GlaxoSmithKline's New Sales Practices

| About: GlaxoSmithKline (GSK)

GlaxoSmithKline (NYSE:GSK) has announced that they're going to change the way their sales and marketing organization does business, and how they compensate people in it. They're removing all individual numerical targets for their sales reps worldwide, for one thing, following up on changes they made to the system in the U.S. a couple of years ago. I don't know how that's worked out here, in the real world, so I can't comment much on that one.

A big change, though, is that the company has announced that it:

... will move to end the practice of paying healthcare professionals to speak on its behalf, about its products or disease areas, to audiences who can prescribe or influence prescribing.

GSK will also stop providing financial support directly to individual healthcare professionals to attend medical conferences and instead will fund education for healthcare professionals through unsolicited, independent educational grant routes.

I think that this is a necessary part of getting the industry's image back, to the extent that this can be done. Here's a possibly useful rule of thumb: If the headline about you stopping something looks embarrassing all by itself ("GlaxoSmithKline to Stop Paying Doctors for Endorsements"), you probably shouldn't have been doing it in the first place.

The company says that they will continue to pay people for work on clinical trials and the like (and I don't see how anyone could do otherwise), but the speak-up-for-us-you-key-opinion-leaders stuff will not be missed. Or shouldn't be. But there's another part of the press release I found interesting:

The company has committed to disclose the payments it makes to healthcare professionals and already does so in several countries including the U.S., Australia, U.K., Japan and France in line with locally agreed government or industry association standards. GSK will continue to disclose the payments it makes for clinical research advisory activities and market research in these countries and will also continue to work towards transparency in other countries as industry associations or governments establish specific guidelines for disclosure.

Now, there's a country that's missing from that list, one where payments are not required to be disclosed and "locally agreed" standards might be a bit harder to get a handle on. Where could it be?

Disclosure: None.