Drug giant GlaxoSmithKline, which is mired in a bribery scandal in China, says it is ending payments to doctors for promoting their products. The company also is changing its sales force compensation plan to reflect one implemented for its U.S. sales people in 2011.

GSK (NYSE: GSK), which operates its North American headquarters in RTP, announced the changes Tuesday morning in London.

By stopping the paying doctors to promote its medicines, GSK is challenging a controversial industry practice. GSK said it will no longer pay health-care professionals to speak on its behalf to audiences that can prescribe medicines and will stop providing financial support to professionals to attend medical conferences.

The changes will be completed by 2016, Glaxo said.

“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,” said GSK Chief Executive Officer Andrew Witty in announcing the changes.

“Over the past five years, this has seen us take significant steps to increase access to medicines in developing countries and to be more transparent with our clinical trial data. We’ve also made changes to how we work with healthcare professionals. Building on this, today we are outlining a further set of measures to modernise our relationship with healthcare professionals. These are designed to bring greater clarity and confidence that whenever we talk to a doctor, nurse or other prescriber, it is patients’ interests that always come first. We recognize that we have an important role to play in providing doctors with information about our medicines, but this must be done clearly, transparently and without any perception of conflict of interest.”

Since Witty became CEO in 2008, Britain’s biggest drugmaker has overhauled compensation for U.S. sales representatives. It’s issued reports detailing speaking and consulting fees it pays doctors and made efforts to disclose more information from clinical trials.

Glaxo also paid $3 billion last year to resolve U.S. allegations that the company improperly promoted medicines and failed to report safety information, exceeding a 2009 settlement by rival Pfizer.

China began an anti-corruption investigation of Glaxo in July. Chinese authorities allege that the drugmaker bribed hospitals, doctors and officials. The company has said it’s cooperating with the probe.

The overhaul in marketing practices comes in response to China’s anti-corruption investigation of Glaxo, which began in July. Authorities there allege that the drugmaker bribed hospitals, doctors and officials. The probe was largely responsible for Glaxo’s sales of pharmaceuticals and vaccines in China plunging 61 percent in the three months through September.

Some senior executives appear to have acted outside Glaxo’s processes and controls to both defraud the company and the Chinese health-care system, Witty said on July 24. Glaxo’s troubles in China came after the company paid a record $3 billion last year to resolve U.S. allegations that it improperly promoted medicines and failed to report safety information.

New Sales Compensation

GSK also will begin changing how it compensates sales people, embracing company wide procedures put in place in the U.S. two years ago.

To help repair its reputation, Glaxo revised its incentive compensation program for U.S. sales representatives. The company in 2011 said it did away with the link between sales goals and bonuses. Bonuses are now based on selling competency, customer evaluations and overall performance of the representative’s business unit, according to Glaxo.

“The ‘Patient First’ program bases compensation for sales professionals who work directly with prescribing healthcare professionals on a blend of qualitative measures and the overall performance of their business, rather than the number of prescriptions generated,” GSK said in the announcement. “Experiences in the last two years suggest that this more patient-focused approach has significantly improved both customer interactions and satisfaction rates with GSK’s US pharmaceutical business.”

Full details of the changes can be read online.

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