Cutting Edge Information
Taking Charge of FMV Compliance

For drug and device companies, setting compliant, competitive guidelines for the compensation of healthcare professionals is easier said than done, especially with countries everywhereincreasing their focus on transparency and ethics. As the industry races forward, old methods for identifying fair market value (FMV) fall short, especially when setting rates for hundreds of different types of medical specialists—in every possible market around the globe. The scope can be overwhelming.

The age of data analytics, however, has taken the guesswork out of this dizzying task. Using real- world FMV information, compliance teams now set defensible, competitive rates that make sense for doctors, nurses, patients and others in a way that effectively sees both the forest (each market) and the trees (each HCP) at the same time. It is here—at this juncture of highly detailed, critical compliance data—that Cutting Edge Information shines with its unique, global FMV rate data, derived from the world’s largest database of actual market rates paid to HCPs of all types and tiers.

How did the industry get here? Each country requires companies to travel a unique compliance road, but many of those roads wind toward a similar destination: fair, compliant transfers of value between the industry and HCPs. Take the United States, for example. In 1972, the U.S. Congress passed the Anti-Kickback Statute, prohibiting medical device, pharmaceutical, and biotechnology companies from paying incentives to healthcare professionals (HCPs) in excess of fair market value (FMV). The core focus of this statute was to ensure that HCPs are not offered any additional remuneration to promote new drugs or devices. More recently, the Physician.

Payment Sunshine Act (PPSA) was also mandated in conjunction with the Anti-Kickback Statute, obliging pharma companies to go a step further in demonstrating that their payments are for ‘bona fide’ purposes and adhere to FMV.

With such regulatory frameworks in place today, increased scrutiny has prompted pharma, biotech, and device organizations to cover their key risk areas and ensure that HCP payments are never construed as kickbacks or part of quid pro quo arrangements.

And although companies want nothing more than to demonstrate their payment fairness and transparency, the lack of a standardized FMV fee framework makes compliance with these regulations a difficult endeavour.

For one, each organization sets compensation differently. Different types of doctors warrant different honoraria, countries are managed differently, levels of HCP influence are tiered differently, and no two companies pay the same amount for the same type of service.

Also, when it comes to an industry like healthcare, where there are hundreds of medical specialists, non-medical service providers, and technicians—plus other partners such as payers, patients, and caregivers—determining accurate FMV rates can be perplexing.

Thus, it comes as no surprise that companies are caught between a rock and a hard place when it comes to determining HCP FMV. If their payments exceed FMV, they risk significant penalties—but if their compensation levels are unsatisfactory, they end up endangering their collaborations with the HCPs.

So how can pharma organizations free themselves from this ‘Gordian Knot’?

Cutting Edge Information (Cutting Edge) is here for the rescue! The market research company, with its in-house team of statisticians and research analysts, collects and analyzes global FMV data, before aggregating it into its extensive database.This FMV database is based on more than 100,000 observations gathered annually from pharma and life science organizations all around the world.

It addresses multiple HCP variables, including more than 260 specializations, rates for a variety of activities, 130-plus countries, four different tiers, and so on. Leveraging this powerhouse of FMV data, Cutting Edge enables its pharma clients to develop robust, defensible, and transparent FMV frameworks that reduce compliance risks, enable consistency, and improve HCP acceptance

What is Cutting Edge Information’s Secret?

Cutting Edge transparently collects FMV data and related compliance information from actual company rate cards as well as targeted surveys, thereby ensuring the scope and relevance of collected data. This approach allows Cutting Edge to isolate and analyze critical variables such as country, specialty, tier, and engagement type.

Through a regression-based analytic process, data scientists merge this market-based rate data with additional economic indicators, and where available, HCP salary data. Because Cutting Edge collects more direct FMV benchmark data than any other company, the analysis reliably uses real-world rates, and the work results in the largest global FMV data set in the industry. The team then translates the data into country-specific data sets that include industry mean, median, and maximum recommended payments, as well as payment percentiles, broken down by HCP type, tier, and activity.

Cutting Edge has recently upgraded FMVConnect PRO with the addition of the HCP Fee Calculator—an automated online tool that accelerates the process for building HCP engagement fees

"This information is then made available through FMVConnect PRO, which can be filtered and viewed based on different criteria such as country, HCP specialty, currency, and more,” says Eric Bolesh, chief operating officer of Cutting Edge Information. With this digitized solution, pharma and life science companies can seamlessly formulate an HCP fee schedule based on detailed compensation benchmarks. However, since no two pharma companies are the same, the specific rates that a company licenses from Cutting Edge can also be exported into excel spreadsheets or delivered in a number of other formats to fit various company systems. And since Cutting Edge already has all of the data and rates for 260+ titles in 130+ countries, clients typically start accessing their rates within hours.

What’s more? Cutting Edge has recently upgraded FMVConnect PRO with the addition of the HCP Fee Calculator—an automated online tool that accelerates the process for building HCP engagement fees. With the Calculator, users build fees by specifying the exact HCP activity, the duration for the event, additional compensation (e.g., prep time, travel, etc.), and other customizations.

With this information, the Calculator generates engagement fees based directly on the company’s chosen hourly rates.

It is also important to note that Cutting Edge goes to great lengths to ensure that their clients are updated with any recent changes in the market. Technology and data are only half the picture when it comes to Cutting Edge’s differentiating factors, according to Bolesh. “We also act as a partner and information source in this space,” he mentions, “by showing teams what is the industry standard for any number of issues, large and small.” To this end, Cutting Edge periodically publishes white papers to help clients manage HCP compensation on a global scale. For instance, a recent 2021 report titled “Post COVID-19 HCP Engagements: Understanding the Impact of Virtual Events” highlighted the impact of the pandemic on HCP events and interactions.

Staying Ahead of the Curve

A testament to Cutting Edge’s proven FMV data delivery solution and longstanding experience in the compliance sector is the exhaustive list of pharma, biotech, and medical device organizations that the company serves around the world.
Interaction with this enormous client base also makes Cutting Edge well-suited to understand each and every challenge that arises in the FMV space. Therefore, organizations of any size and stature—be they major global compliance entities, mid-sized pharmas, or pre-revenue biotechs seeking to build out their compliance capabilities—can benefit from partnering with Cutting Edge Information.

“We evaluate each client equally, and our data deliverables are designed to accommodate their individual needs,” notes Bolesh. “Depending on their unique requirements, our clients can tune FMVConnect PRO to display only a few data points meant for inclusion in rate cards or engagement platforms—or they use it as a full-fledged global FMV rate solution.”

Weathering the COVID-19 Pandemic

While being a constant compliance companion to its clients, Cutting Edge is also partaking in the battle against COVID-19 and lending a helping hand to public welfare in its home state. “We gave away free hourly FMV rate tables for HCPs on the front lines of the pandemic to any company that needed them, client and non-client alike. It was one small way that we could help the industry take on the unbelievable battle of facing down this pandemic,” shares Bolesh. Additionally, the company’s sizeable donation to the UNC Health Foundation for funding research and awareness campaigns clearly demonstrates Cutting Edge’s commitment to public health.

Today, propelled by such innumerable contributions and accomplishments, Cutting Edge Information is achieving global growth and prominence. In fact, the company’s FMV rates have been deployed by more than 250 organizations, including most of the pharma industry’s top 25 companies. With a steady number of new clients joining the Cutting Edge family, the company is also seeking to enhance its already exceptional services even further. “Our ultimate mission is to be an unmatched partner to all our clients as we help them navigate the evolving complexities of the HCP compensation landscape,” concludes Bolesh.