GlaxoSmithKline said Tuesday that it would stop paying doctors to give speeches and attend continuing medical education events, while also eliminating individual targets in determining pay for sales representatives.
The drugmaker - based in London but with facilities at Philadelphia's Navy Yard and elsewhere in the region - is ahead of most of its competitors in those matters. GSK and the pharmaceutical industry have been under pressure in myriad ways to change business practices their critics see as unethical.
Pharmaceutical companies most often make their biggest profits when doctors write prescriptions for their patent-protected medicines. Some doctors have been paid for speaking about a drug; rarely is the message negative. Sales reps typically work on commission, so they have a financial interest in doctors' writing more prescriptions.
Both situations - sometimes in combination - have led to abuse without necessarily benefiting patients and, in some cases, with unnecessarily raising the cost of health care.
"This is good news, as it signals the beginning of the end of doctors' involvement in the marketing of drugs," Fiona Godlee, editor of the British Medical Journal, said in a statement. "Where GSK leads, we must hope that other companies will follow. But there is a long way to go if we are to truly extricate medicine from commercial influence. Doctors and their societies have been too ready to compromise themselves. They must take full responsibility for their own professionalism and independence."
A decadelong U.S. investigation eventually resulted in three criminal charges against GSK and $3 billion in penalties in 2012. The company changed leaders in 2007, with Andrew Witty becoming CEO.
More recently, GSK (and to some extent other drugmakers) has been under investigation by the Chinese government, which is just starting to regulate its health-care industry.
In this country, the Affordable Care Act included the Physician Payment Sunshine Act, effective since Aug. 1, which required drug and device companies to record and report for eventual publication their payments to health-care providers.
In 2011, Witty changed GSK's U.S. sales-compensation system, and that is the model for the worldwide change by 2015. Sales reps will be evaluated and rewarded for "their technical knowledge, the quality of the service they deliver to support improved patient care, and the overall performance of GSK's business," according to a company statement.
"We believe that it is imperative that we continue to actively challenge our business model at every level to ensure we are responding to the needs of patients and meeting the wider expectations of society," Witty said in the statement.