Glaxo weighs compensation changes for U.S. sales team

GlaxoSmithKline PLC, which replaced the head of its struggling U.S. operations in February, is considering changes to its compensation model for sales staff, according to an internal memo obtained by Bloomberg News.

A task force is looking at "more comprehensive options to simplify the Patient First program" for incentive pay and will provide a report within a month, Glaxo, based in London, said in an April 1 statement to its U.S. sales employees. Sarah Alspach, a spokeswoman for the U.K.'s largest drugmaker, confirmed the contents of the memo.

The review of the compensation model underscores the pressure on CEO Andrew Witty to revive U.S. operations, which account for almost a third of Glaxo's sales.

The Patient First program was begun in 2011 to end the focus on sales targets after allegations that Glaxo had illegally promoted drugs and failed to report key safety data. Under the program, bonuses are based on scientific knowledge, selling competency, customer evaluations, and overall performance of the representative's business unit.

The company suspended some training programs for April and May while the review is underway in response to "feedback from the field," according to the note, which was sent to sales employees after a March 23 announcement by U.S. pharmaceuticals head Jack Bailey about the changes.

"We remain resolutely committed to our commercial model," Glaxo said in an e-mailed statement Friday. "Glaxo has led the industry by changing the way we reward our sales representatives."

The Patient First program was rolled out in 150 countries this year, according to the company.

U.S. sales staff will be paid their target bonus for a portion of the year while the compensation system is under review, according to the memo.

In November, Glaxo amended the program to change the way sales staff were tested on their knowledge of products as part of their evaluation, sources said.