GlaxoSmithKline’s new no quota compensation plan for drug reps is under review, according to an internal company memo obtained by the press. The Patient First program, which was implemented across 150 countries in the last year, removed sales targets from the bonus payments for sales reps.
The reason for the review, some have speculated, is that its cleaned up marketing approach just isn’t generating the level of sales that the company has in the past. The drug manufacturer has been laying off workers due to declining sales in Advair, the company’s blockbuster drug for the treatment of asthma.
GSK agreed in a 2012 corporate integrity agreement not to provide financial incentives to sales representatives or their direct managers based on the volume of their sales. They initially entered into a 5 year agreement but that agreement was extended for two more years because of a 2014 settlement with the government over allegations of unlawful marketing of Advair, Paxil and Wellbutrin.
The new program compensates representatives based on product knowledge, customer reviews and other factors. Grading of mock sales calls has in part replaced the sales targets that are still used at many drug and medical device companies.
The compensation of sales reps using quotas isn’t the only practice that has been under fire in the drug industry recently. Payments to doctors for clinical trials, speaker programs and other have also been criticized. The government is undertaking several initiatives to increase financial transparency in the health care industry. The Physician Payments Sunshine Act, for example, requires manufacturers participating in federal healthcare programs to report certain payments and items of value to physicians and teaching hospitals. The U.S. Government hopes that the information will allow patients to better evaluate their doctor’s recommendations for bias.