Key Opinion Leader Compensation Creates Opportunity for Small Companies

RESEARCH TRIANGLE PARK, NC--(Marketwire - Jun 7, 2011) - A new study of how life science companies set fair-market value benchmarks for physician compensation finds that smaller drug manufacturers spend 25% more per hour than their large-company counterparts. Even among companies that pay flat fees for key opinion leader (KOL) compensation, small and medium-sized companies pay at the highest rates.

"Although the chance to work on groundbreaking scientific opportunities is a significant motivator for KOLs to contract with life sciences companies, compensation is also a driver," said Elio Evangelista, director of research at Cutting Edge Information. "Small companies will often spend more than their larger counterparts to work with specific experts in the field."

The report, "KOL Fair-Market Value and Aggregate Spend: Documentation, Tracking and the Sunshine Act," analyzes fair-market value (FMV) data across Life Science industries to assess the most recent KOL compensation fee schedules.

"The requirements for setting and tracking fair market value are becoming stricter, but there are still large opportunities to create competitive advantage," said Evangelista. "Determining FMV for thought leader compensation helps a company stay in compliance with Sunshine Act regulations. It also helps feed a best-in-class system to aggregate KOL spending data, as well as track and document KOL activity."

In the era of increasingly strict oversight of sponsor-physician interaction, KOL compensation has become an area where small firms can gain a competitive edge. Large and even some mid-size companies have higher public profiles than most small companies. But that exposure often leads to greater regulatory scrutiny. Small-company medical affairs teams can establish fair-market value procedures that pay KOLs a premium because they typically have fewer KOL relationships and engage in fewer activities with each thought leader.

Cutting Edge Information's finding that physician fee schedules are increasingly a differentiating factor is in line with Cutting Edge Information key findings in past studies. Researchers previously observed that small companies had begun offering higher compensation to pull thought leaders away from opportunities that offer only baseline compensation.

"KOL Fair-Market Value and Aggregate Spend: Documentation, Tracking and the Sunshine Act" is available at http://www.cuttingedgeinfo.com/research/medical-affairs/thought-leader-fmv/.