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Big Pharma Busted: Glaxo under Fire for Corrupt Compensation Policies

2 JAN 2014

This week, the AAPS blog looks at a new call to reform Big Pharma marketing practices. In July, Chinese officials accused industry giant, GlaxoSmithKline of fraud, citing bribery and high-level corruption amongst the charges.  For years, the industry has come under fire for suspect compensation models, eliciting criticism for how sales reps reward doctors for prescribing select drugs. The blog post, Glaxo under Fire for Corrupt Compensation Policies reveals that the company’s chief executive officer, Andrew Witty

admits that some senior executives circumvented corporate guidelines in order to defraud the company and the Chinese health care system. Glaxo has also admitted to marketing infractions in the US, where officials breached pharmaceutical quality control guidelines by failing to report safety information and improperly promoting medicines.  Witty promises reform, saying “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.” 

But can Witty really assure stakeholders and the public at large that pay-outs and short-cuts won’t continue to be a problem? Glaxo says they have recently implemented a new approach to compensating sales reps and will soon stop direct payments to doctors. But, problems of transparency are most apparent in emerging markets, like China. Overseeing and controlling the practices of overseas reps and personnel will surely prove challenging as Big Pharma continues to extend its reach around the globe.