA, and she was going to shut down the program where Drug Rep’s bonuses were based on the number of prescriptions their territory’s doctors wrote [\u201cso what went wrong?\u201d\u2026<\/a>]… <\/div>\n
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Glaxo Exec Concedes Drug Industry \u2018Lost Its Way\u2019 And Prescribes Changes<\/a><\/div>\n
NPR<\/div>\n
by Scott Hensley<\/div>\n
January 24, 2011<\/div>\n

The same day the feds said they recovered $4 billion related to health care fraud in the government\u2019s last fiscal year, a leading drug company exec acknowledged the industry had gone off course. In a speech Monday to hundreds of people who make their living keeping drugmakers on the straight and narrow, GlaxoSmithKline\u2019s U.S. President Deirdre Connelly<\/font><\/b> noted the huge fines paid in recent years by drugmakers and the low esteem consumers have for the companies these days. Then she asked the obvious question. “So what went wrong?”<\/p>\n

In the speech, whose prepared text we got from the company, Connelly said, “The answer, I believe, is that, in some ways, our industry lost its way.” Nobody I know would argue with that. She faulted a “competitive selling model” that works fine for autos or candy, but just isn\u2019t right for medicines that can save people\u2019s lives\u2026 Her prescription for change included focusing on patients\u2019 needs and operating with greater transparency. One specific change worth noting: Glaxo won\u2019t be paying drug reps bonuses based on increases in prescriptions in their territories anymore. Instead, Connelly said, Glaxo will base the compensation on specific scientific and business knowledge, customer feedback and performance of the business unit they\u2019re part of. You can read the full text of Connelly\u2019s speech here<\/a><\/b>\u2026<\/div>\n<\/blockquote>\n
But alas, she only lasted four years. Progress like that has a way of melting [see A Glaxo Exec Retires Amid Sales Slump and Reps Question a Bonus Program<\/a>] [see also no good deed goes unpunished\u2026 <\/a>]. She was replaced after a sales slump and bad rap from her sales force who wanted to go back to the incentive plan. I said then [February 20, 2015]:<\/div>\n
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I may yet be naive and gullible, but I still think Deirdre Connelly was legit. If that\u2019s true, her retirement<\/i> brings up something fundamental. Can a publicly owned pharmaceutical company survive in a world where a drug isn\u2019t hyped up and sold with aggressive and deceitful marketing? where it\u2019s 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?<\/font><\/b><\/i> Whatever the case, let\u2019s hope that her influence and policies have at least some sticking power.<\/div>\n<\/blockquote>\n
Ask, and you shall receive:<\/div>\n
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Glaxo to Change its Compensation Program for U.S. Sales Reps<\/a><\/div>\n
Pharmalot:WSJ<\/font><\/b><\/div>\n
By Ed Silverman<\/div>\n
April 13, 2015<\/div>\n

One month after assuming responsibility for running GlaxoSmithKline pharmaceutical operations in North America, Jack Bailey is looking at changing a compensation program for sales reps that has generated complaints and frustration inside the drug maker. A task force is \u201cin the process of looking at more comprehensive options to simplify\u201d what Glaxo calls its Patient First program, which was begun four years ago in a bid to overhaul marketing practices aimed at physicians. The review was disclosed to Glaxo employees in an April 1 memo<\/a>, which we have obtained and which was first reported by Bloomberg News.<\/p>\n

As we have noted previously, 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. The hope has been to remove the pressure reps may feel to persuade doctors to write prescriptions, which federal authorities charged sometimes led to inappropriate marketing practices. One year after Glaxo began the program, 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, and signed a corporate integrity agreement that requires Glaxo to monitor its marketing practices.<\/p>\n

Sales reps, however, have complained the program contributed to sales declines, because there was less incentive to promote prescriptions, even though managers sometimes emphasized prescriptions, anyway. Glaxo recently began cutting $1.6 billion in expenses annually through 2017 amid falling sales in its key respiratory franchise and an overall sales drop in the U.S. market. Two months ago, Bailey replaced<\/a> Deirdre Connelly<\/a>, who launched the program in 2011. The drug maker said she retired. For now, the program is being tweaked. To appease its reps, Glaxo will no longer base their compensation on so-called simulations in which actual sales calls are simulated and observed as a way to determine bonuses, according to the memo from Bailey. However, a Glaxo spokeswoman writes us that the drug maker remains \u201cresolutely committed to our commercial model.\u201d<\/font><\/b><\/i><\/p>\n

Glaxo, she writes, \u201chas led the industry by changing the way we reward our sales representatives.  Our approach is based on the core principle that we will not link the compensation of our individual sales representatives with the number of prescriptions generated. Throughout the program we\u2019ve looked for ways to simplify the process but the fundamentals remain the same. This approach has now been rolled out in 150 countries where we operate.\u201d One Glaxo sales rep viewed the move cautiously. \u201cWe remain hopeful about the upcoming changes yet we remain realistic and guarded as well,\u201d says this rep, who asked not to be identified. \u201cWe are under our corporate integrity agreement until 2019 and there isn\u2019t a whole lot the company can do to make major changes to incentivize the reps the way they should be measured on performance.\u201d<\/div>\n<\/blockquote>\n
Here’s Jack Baily [last year]:<\/div>\n