November 2012 Archives

Dan Troy, our general counsel, is a firm believer that the billable hour promotes inefficiency, and I agree.

When Dan joined GSK in 2008, he asked me to transition our outside legal spend from billable hours to alternative fee arrangements (AFAs), such as fixed and capped fees. At that time, GSK spent less than 3% through AFAs. Transforming our billing was a big task, and I wasn't sure we could make it work for complex litigations and transactions across the globe. But my team and I were willing to give it a try--and we've been quite successful.

Today, more than 65% of our external legal spend is through AFAs. We've significantly reduced costs while maintaining excellent legal representation for the company.

Our AFAs sometimes include an electronic reverse auction program, suggested by our Procurement colleagues. They had been successfully using online sourcing for sophisticated services in other areas of the company, so we decided to give it a try. It worked, and so far, that program has included more than 85 firms.

There are times when the lowest bid doesn't win, because another firm may have  expertise better suited for a particular matter. We want to have long-term, mutually beneficial relationships with law firms, so it's important to set the right assumptions and to be flexible when things change.

This process has helped GSK save many millions of dollars, which means more funds available to devote to our core mission of helping patients do more, feel better, and live longer.

This week, the Financial Times honored GSK Legal with the 2012 Innovative Lawyer award, recognizing us as a "Standout" law department for "Dramatically reducing external legal spend through AFAs and the development and implementation of an electronic reverse auction system."  This award is a real testament to the successes we've had in transforming our outside legal billing.  It's the third time this year that GSK Legal has been honored with an award for our work in this area. This summer, we were named an American Corporate Counsel (ACC) Value Champion for making a difference through creativity and value-based legal management skills. And in September, Inside Counsel magazine named GSK Legal to their IC10 list of the 10 most innovative law departments based, in part, on our AFAs and reverse auction initiatives.

I'm now a firm believer that AFAs can work for almost any legal matter--in any industry. It's been eye opening and rewarding to lead this work at GSK.

Polls and rankings seem to be everywhere in the news. One published today--the 2012 Access to Medicine (ATM) Index--is worth a closer look.

It is cause for celebration here at GSK because we were ranked highest in the index, which evaluates pharmaceutical companies on their efforts to improve access to medicine in low-income and lower middle income countries. The ATM Index is a major initiative of the Access to Medicine Foundation, an international not-for-profit organisation.

It is cause for a much wider celebration because the foundation is seeing companies "really raising the bar" and stepping up efforts to get medicines to those who need them, regardless of where they live.

The Foundation found that:

• 17 of 20 companies performed better in 2012 than at the time of the last index in 2010. This happened at a time when the Foundation also raised its expectations.
• Companies are developing more medicines for more diseases that disproportionately affect the world's poor
• More companies are using tiered pricing to lower prices for certain countries or specific populations.

Improving access to medicine is core to GSK's overall mission and strategy. Over the last five years we have made changes to our business model, expanding to more countries and making our medicines and vaccines more available and affordable.

Here in the US, we provide some of the most generous patient assistance programs in the industry. In 2011, more than 478,000 patients here received GSK medicines and vaccines worth $115 million.

We will read closely the report's recommendations and invite you to do the same. You can find the full report at www.atmindex.org

Read more about what GSK does to increase access to medicine.

This week, GSK was excited to see the launch of the American Journal of Managed Care (AJMC) Roundtable, "The Quality Enterprise: What is it? Where is it going? And how will it be affected by healthcare reform." This virtual roundtable, which we sponsored, features a range of experts discussing the US healthcare system, and the opportunities to come together to provide better, more efficient healthcare.

At this point, I think all of us in the US realize that our healthcare system is going through a period of dramatic change. In state capitols and on Capitol Hill, policy makers continue to face the difficult task of providing access to care that delivers on both quality and cost-effectiveness. In hospitals, clinics and doctors' offices, payers and providers are responding to the demand for quality and value, and determining how these can be measured and aligned to payments in the system. The pharmaceutical industry is challenged to demonstrate the value its products provide to patients. 

