Connelly touts new sales-rep pay plan, argues against prison for pharma offenders
Just a few months ago, GlaxoSmithKline ($GSK) set a record when it settled a host of U.S. marketing allegations for $3 billion. At the time, CEO Andrew Witty came close--and closer than any other pharma executive has--to outright apologizing for the company's bad behavior.
We won't belabor those allegations now (there's plenty on that in our archives). What we will do is pass along the latest on pharma behavior--bad and good--from a GSK executive. At a compliance conference this week, GSK North America President Dierdre Connelly took to the podium to explain what her company has learned about obeying the rules, written and unwritten--and to offer some cautionary words for the rest of the industry.
Lessons learned? For one, the pharma sales model--in which reps earn bonuses based on scrip numbers--led the industry astray, Connelly said. With GSK and its fellow Big Pharma companies in hot water for pumping doctors for off-label prescriptions, and using sales incentives to do so, that's not a big leap. But it gave Connelly a chance to tout Glaxo's move away from that incentive compensation.
Incentive pay for Glaxo reps "no longer bases bonuses on territory prescription volume," Connelly says, but on "behaviors essential to good selling," such as product knowledge and, yes, their ability to ask doctors to prescribe those products. The change has already converted at least one physician, she said. After that $3 billion settlement hit the news, a doctor who didn't take sales calls made a point of coming out to see his Glaxo rep one day--to chew him out. That rep told the doctor about GSK's new bonus system. "Today, that GSK sales professional is the only one that doctor will see," Connelly said.
Connelly also talked up GSK's reporting on financial payments to doctors, among other things. But she didn't stop with promoting her company's image as a change agent.
[Ed; Here we go with the newspeak "Change Agent" crap again.]
She shook her finger a bit at prosecutors and industry critics who contend that drugmakers are a cynical lot, perfectly willing to pay billions in penalties so long as their rule-breaking generates enough profit--and that the only way to stop the madness is to put pharma execs behind bars.
"I reject that argument," Connelly said. "Fines and settlements do matter. They reduce the funds our industry has available for investment into research for new medicines and vaccines to help patients. ... Our settlement also wiped out an amount equal to one full quarter of profits. ... It damaged our reputation and it hurt our morale."
She also sounded as if she's ready to be deputized into the pharma sheriff's department. "If we have leaders in our business who are only motivated to do the right thing by fear of punishment or prison, then we don't have the right leaders," she said. "We are all responsible for making sure that people with the wrong values and motivations find another line of work."
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Thank You FiercePharma and Ms Staton
Ohhh, Kaaay, . . .
GSK Is BACK on the Straight and Narrow.
When were they on it to begin with?
"the only way to stop the madness is to put pharma execs behind bars.
"I reject that argument," Connelly said."
Well We Don't.
pic cred to AHRP.org
Here's one More US Federal Law we can toss on to the pile:
Major Fraud Against The United States
-CITE- 18 USC Sec. 1031 01/03/2012 (112-90) -EXPCITE- TITLE 18 - CRIMES AND CRIMINAL PROCEDURE PART I - CRIMES CHAPTER 47 - FRAUD AND FALSE STATEMENTS -HEAD- Sec. 1031. Major fraud against the United States -STATUTE- (a) Whoever knowingly executes, or attempts to execute, any scheme or artifice with the intent - (1) to defraud the United States; or (2) to obtain money or property by means of false or fraudulent pretenses, representations, or promises, in any grant, contract, subcontract, subsidy, loan, guarantee, insurance, or other form of Federal assistance, including through the Troubled Asset Relief Program, an economic stimulus, recovery or rescue plan provided by the Government, or the Government's purchase of any troubled asset as defined in the Emergency Economic Stabilization Act of 2008, or in any procurement of property or services as a prime contractor with the United States or as a subcontractor or supplier on a contract in which there is a prime contract with the United States, if the value of such grant, contract, subcontract, subsidy, loan, guarantee, insurance, or other form of Federal assistance, or any constituent part thereof, is $1,000,000 or more shall, subject to the applicability of subsection (c) of this section, be fined not more than $1,000,000, or imprisoned not more than 10 years, or both. (b) The fine imposed for an offense under this section may exceed the maximum otherwise provided by law, if such fine does not exceed $5,000,000 and - (1) the gross loss to the Government or the gross gain to a defendant is $500,000 or greater; or (2) the offense involves a conscious or reckless risk of serious personal injury. (c) The maximum fine imposed upon a defendant for a