July 2011 Archives

Monday was an interesting day. I had a rare opportunity to represent my company at an event at the White house where I met with President Obama, Colin and Alma Powell, and 35 other business leaders. We were invited there to discuss the education crisis in the US--and talk about solutions.

At the White House, many of the businesses made pledges of financial support--including GSK. We committed $10 million dollars over the next five years toward education--which made me very proud.

One third of that money will be focused on preventing students from dropping out in the lowest performing schools. We will also dedicate two of our PULSE volunteers for drop-out prevention initiatives and STEM education (that stands for Science, Technology, Engineering, and Math).  Additionally, we recently pledged $5 million to the City of Philadelphia to support youth development so they can achieve success in the workforce.

Thirty percent of all high school students do not graduate, and half of all minority students do not graduate. That is unacceptable. But our commitment is not just philanthropy; it is an investment in our future. As a high-tech company, we depend on a highly-educated workforce to remain globally competitive.  In other words: we need these kids to graduate so we can hire them!

General and Mrs. Colin Powell are long-time supporters of education reform, as is GSK. For more than 25 years, GSK has invested in education. So we already have some success stories to share. The North Carolina New Schools Project is a great recent example. The STEM schools in the New Schools project, many of which were in economically depressed areas, now have half the drop-out rate of conventional schools in North Carolina. 46 of those schools have a zero drop-out rate. That is impressive!

To reform education, the private and public sectors--and individuals--need to work closely together. I am excited about GSK being part of the solution, and I look forward to getting involved personally.

Policy makers are proposing changes to Medicare as a way to reduce the annual deficit and tackle the nation's current debt ceiling crisis. One proposal would require drug manufacturers to pay the federal government a rebate for drugs purchased by low-income enrollees in Medicare Part D plans. The rebate would apply to prescriptions taken by dual eligibles (people eligible for both Medicare and Medicaid) as well as other Medicare beneficiaries who are eligible for low-income subsidies. On its face, it sounds like an attractive way to help ease the burden of entitlement programs, but in reality the negative impacts from this proposal could be far reaching.

According to the Congressional Budget Office, the proposal would save the federal government about $38B from 2012-2016 and about $112B over the 2012-2021 period, however, it is not expected to generate any significant savings in 2012, and only $4B in 2013, meaning it will do little to solve the immediate debt ceiling crisis. A reduction in revenues of that magnitude to the biopharmaceutical industry on top of the anticipated $90B cost to the industry from passage of the Affordable Care Act in 2010 could have harsh consequences for patients and the economy.

Joseph Antos of the American Enterprise Institute in his report Tampering with Part D Will Not Solve our Debt Crisis warns "If this policy is adopted, patients will bear the costs." He explains that the proposed policy could result in more restrictive formularies and increased copayments for all Medicare enrollees, and particularly the most vulnerable Americans - those with the lowest incomes and poorest health.

In a time when we need to do all we can to create jobs in this country, the biopharmaceutical industry should be one place we should be looking to grow, not weaken. A new report from Battelle Technology Partnership Practice estimates that a $20 billion per year reduction in biopharmaceutical sector revenue would result in 260,000 job losses across the U.S. economy. To help put that number in perspective, the biopharmaceutical industry currently supports nearly 675,000 direct jobs and an additional 3.4 million indirect jobs. Our country cannot afford to lose hundreds of thousands of more jobs, especially when the biopharmaceutical industry has already restructured and downsized significantly as a result of declining revenues due to patent expirations as reported earlier this year in the New York Times.

These are lean times in the industry, and in the country, but we should not lose sight of what's important. As the Battelle report highlights, the biopharmaceutical industry develops products that make the U.S. a world leader in innovation, help prevent and effectively manage disease and chronic conditions, improve quality of life, increase longevity, and reduce the likelihood that patients will need other more costly healthcare treatments (such as hospitalizations). We need public policies to help sustain these positive benefits for the economy and for patients.

This month we implemented the next phase of our new incentive compensation program for professional sales representatives by introducing a new performance evaluation methodology and process.  

If you follow us closely, you may recall that in January of this year, we implemented the first phase of our new approach by eliminating individual sales goals as part our incentive compensation program for our sales representatives who work directly with healthcare professionals. 

The new methodology we implemented starting July 1, will evaluate the performance of our sales professionals and align their bonuses with the company's values of transparency, respect for people, integrity and focus on the patient. 

Under the new system, our reps who work directly with healthcare providers will continue to be compensated with a competitive mix of salary and bonus.  But, in place of individual sales targets, three primary factors will be evaluated to assess performance and determine bonuses: selling competency, customer evaluations, and the overall performance of their business unit.

This is an important change for how we conduct our business.  Our sales professionals play a critical role in providing doctors with appropriate, updated information on the safety and benefits of our medicines.  This information helps doctors make informed treatment decisions for their patients.  We believe taking this industry-leading approach to incentive compensation aligns our performance measures with our values, and will help doctors be confident that our sales professionals are aligned with their goal of improving patient health."

Those of us who live and work in the Triangle area of North Carolina (Chapel Hill--Durham--Raleigh) know we've got a good thing going. Now the 14 million passengers on Delta will be able to read all about it when they're flying around the world or the U.S. during the month of July. The Triangle, and companies including GlaxoSmithKline, are featured in a 36-page section of the Delta Sky Magazine found in the airline's passenger seatbacks.

Raleigh Mayor Charles Meeker and Durham Mayor Bill Bell joined with executives from Delta, the Raleigh-Durham International Airport and area leaders to celebrate the official recognition and bragging rights. The article, headlined "The Power of Three," looks at how North Carolina in the 1950s chose to capitalize on its three world-renown research universities--Duke, North Carolina State, and the University of North Carolina--to create a thriving center of innovation, culture, and diversity.

There were 41 interviews with well known local residents including Duke Basketball Coach Mike Krzyzewski, musician Branford Marsalis, and GSK's own Chief Medical Officer Ellen Strahlman. For GSK, North Carolina is home to about 5,000 employees in R&D, manufacturing and commercial operations. It was here that GSK scientists joined with colleagues at the National Cancer Institute and Duke University to develop the first therapy targeting HIV/AIDs in 1987. Most of GSK's medicines for the US are made in the state. And the company contributes about $1.7 million a year to nonprofit organizations focusing on health and education in the state.

So there's a lot more to this area than sweet tea, barbecue, and basketball. Maybe that's what really attracted folks from around the world and what keeps them so happy. Read all about it here.