GlaxoSmithKline, one of the world’s largest pharmaceutical companies, has announced it will no longer pay doctors to endorse its drugs, nor will it tie sales reps’ compensation packages to the number of scripts a doctor writes. This will bring to an end a practice long considered dubious and potentially dangerous–just before the public disclosure of such fees is set to be mandated by the new Affordable Care Act. The Obamacare website may be a shambles, but aspects of the law requiring enhanced transparency by healthcare providers and big pharma are already having an obvious effect.
Glaxo isn’t stopping this longstanding practice because it wants to be a better citizen. The company is ceasing to pay doctors because it has calculated that the risk presented by public exposure about the true extent of the payments would be bad for its brand and its business. In other words the fictional Dr. Jones of Scarsdale, NY will no longer be a “made man,” to use terminology from another famously powerful hierarchical system, rewarded for collecting what is essentially “protection money” from those without much choice. (If a doctor says you need a drug, you take the drug–and insurance outlays soar.) When the healthcare law advocates predict that costs will go down, they are counting on transparency like this to eliminate inefficiencies and kickbacks that bloat the system.