GlaxoSmithKline (GSK) has been known to have some of the strictest pay rules in the pharmaceutical industry, due at least in part to its efforts to improve ethics and transparency at the company. Recently, however, the company announced that it was going to start to loosen up some of those rules.
The first piece of loosening the rules will allow specialty salespeople to higher paychecks by allowing the 25% variable percentage of specialty sales reps’ pay to increase based on prescription sales generated instead of the current combination of group sales, scientific knowledge, and healthcare provider satisfaction. The other 75% of representative pay is fixed and the 25% variable pay will remain capped for all GSK sales force members, though the maximum variable pay will be increased for individual sales representatives working on Specialty Care.
This change impacts sales representatives in the oncology department, GSK’s HIV unit ViiV Healthcare, and those who focus on Benlysta (a lupus drug) and Nucala (drug for severe asthma). GSK notes that these divisions are in the best position for this change because of the level of complexity around treatments, healthcare systems, and sub-populations of patients in specialty care, as well as the volume and pace of scientific news.
Sales representatives from the primary care and vaccine divisions variable 25% of pay will stay related to sales team goals but will be based on the performance of smaller groups of representatives.
GSK notes that the change is necessary to keep competitive with other drug makers that compensate based on sales and helps to ensure that “GSK is more closely aligned to other pharmaceutical company incentive schemes” while helping it overall remain “more conservative in pharma primary care and vaccines.”
Along with the changes, GSK will implement a comprehensive training, control and monitoring framework to ensure the new policy is fully aligned with GSK’s values-based approach to HCP engagement and is in full compliance with laws and policies. All participants will be required to complete new ethics and values-led behavior training, with twice-yearly certification. Additional controls will include active monitoring of sales data and spot checks to detect signs of potential abuse, and an internal audit of how the new program is being rolled-out.
The changes will start in July for representatives in the United States, the United Kingdom, and Canada, but have the potential to become global after January 2020. It is possible that eventually, one-fifth of the company’s global sales force will be paid, at least partly, based on individual sales-based measures.
GSK notes that this change does not mean the ethics of the company have become looser, as the new policy includes a “zero-tolerance approach for any employee that acts against GSK’s values or infringes the policy, with a focus on off-label promotion and/or inappropriate transfer of value” and the new variable pay is only available to reps who meet “specific training and behavior-related thresholds for ethical conduct.”