March 7, 2014 | Posted By Bruce White, DO, JD

A New York Times article by Katie Thomas published on December 16, 2013 led with this sentence: “The British drug maker GlaxoSmithKline will no longer pay doctors to promote its products and will stop tying compensation of sales representatives to the number of prescriptions doctors write, its chief executive said Monday, effectively ending two common industry practices that critics have long assailed as troublesome conflicts of interest.” Might one ask: Are these really conflict of interests problems?

A conflict of interest (so sometimes, conflict of interests) is often defined as: “a set of circumstances that creates a risk that professional judgment or actions regarding a primary interest will be unduly influenced by a secondary interest.”  In a short introduction to conflicts of interests, written for a business ethics class at the McCombs School of Business at the University of Texas at Austin, Dr. Lamar Pierce (Associate Professor of Strategy, Olin Business School, Washington University, St. Louis) said:

Incentives are pervasive in every aspect of society. People are rewarded for taking certain actions, and not rewarded for taking others. Workers are paid for their effort and productivity, salespeople are paid for their sales, and small business owners are rewarded with profits for successful ventures. So long as these incentives are well-understood by everyone, they work reasonably well. They motivate effort, performance, and social welfare. But sometimes, individuals have incentives that conflict with their professional responsibilities, often in ways that are not transparent to the public or in their own minds. These conflicts of interest produce serious economic and social problems.

Conflicts of interest are pervasive in markets and in society, and can motivate professionals to act in ways that violate their responsibilities and hurt their client and employers. 

For the sake of argument, permit me to explain why I don’t think Glaxo had a conflict of interest in the two situations noted in the newspaper piece. First, with respect to paying representatives a commission linked to the number of prescriptions that doctors they visited may have written: (1) Are sales representatives “professionals” in the sense implied in the article? They may have specialized knowledge in their work, but it doesn’t take much expertise to learn and their employer provides the unique training. They don’t have a license to practice their art, nor do they take an oath to place patient or client interest above their own. And, they – as a group – do not police or regulate other individuals engaged in the same activity. I don’t think they meet the definition of “professional” as commonly used. (2) It’s standard practice in the business world to incentivize salespersons and workers. As Dr. Pierce said, productivity measures are often tied to effort. Is there any way better to incentivize pharmaceutical representatives than link pay to numbers of prescriptions? Aren’t physicians in private practice compensated on a productivity model linked to the numbers of patients that they see and the procedures that they perform? (3) With prescriptions, doctors make the decisions about which drugs to prescribe. Are doctors then co-conspirators with the pharmaceutical representatives? What incentives are there for physicians to prescribe specific medicines just because a representative detailed them about approved indications and risks? And lastly (4), if everyone knows about the potential conflict of interests, how can it be an unmanageable problem? Really, will paying pharmaceutical representatives – or physicians, for that matter – flat salaries eliminate conflict of interest issues?

Regarding the payments to doctors for speaking at meetings and “promoting” their products: (1) Who better to teach physicians about the uses and benefit-risk ratios than other physicians and pharmacology experts? Isn’t that the reason that medical school faculties employ persons with these credentials to teach medical students and residents? (2) Physicians are taught that good medical decision making is grounded in evidence-based medicine. [] There is evidence to show that physicians are influenced by pharmaceutical representatives, but physicians are also influenced by pharmacy and therapeutics committees within hospitals that control institutional formularies, and by insurance company that manage formularies, and by patients who seek less expensive alternatives to more costly brand-name drugs. The question remains, if the influence undue or unreasonable? Any more influential than a medical school professor’s? (3) Physicians who speak at meetings should be compensated for their time and effort. Most such programs carry continuing medical education (CME) credit for participants. Rather than pharmaceutical companies supplying thought leader experts from their “speakers’ bureaus,” planning committees will be left to find speakers on their own, and fund the costs directly. Maybe it’s less than desirable for drug companies to provide CME speakers, but clearly the costs will go up and these costs shifted from drug companies to participants and those who pay providers. (4) Again, any commercial ties that speakers have are disclosed at the meetings. If the conflict of interest is well known to the audience, it’s being “managed” in the only possible way available to speakers and program planners.

It will be interesting to see if these long-standing practices within the pharmaceutical industry really impact prescription decision making. The reason I doubt it is because even if there are conflicts of interest in these two situations, they appear to have been managed in a reasonably prudent way, which – in the end – is all one can do with conflicts of interest.

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1 comments | Topics: Conflict of Interest , Distributive Justice , Drug Safety


Athene Aberdeen

Athene Aberdeen wrote on 03/10/14 11:48 AM

Conflict of interest situations will always be present especially in a business environment. Perhaps the Pharmacology firm in question has become uncomfortable with a particular prevailing situation that cannot be readily managed.

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