January 30, 2020

CEI is excited to launch our latest database of global fair market value rates. This database allows life science companies to determine appropriate compensation amounts for HCPs and other thought leaders. Thanks to our continued partnership with companies throughout the industry, we have refreshed our market data and published the most accurate global database to date.

One of the biggest changes we are continuing to track is the rise in US FMV rates. Over the past three years US rates have gone up 16.4% overall. This is in contrast with modest single digit increases in many other markets, and even modest decreases in parts of Europe where regulatory changes are putting downward pressure on rates.

The increase in US rates is particularly marked therapeutic areas such as Oncology and Gastroenterology. Compensation for both specialties has gone up more than 20% since 2017. We are also seeing a smaller spread in compensation amounts, indicating that rates generally moved up uniformly, not because a few therapeutic areas or specialties went up significantly.

A note on the basis of our findings: our methodology uses annual worldwide surveys of actual FMV rates being paid by pharma and medical device companies for the services of HCPs. This was augmented in the 2020 database by a collection of nearly 50 rate cards contributed by life sciences clients and survey participants. The rate cards represent approximately 34,000 individual rate observations, which were combined with the 2018 and 2019 survey responses, collected in the fall of each year. The total observation count was 104,524.

The observations were processed by a stepwise regression complemented by a compression algorithm, and an algorithm that blended the regression results with actual observations for a “cell” consisting of a tier, country, and therapeutic area. This blending was completed by Bayes analysis. The compression algorithm adjusted outliers (both small values and unusually high ones) and calibrated our recommendation range of 25% to 75% to conform to the Normal distribution. The entire process is covered in our U.S. Patent Application Number No. 14/863,594.

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ABOUT THE AUTHOR

Jacob Presson is the manager of FMV Services at Cutting Edge Information. In this role, he delivers premier FMV data to life sciences companies to ensure compliant HCP engagements. As an experienced analyst, Mr. Presson believes that robust data is the best tool for informed decision making. He is a graduate of N.C. State University.

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