Announcing his plans to retire as CEO of Glaxosmithkline plc with a call to arms, industry provocateur Andrew Witty rallied a Washington think tank audience Thursday to pursue greater industry modernization, transparency and action.
Witty addressed a crowd at the Center for Strategic & International Studies on Thursday, calling on his peers to overturn perceptions that drugmakers care more about selling prescriptions than bettering health care and to move beyond thinking and practices that haven't kept pace with the transformation of pharmacy from a cottage industry to a global one. "Industries have to change with changes of mind," he said.
Changes at GSK have taken various forms. For one, the company has digitized its sales process, making a massive move away from direct sales to on-demand, online sales calls. It has also undertaken major tweaks to the way sales representatives are paid, moving them away from incentive-based compensation that rewards aggressive selling and toward engagements that are intended to answer doctor's questions when they have them.
The Brentford, U.K.-based company issued a global prohibition on payments to doctors for speaking on behalf of the company in an effort to "take the fuel away" from practices that can erode trust and lead to scandal. It has also required that any company collaborating with GSK adopt the same policies.
The company has had more pressures to change than most. A major mid-2013 scrape in China left it scrambling to restore its reputation there and investors dissatisfied with its profits have pressured it to cut costs and further reorganize its business, possibly through a break-up. (See BioWorld Today, March 10, 2015.)
Witty also called for greater industry transparency, something he said has been "an Achilles' heel for years. In the old days, GSK was hurt through transparency criticism," he noted. In a move to change its stance, GSK became the first big pharma company to sign up and to begin to address the demands to open the books on its clinical trials, something that has led it to make available data for every trial the company has run. (See BioWorld Today, Aug. 4, 2015.)
Last month, GSK put on its website data from the 1,700th and final trial in its archives, a collection that has been accessed by 63 researcher teams to date. "If they find in there that we missed an efficacy signal, great," he said. "And if they go in there and they find we missed a toxicity signal, I won't be happy, but good. Because if it's there, I'd want to know about it."
On a subject nearer to the hearts of GSK investors, Witty highlighted the company's unusual move to publish its target rate of return on R&D: 14 percent. As of today, he said the company is running at about a 13 percent return vs. the 7 percent rate it was at when he first joined. He chalked up the advancement to failing less often and having fewer costs tied up in fixed infrastructure.
Who will next take on the mission of advancing that rate of return is unclear. The company's board said Thursday that it has agreed that Witty will retire on March 31, 2017. A formal search for his successor will consider both internal and external candidates for the role.