GlaxoSmithKline, a British drug company, announced on Monday that it will no longer pay doctors to promote its products — a controversial practice in the pharmaceutical industry that health reform advocates have been fighting to end for years. Glaxo is the first major drug company to agree to shift its policy in this area, a move that may help pressure its competitors to follow suit.
The company’s decision comes just a year before drug manufacturers will be required to disclose these type of payments under one of the provisions in Obamacare. Beginning next September, data on the financial compensation that physicians receive from Big Pharma companies will become publicly available in a searchable database.
That’s the culmination of at least six years of legislative pressure to get more oversight in this area. “Patients should have the right to know if their physician is getting paid by a certain drug company or has a financial interest in something that they are prescribing,” Sen. Amy Klobuchar (D-MN), one of the co-sponsors of a 2007 disclosure bill that eventually got folded into the health reform law, explained earlier this year.
Indeed, this type of financial relationship between medical professionals and drug companies has become all too common over the past several decades. Pharmaceutical giants often pay doctors to promote their drugs at conferences, sometimes funding doctors’ trips to international events solely so they can speak on behalf of the company. In 2010, the investigative outlet ProPublica launched Dollars for Docs, the first site to offer a comprehensive look at how much some doctors are getting paid to hawk pharmaceutical products. According to a recent Financial Times investigation, major pharmaceutical companies paid U.S. doctors more than $1 billion in 2012.
Under Glaxo’s new policy, which it plans to implement worldwide by 2016, it will no longer pay doctors to attend conferences and speak about its products. “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,” the company’s chief executive, Andrew Witty, said in a statement.
Glaxo has recently been embroiled in several high-profile financial scandals. It’s currently being investigated on bribery charges in China for allegedly illegally paying doctors to try to boost drug sales. And last year, the company reached a record $3 billion fraud settlement with the U.S. government, pleading guilty to charges that it had provided misleading information about several of its drugs. Witty told the New York Times that the new policy is unrelated to the ongoing investigation in China.