by Art Gutman Ph.D., Professor, Florida Institute of Technology
In a consent decree announced on June 6, 2011, AstraZeneca agreed to a $250,000 (plus interest) settlement on behalf of 124 female pharmaceutical sales specialists that, allegedly, received on average $1,700 less than male comparators. The consent decree may be viewed at the following link: AstraZeneca Settlement.
That’s just the beginning. In addition to the monetary settlement, AstraZeneca agreed to conduct a multiple regression analysis of the base pay of 415 full time “primary care” and “specialty care” Level III pharmaceutical sales specialists as of Jan. 1, 2011, at various sales territories, including Pennsylvania, New Jersey, Delaware, Virginia, West Virginia, Maryland, District of Columbia, North Carolina, South Carolina, New York, Kentucky, Alabama, Indiana and Tennessee. According to the consent decree, the analysis will focus on “Gender, using an indicator variable”, controlling for the following variables:
- Age, as a proxy for experience prior to employment with AstraZeneca or a legacy company, and age squared
- The amount of time employed at AstraZeneca or a legacy company using date of hire or re-hire for each employee, and the amount of such time squared
- MRP (market reference point), using an indicator variable for either “specialty care” or “primary care.” AstraZeneca represents that “specialty care” Level III PSSs market products in more than one specialty area
- The most recent annual performance rating, which AstraZeneca will code for the purpose of this Consent Decree using indicator variables for each possible rating; and
- Initial hire at any of the following four legacy companies, using an indicator variable: Astra USA, Astra Merck, Zeneca or AstraZeneca
According to the consent decree, the company agrees to base pay adjustments for female sales specialists if there are significant differences based on gender after consideration of the control variables. The company also agreed to “prepare and update annually its Affirmative Action Plan and to keep all supporting documentation as required by the provisions of the Executive Order and its implementing regulations.” There are other interesting aspects of the ruling, so stay tuned for more from DCI staff on this settlement.