RESEARCH TRIANGLE PARK, NC--(Marketwired - September 21, 2016) - Pharmaceutical companies have been under the regulatory spotlight for potentially overpaying physicians that provide them consulting or advisory services. New research published by Cutting Edge Information found that surveyed drug companies rely most heavily on regulatory guideline reviews when establishing compensation cap policies.

Overall, 28% of drug companies depend exclusively on this legal review -- more so than any other individual factor. The exact nature of this review is dependent upon individual markets and the types of healthcare providers (HCPs) that companies intend to engage.

According to the research, Developing and Maintaining Annual Compensation Caps for HCPS, competitor policies do not always drive compensation cap policies among surveyed companies. However, the collected survey data show that small companies behave differently. According to the data analysis, 50% of surveyed small pharma and biotech companies reported that competitor policies do influence how they set and maintain compensation caps.

A majority (69%) of pharmaceutical companies also heavily analyze past company experiences with HCPs when making decisions concerning compensation caps and policies. Other factors that companies consider during this process include success rates for recruiting key opinion leaders (28%) and competition for KOLs in specific therapeutic areas (33%).

"There are three key recommendations that companies should follow when working on annual compensation caps," said Jacob Presson, senior consultant at Cutting Edge Information. "These include maintaining strict adherence to established compensation caps, establishing regulatory guidelines to shape compensation cap policies, and setting compensation caps that trend upward."

The 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, details benchmarks for annual compensation limits for HCPs, both commercial and clinical caps and analyzes factors that companies use to determine annual compensation caps and policies. The research is designed to help life science executives:

  • Explore how drug and device companies manage annual compensation caps
  • Monitor 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

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Contact Information:

Elio Evangelista
Senior Director, Commercialization
Cutting Edge Information