GSK finds axing doctor payments needn't torpedo sales

By Ben Hirschler

LONDON (Reuters) - It has been one of the pharmaceutical industry's most closely watched experiments: does ending payments to doctors undermine drug sales?

GlaxoSmithKline (GSK.L), the British drugmaker, believes it has proved that raising the ethical bar on marketing practices doesn't necessarily reduce competitiveness.

Chief Executive Andrew Witty said better-than-expected first quarter results on Wednesday coincided with a period where the entire group had operated under a new policy that bans payments to doctors who speak on behalf of GSK.

"It convinces us that the moves we've made are both good for our business and also good for improving the reputation of the industry," Witty told reporters.

GSK, which was fined nearly $500 million in 2014 for bribing doctors in China, is the first drug company to implement such a broad clampdown on payments to prescribers and competitors are watching closely to assess the commercial fallout.

In China, GSK's business is still struggling, with sales down 28 percent in the first quarter, due to disposals of some products and lower prices, but Witty said he expected GSK to return to growth in China in the second half of 2016.

(Reporting by Ben Hirschler; Editing by Elaine Hardcastle)