SOURCE: Cutting Edge Information

Cutting Edge Information

January 18, 2017 08:17 ET

Pharma Compliance Teams Approving Physician Compensation Cap Exceptions

RESEARCH TRIANGLE PARK, NC--(Marketwired - January 18, 2017) - Although more pharmaceutical companies have instituted compensation limits as a response to scrutiny over their payments to physicians, there are still exceptions to those rules.

Increasingly, exceptions to physician compensation limits have become common practice. According to the study, Developing and Maintaining Annual Compensation Caps for HCPs, granting compensation cap exceptions for key opinion leaders with highly unique or specialized knowledge of diseases, elite-level reputations or particularly large workloads is standard industry practice. However, allowing exceptions for depth of involvement in new product initiatives, higher FMV rates for certain therapies or regions and depth of involvement in certain competitive market segments are all acceptable industry practices as well. Only 17% of surveyed pharma companies consider past instances of exceptions to compensation limits when waiving payment caps.

"Companies must not only comply with government regulations, but also avoid the perception of buying HCPs' support," said Jacob Presson, senior consultant at Cutting Edge Information. "One way that companies avoid this perception is by setting compensation caps. These limits serve as a means of ensuring that no single HCP receives too much compensation for performing services in a given year. A key way to ensure that these compensation caps are accurate is by involving different company functions in the approval process."

The study, found that compliance teams at 97% of pharmaceutical companies are involved in approving compensation cap exceptions. However, it is industry standard practice to involve not just compliance, but legal and medical affairs in compensation cap exceptions decisions as well.

There are two types of medical affairs functions in the approval of compensation cap exceptions which include HQ-based medical affairs and field-based medical affairs. Surveyed pharma companies also reported using commercial (42%) and procurement (6%) functions in this process.

These principles and benchmarks outlined in Developing and Maintaining Annual Compensation Caps for HCPS will improve drug companies' approaches to setting compensation limits. The research, available at http://www.cuttingedgeinfo.com/research/medical-affairs/developing-maintaining-annual-compensation-caps-hcps/, details benchmarks for annual compensation limits for HCPs, both commercial and clinical caps and factors that companies use to determine annual compensation caps and policies. The research is designed to help life science executives:

  • Explore how companies manage annual compensation caps
  • Monitoring the hourly rate of KOL compensation
  • Maintain successful and appropriate annual compensation cap policies

For more information about Cutting Edge Information's KOL compensation and fair market value services, visit http://www.cuttingedgeinfo.com/physician-fair-market-value/.

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