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."
Special Report: Pharma's Top 11 Marketing Settlements
Related Articles:
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GSK launches next revamp of sales-rep pay
GSK, Pfizer pay U.S. doctors $262M
GSK tosses sales targets for U.S. reps
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
http://uscode.house.gov/download/pls/18C47.txt
-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]."
And by the way, That's a Felony, so it's Good-Bye to Medicare for 5 years, and Good Riddance to GSK.
There is No Such Thing as a Company that's Too Big To Fail, or Above the Law.
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