Drug company GlaxoSmithKline has announced it will stop using two common sales methods: paying doctors to promote its products to other doctors and paying sales representatives based on how many prescriptions doctors write.

According to the New York Times this is the first such move by a big drug company, although others are thought to be considering something similar.

Glaxo’s change comes amid growing concern about conflicts of interest in the medical industry causing over-prescription of drugs.  Incoming regulations in the US will make doctors declare income from drug companies.

Heathcote Investment Partners director Clayton Coplestone said the move raised some interesting parallels with the way things operate in the financial industry, where many advisers are paid commission by product suppliers. 

“If some doctors were reliant on suppliers to pay their bills, that wasn’t a healthy business model,” he said.

“I’ve been advocating for a long time that financial advisers have got to be in control of the billing process.  It’s Business 101: you can’t be reliant on any third party for your income.  You’ve got to have a clear value proposition and you’ve got to be able to charge for what you think you’re worth.”

Coplestone sees some other parallels between the two industries, including the “relationship premium” doctors have with their patients and financial advisers with their clients.

In both industries technology is empowering consumers, causing them to ask questions of where value is being added, he says.  

“If I go to the doctor and he says ‘you’ve got to take aspirin for the rest of your life’, remind me why I need to go back to the doctor when I can go down to the supermarket?”