The purpose of this project was to provide an introduction on what we call the "quality enterprise"--all of the various elements that need to be considered when thinking about what makes up a quality healthcare experience. The program also looked at how quality is factored into how healthcare is paid for, the need for standard quality measures, rather than fragmentation, and real-life experiences from experts across the healthcare system. 

To be successful in shifting the way we think about our health, the healthcare industry and the government must come together to find consensus for how to measure--and report--if patients are receiving quality care.

The move towards measuring healthcare quality can be overwhelming. While we all want what is best for patients, this new world will involve some tough decisions, a willingness to collaborate, significant investments, and a steep learning curve for all of us. 

Our hope is that tools like the AJMC roundtable will provoke some insightful discussions about what quality means to many different organizations, and how it can be implemented.

Last week I was invited to represent GSK at an event hosted by the Partnership to Fight Chronic Disease on Capitol Hill to share our commitment to providing our employees with healthcare that is higher quality, while lowering cost. We're doing this through a program called North Carolina First in Health. WellPoint, as well as a leading health policy think tank, the Brookings Institution, also weighed in with their expertise. This is obviously a 'hot topic' as the room was filled to capacity--standing room only. 

In the US healthcare costs are experiencing exponential growth. The real driver behind this problem is the epidemic of chronic disease, which accounts for 75% of the total costs each year. The US healthcare delivery system is set up to deliver acute care--which is very episodic, reactive and volume based. 

However, if we want to control healthcare costs, we need to do a better job of directly addressing the management of chronic disease, which means our care delivery should be more coordinated, connected, proactive, and population based.   

GSK began a program for our NC employees in January 2012 to provide a Patient Centered Medical Home (PCMH) in partnership with Community Care of North Carolina (CCNC).  The program is called North Carolina First in Health. It champions the PCMH model, which we believe is critical to reforming our Healthcare System in the US. Patient Centered Medical Homes offer team-based, holistic care, with a focus on care management. 

We're proud to take part in the important movement to shift our healthcare system to a better place. By offering our employees a quality-based healthcare PCMH experience we're a part of something so much larger. Thanks to healthcare reform demonstration projects like this one, that are taking place all over the country, we're beginning to push toward the 'tipping point' for a new value based healthcare system.

We're also realistic. This care delivery system won't just take over tomorrow. Providers must be trained differently, payers must provide incentives that reward value, and patients must take more responsibility for their own health. We also believe patients should receive the right incentives for making those smart choices. But we are moving in the right direction. Demonstrations like this give us a chance to evolve toward value.

I just attended the 10th annual National PALS event. PALS is the Patient Advocacy Leaders Summit, established by GSK in 2002. Over the past decade, PALS has built a community of patient advocates who come together both nationally and regionally to address current issues impacting America's health. PALS events address the needs of those who advocate for access to healthcare. 

This summit, entitled The Advocate's Role in Implementing Healthcare Reform in an Evolving Environment, brought together more than 100 advocates representing 84 different organizations. What an exciting day, to be alongside all these leading advocates who came to hear national experts talk about healthcare reform in the current political and economic environment. The presenters spoke about implications of the election results, federal budget processes, healthcare reform, and Medicare and Medicaid expansion. They talked about how information technology can drive improvements in quality, safety, and efficiency. And, importantly, they identified opportunities where we as advocates could make a difference. This event was incredibly timely, and it helped us recognize that we have opportunities to influence the changing environment. 

Attendees at the 10th Annual National Patient Advocacy Leaders Summit

As chair of the PALS Advisory Board it's a real an honor to work with health advocates from across the country representing different therapeutic areas who come together as a learning community. PALS gives me the opportunity to meet people with common interests, but who think about it from their own therapeutic perspective. PALS breaks down these silos to find common ground. We get together to share best practices, and learn from one another--how to legislate, how to use social media, how to educate constituents who don't know all there is to know about health reform and in particular the Affordable Care Act. As a direct result of PALS, coalitions have formed to advocate collectively for improved access to healthcare

I am thankful for this decade of support from GSK. These events involve thousands of advocates and ultimately impact public policy for the benefit of patients.

