31% of Drug Companies Set Compensation Limit on European Physician Payments

RESEARCH TRIANGLE PARK, NC--(Marketwire - Jul 19, 2011) - Just under one-third of drug manufacturers set a compensation limit on their European key opinion leaders to help drive compliant KOL interactions, according to a new study by Cutting Edge Information.

Executives interviewed for the study said that companies implement compensation limits to avoid overusing individual physicians, which can lead to a perception that a KOL is being offered high-value contracts in exchange for promoting specific products, rather than communicating scientific information.

"Annual compensation limits can be a good way to highlight compliance efforts," said Elio Evangelista, director of research at Cutting Edge Information. "These European pharmaceutical benchmarks are not very widespread, but it looks like large drug companies may be setting the tone for implementing these limits."

For activities that require only a few hours of a key opinion leader's work, compensation limits are generally not restrictive. Some activities, however, require many hours of training before the physician can be effective. In these cases, much of the first year's annual compensation cap may be met before the KOL begins working with other medical professionals. A company with annual caps must ensure its relationship with the thought leader will last several years to make financial sense.

The study, "Determining European KOL Compensation: Fair-Market Value Benchmarks," provides detailed metrics on compensation limits for European KOLs. It also includes trends affecting physician compensation in Europe and provides guidelines for thought leader management teams to set competitive physician fee schedules.

The average compensation limit for individual KOLs in Europe is above EUR 30,000, according to study findings. These compensation guidelines apply mostly to relationships with individual thought leaders, although 38 percent of companies with rules for compensation caps apply these rules to interactions with entire organizations.

"Determining European KOL Compensation: Fair-Market Value Benchmarks" includes benchmark metrics for thought leader compensation and key opinion leader payments. The report includes recommendations for how medical affairs teams can:

• Build compliant and effective relationships with key opinion leaders.
• Build a comprehensive thought leader management database.
• Calculate fair-market value and develop physician fee schedules.

For more about medical affairs strategy, key opinion leader relationships and thought leader compensation, visit http://www.cuttingedgeinfo.com/research/medical-affairs/european-kol-fmv/.