prosecution including a prosecution with multiple counts under this section shall not exceed $10,000,000. (d) Nothing in this section shall preclude a court from imposing any other sentences available under this title, including without limitation a fine up to twice the amount of the gross loss or gross gain involved in the offense pursuant to 18 U.S.C. section 3571(d). (e) In determining the amount of the fine, the court shall consider the factors set forth in 18 U.S.C. sections 3553 and 3572, and the factors set forth in the guidelines and policy statements of the United States Sentencing Commission, including - (1) the need to reflect the seriousness of the offense, including the harm or loss to the victim and the gain to the defendant; (2) whether the defendant previously has been fined for a similar offense; and (3) any other pertinent equitable considerations. (f) A prosecution of an offense under this section may be commenced any time not later than 7 years after the offense is committed, plus any additional time otherwise allowed by law. (g)(1) In special circumstances and in his or her sole discretion, the Attorney General is authorized to make payments from funds appropriated to the Department of Justice to persons who furnish information relating to a possible prosecution under this section. The amount of such payment shall not exceed $250,000. Upon application by the Attorney General, the court may order that the Department shall be reimbursed for a payment from a criminal fine imposed under this section. (2) An individual is not eligible for such a payment if - (A) that individual is an officer or employee of a Government agency who furnishes information or renders service in the performance of official duties; (B) that individual failed to furnish the information to the individual's employer prior to furnishing it to law enforcement authorities, unless the court determines the individual has justifiable reasons for that failure; (C) the furnished information is based upon public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or GAO report, hearing, audit or investigation, or from the news media unless the person is the original source of the information. For the purposes of this subsection, "original source" means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government; or (D) that individual participated in the violation of this section with respect to which such payment would be made. (3) The failure of the Attorney General to authorize a payment shall not be subject to judicial review. (h) Any individual who - (1) is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by an employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of a prosecution under this section (including investigation for, initiation of, testimony for, or assistance in such prosecution), and (2) was not a participant in the unlawful activity that is the subject of said prosecution, may, in a civil action, obtain all relief necessary to make such individual whole. Such relief shall include reinstatement with the same seniority status such individual would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorney's fees. -SOURCE- (Added Pub. L. 100-700, Sec. 2(a), Nov. 19, 1988, 102 Stat. 4631; amended Pub. L. 101-123, Sec. 2(a), Oct. 23, 1989, 103 Stat. 759; Pub. L. 103-322, title XXXIII, Sec. 330002(a), (f), Sept. 13, 1994, 108 Stat. 2140; Pub. L. 111-21, Sec. 2(d), May 20, 2009, 123 Stat. 1618.) -REFTEXT- REFERENCES IN TEXT The Emergency Economic Stabilization Act of 2008, referred to in subsec. (a), is div. A of Pub. L. 110-343, Oct. 3, 2008, 122 Stat. 3765, which is classified principally to chapter 52 (Sec. 5201 et seq.) of Title 12, Banks and Banking. For complete classification of this Act to the Code, see Short Title note set out under section 5201 of Title 12 and Tables. -MISC1- AMENDMENTS 2009 - Subsec. (a). Pub. L. 111-21, in concluding provisions, inserted "any grant, contract, subcontract, subsidy, loan, guarantee, insurance, or other form of Federal assistance, including through the Troubled Asset Relief Program, an economic stimulus, recovery or rescue plan provided by the Government, or the Government's purchase of any troubled asset as defined in the Emergency Economic Stabilization Act of 2008, or in" before "any procurement", substituted "such grant, contract, subcontract, subsidy, loan, guarantee, insurance, or other form of Federal assistance" for "the contract, subcontract", and struck out "for such property or services" before "is $1,000,000". 1994 - Subsec. (g). Pub. L. 103-322, Sec. 330002(f), redesignated second subsec. (g) as (h). Subsec. (g)(2)(A). Pub. L. 103-322, Sec. 330002(a), substituted "a Government" for "a government". Subsec. (h). Pub. L. 103-322, Sec. 330002(f), redesignated second subsec. (g) as (h). 1989 - Subsec. (g). Pub. L. 101-123 added, after subsec. (f), subsec. (g) relating to payments by the Attorney General. EFFECTIVE DATE OF 1989 AMENDMENT Section 2(b) of Pub. L. 101-123 provided that: "The amendment made by this section [amending this section] shall apply to contracts entered into on or after the date of the enactment of this Act [Oct. 23, 1989]."