Today, November 15, is an important day for me: it's America Recycles Day. Living on Lake Michigan, I have developed a profound respect for our natural resources. You can catch me most evenings collecting plastic bottles and downed mylar balloons that sometimes litter our sandy beach. I was thrilled four years ago when I got the chance to work on developing a recycling program for empty GSK respiratory inhalers.

Today, I am proud to say that I will celebrate America Recycles Day having launched that recycling program, which allows patients to drop off their empty inhalers at participating community-based retail pharmacies in 31 US markets. It's a program that has been created based on customer feedback, with years of work from me and a devoted team of GSK colleagues.

The GSK program is called Complete the Cycle^TM Recycle Program for GSK Respiratory Inhalers.  Inhalers are used for delivering GSK respiratory medicines. When inhalers are empty, if placed in household recycling bins, they are not be able to be recycled and end up in up in landfills. This recycling program is the first of its kind in the US pharmaceutical industry and is a part of GSK's ongoing commitment to sustainability. We estimate that the Complete the Cycle recycling program will help keep 100,000 inhalers from going to landfills. 

If you or someone you know has empty GSK respiratory inhalers, make it a point to bring them into a participating pharmacy and help us Complete the Cycle! 

There are many times each year when I'm reminded--first hand--of what first drew me to GSK; specifically, the chance to help make a difference in patients' lives. Today, November 14, 2012 is one of those days.

Today is World COPD Day, which means GSK teams across the globe are helping to raise awareness for chronic obstructive pulmonary disease (COPD). It's also another day of living with COPD for a very close relative who first told me she had the disease several decades ago. At the time I felt surprised, uncertain regarding what this meant for her future, and above all, powerless to do anything about it--either for her or anyone else. After all, what difference could I possibly make? 

But I've learned over time that one of the best things we can to do "help" on an individual level is to spread the word. Doing so shows the affected person that we care, and it can have a potentially significant educational benefit to others, who in turn are empowered.      

Here are a few key points I've learned, and would like to share. COPD affects millions of people globally, often through coughing and breathlessness. Obviously, this can have a major impact on their normal activities.

But unlike asthma, it remains relatively poorly known and understood. For example, many people in the US who have COPD remain unaware that they have it, as only about one half are diagnosed. So that's how I contribute--by spreading the word and encouraging patients to talk with their doctor.  And it's never too late.  Visit COPD.com for more information and to download a guide to help patients talk to their doctor. If you know someone who may benefit from these tools, please direct them to the site and show your support for World COPD day. 

I grew up in West Georgia, in a region sometimes called Hurricane Alley (and Tornado Alley). I've always considered myself to be a veteran of bad weather. I rode out many a storm in my grandparents' cellar, among the spiders, pot belly stove, and library-tidy rows of colorful canned vegetables and fruits. It was actually kind of fun then and things usually returned to normal fairly quickly after the storm passed. 

But for the past two weeks in my Northern New Jersey community, I assure you there has been nothing fun about Hurricane Sandy. Much of New Jersey has been devastated by Hurricane Sandy and the merciless toll it has taken on our homes, possessions and, significantly, our collective peace of mind. It's humbling to go from a reasonably comfortable existence overnight to wondering how your family's most basic needs will be met, even on a short term basis: staying warm, a nutritious meal, and please don't overlook the emotional and physical benefits of a hot shower! And, we only lost power and services like cable and internet. Many of our neighbors further south along the Jersey Shore and east in NYC lost so much more in the storm surge and flooding, and they'll be facing these losses for months and possibly even years to come.

What struck me during this weather emergency is how gracious and supportive people have been to one another through this crisis. Within the GSK family, this has been evident and touching in so many ways. As a company, we have a culture of giving, but normally, our giving is focused externally. This time, the need has come from within, and our company and people have responded readily and generously.

