SOURCE: Cutting Edge Information

November 27, 2007 07:27 ET

Determining Thought Leader Fair-Market Value: What Really Is Fair?

RESEARCH TRIANGLE PARK, NC--(Marketwire - November 27, 2007) - A new report by business intelligence leader Cutting Edge Information indicates that pharmaceutical companies use hard metrics as well as qualitative information to determine compensation for thought leaders. Each contract with a thought leader also requires subjective judgment from the party handling the compensation.

Though the OIG guidelines insist companies pay "fair-market value" (FMV) for thought leader services, there is vagueness within the OIG guidelines as to exactly what the FMV amounts to. One reason this vagueness might exist is because the compensation of a thought leader often involves factors, such as location and opportunity costs, which are difficult to measure in a hard-metrics process.

Many surveyed companies are trying to cope with the difficult task of determining a thought leader's fair-market value. Initially, some companies handling thought leader contracts may determine compensation through past experience, anecdotal evidence, or market studies. As time goes by, these same companies are able to establish a history of their own payments and can compensate thought leaders based on that and other market factors. In an ideal situation companies should establish benchmarking databases of their own which generate codified fee schedules.

"Such fee schedules not only provide guidance to companies, but they also serve as proof that companies are attempting to follow FMV regulations," said Elio Evangelista, lead researcher of the study. "Companies are really striving to find a quantitative/qualitative middle ground where they take into account hard metrics but are also cognoscente of other factors, such as a thought leader's area of residence."

"Thought Leader Compensation: Establishing Fair-Market Value Procedures," available at, is a study designed to help pharmaceutical manufacturers remain compliant, as well as develop fee schedules for physicians' consulting and advisory activities. The study provides fair-market value benchmarks of hourly rates, as well as additional fees for services, such as:

--  Delivering a promotional or scientific speech
--  Leading, moderating or participating in an advisory panel
--  Writing a medical publication

"Thought Leader Compensation: Establishing Fair-Market Value Procedures" is a study of 46 top pharmaceutical, biotechnology, medical device companies and third-party providers' fee schedules for physicians in 20 therapeutic areas and in various specialties.

Download a free summary of "Thought Leader Compensation: Establishing Fair-Market Value Procedures" or purchase the report at

Contact Information