(Reuters) - British drugmaker GlaxoSmithKline said on Thursday it will reintroduce incentive payments for sales representatives in some countries to retain talent after stopping them for years in the wake of scandals over illegal sales practices.
Loosening the reins on bonuses will “uphold our ethical and values-led approach to (healthcare professional) engagement, in full compliance with laws and policies, whilst supporting delivery of strong performance,” GSK said in a statement on its website.
The company added the partial reversal reflected the shift in GSK’s portfolio towards speciality care products such as oncology, and the new pay scheme would be focused on those therapeutic areas while remaining more conservative in primary care and vaccines.
The changes initially affect staff in the United States, Britain and Canada from July 2019.
In 2012, the British group scrapped performance-based payments in the U.S. to avoid a repeat of aggressive sales practices.
Earlier that year it agreed to pay $3 billion in civil and criminal fines for promoting its antidepressants for unapproved uses and for failing to report safety data on its Avandia diabetes drug.
From 2014, it ended sales-based payments for sales reps in other parts of the world after an elaborate scheme to bribe doctors and hospitals in China was uncovered at the company. GSK was fined close to $500 million by China at the time and its former country head for China was handed a suspended jail sentence.
GSK said it now wanted to avoid losing out to competitors in the market for sales reps.
“During this time, we have remained the only company to have made a broad shift in how we incentivise and compensate our sales force; our peers continue to use individual sales targets.”
If successful the new bonus scheme may be applied in other European and major developed markets from January 2020, it added.
Reporting by Noor Zainab Hussain in Bengaluru; Editing by Jane Merriman and Alexandra Hudson