Thankfully, all of our employees in the New Jersey, New York and Philadelphia area are safe. Our Parsippany, New Jersey office is just coming back to life after almost two full work weeks due to the storm and its damage. Many of our colleagues have lost or damaged homes and cars, with many continuing to struggle with the prolonged loss of power, meaning no heat, water or a place to keep and prepare their food safely.  And, there are the never ending lines for gas for cars and generators.

In the aftermath of the storm, GSK is providing much needed financial assistance to our employees and affected communities. Our colleagues have reached out and offered whatever they have to share with others. In fact, so many stepped forward in our Parsippany offices that a spreadsheet had to be created just to keep up with all the kind offers. These ongoing gestures of kindness and understanding range from a warm shower to a hot meal and a spare bedroom, from internet use and charging of electronics like cell phones and laptops, to a ride to get gas or just some normal conversation and companionship.

Employees at our sister site in Pittsburgh, PA, have loaded and driven three full van and truckloads of generators, gas, paper products, flash lights and anything else they thought we could use to help bring comfort and some semblance of normalcy to our traumatized lives. Personal expressions of concern and encouragement have traveled from around the globe to help warm our souls, even if our surroundings are still quite chilled. And our leaders have mandated we put safety and family first, ahead of work responsibilities, and focus on our recovery. Work can wait, they said.

The lights are slowly coming back on; damaged roofs are being repaired; refrigerators are being restocked and many of us are enjoying hot showers for perhaps a little longer than usual. I certainly won't be taking these basic rituals of everyday life for granted anytime soon. But more importantly, I won't be taking for granted the many people who have stepped forward, even when they were struggling themselves, to help us all recover from Sandy.

You can read more about GSK's support for hurricane victims here.

Photo courtesy of the American Red Cross.

Today I spoke at the Thirteenth Annual Pharmaceutical Regulatory and Compliance Congress in Washington, DC. I'm really grateful for the opportunity to share my views on how those of us in the pharmaceutical industry conduct--or should conduct--our business.

When I was invited to speak there, I tried to imagine how a group of compliance officers would view my participation. Why is she addressing a compliance conference? Her company just reached a 3 billion dollar settlement with the US Government. Maybe she should be attending, but not speaking!

That's precisely why I jumped at the chance. Trust is the currency of our industry. I've seen firsthand what happens when our motives are questioned and that trust is broken. I also know personally the good work that our industry does. Patients, doctors, and caregivers depend on us to improve their health and wellbeing.

I've worked in this industry for more than 25 years. My reason for giving the speech was not to point fingers, but to hold up a mirror to our industry. And in holding up that mirror, I see that some of the ways we've operated, as an industry, have evolved over time and perhaps gotten us to a place where we probably never consciously planned to end up.

I had three key points:

• At GSK, we conduct our business in a way that not only complies with laws and regulations, but also in a way that reflects what society rightfully expects. I believe we must instill a values-based culture within our organizations. Values that ground our every decision and every action.

• A fine is NOT a cost of doing business. The idea that fines and government settlements don't matter to pharmaceutical companies is just wrong. It is a big deal. We get it.

• Every single person in our industry must be accountable for serving our customers and patients in a way that reflects a core set of values. For those of us who lead organizations, that means communicating, demonstrating, and investing to foster that accountability. The result should be that values and compliance are integrated into both the culture and processes of our businesses.

I hope that I gave those in attendance a sense of how we're working to "walk the talk" at GSK. I hope that, by holding up a mirror, I showed why a values-based approach to compliance is important for our industry, and why I support the government's efforts to make sure that everyone in our business is committed to doing the right things for the right reasons.

Finally, I asked my friends and colleagues across the pharmaceutical industry redouble our efforts to communicate, demonstrate, and invest to make sure that we take personal responsibility for doing the right thing for those who count on us. With that kind of commitment, we will continue to help people live healthier, happier, longer lives.

You can read the full transcript here.