CASELET- MARKETING MANAGEMENT-I
Impact of external environment: GlaxoSmithKline unveils a new code for ethical
marketing
Faced with charges of unethical marketing practices which have long tarnished its image and
reputation, the pharmaceutical industry is trying to clean up its act. Once a market leader, the Rs
2,800-crore company GlaxoSmithKline has now trailed behind industry peers, recording a poor
3% sales growth in the year ended March 2016. Given the new environment in India, it is re-
engineering the business model in a way that is able to maintain margins but at the same time
deliver value of relevance to stakeholders - physicians, hospitals and the government. In one of
the first such attempts, GlaxoSmithKline has rolled out a new healthcare marketing code
covering doctors and its field staff. Under the policy, the company has withdrawn target-linked
incentives for its 3,000-strong sales force, and stopped direct payments to doctors for speaking
engagements. The policy, for an industry which faces charges of unethical marketing practices
and poor public perception, was adopted by the company globally last year.
In India, the company initiated the 'Patient Focused Selling' program, involving withdrawal of
sales incentives, as a pilot project last year, while the model is being rolled out this year. The
marketing code for healthcare professionals (HCPs) is also being introduced this year, with the
company strengthening its medical capability by hiring over 25 doctors across specialties, which
will engage with their external peers and answer queries regarding the company's drugs at
medical seminars. Payments are made to physicians by pharma companies for speaking
engagements to promote their products - this job will now be done by its in-house team of
doctors at GSK. These steps will introduce more transparency into its marketing and educational
efforts, help physicians to make informed choices, and clear the mistrust which patients have.
Under the 'Patient Focused Selling' programme, the company will evaluate its sales force on
scientific knowledge, technical skills and customer evaluations, rather than meeting sales targets.
The company is investing in a new-age business model and will leverage digital capability to
improve delivery of information to HCPs and doctors. Under the 'Veeva' platform, information
will be shared with sales staff in a more systematic and consistent manner.
GSK is coming out from supply constraints, and is on a recovery path with 12-13% growth
recorded in the last two quarters. GSK is also test-marketing with a software company in a rural
setting to improve access of healthcare in remote areas. The company has also implemented
pricing strategies for certain life-saving medicines and vaccines in order to ensure broader
access. For example, due to the fact that pneumonia is the greatest cause of infant mortality in
India, the company lowered the price of Synflorix vaccine by 40% in order to ensure more
children are able to benefit from it.
DR. M JHA Page 1
Q1. What is the new healthcare marketing code adopted by GSK?
Q 2. What are the steps taken by GSK to introduce transparency into its marketing and
educational efforts?
Q 3. What is 'Patient Focused Selling' program?
DR. M JHA Page 2
