Increasingly, Life Sciences companies are realizing there is a broader value to FMV determinations that can be leveraged beyond the compliance department.
Historically, the compliance team conducted FMV analyses and calculations as they oversaw the appropriateness of HCP engagements. However, the insights derived from FMV analyses not only benefit the compliance department but also the business itself.
As such, the Polaris team has observed a trend towards more business units overseeing FMV analysis. This shift in ownership allows the business to better plan its budget and understand its HCP engagement process.
Developing a robust FMV methodology requires the business to examine its entire HCP engagement process. This initial phase sheds light on the company’s practices and the rationale behind them. For example, a commercial team may ask themselves why a certain HCP has been hired more frequently than any other HCP in a given year, or why a top KOL from abroad was hired for a standard speaker program that did not require his/her expertise. This self-assessment not only fosters process improvements that stem from FMV analysis, but also raises awareness about budget implications stemming from changes to FMV rates.
A robust FMV methodology also allows the business stakeholders to narrowly define specialties and further examine the sub-specialties. Calculating FMV rates for these sub-specialties can be quite challenging due to limited objective data, and consequently calls for a more creative approach that utilizes other quantitative and qualitative measures. An effective tiering model that accounts for a HCP’s highly specialized experience in employment, research or publications, for example, captures these qualitative measures which are generally not represented in standard FMV rates. By standardizing FMV compensation by activity and specialty, the business has more budgeting predictability, and can accurately forecast the impact of a marginal change in FMV rates on individual brand spending.
Increasingly, Polaris’ clients are recognizing the numerous benefits of having a robust FMV methodology. Business units can gain valuable insights into the predictability and transparency in the HCP relationship by examining their activity fees. We are also seeing more companies performing predictive analytics using their budget data as well as historical data. Essentially, companies are developing a budget impact model based on FMV and other data analytics such as aggregate spend.
With more direct business involvement in FMV analysis and methodology development, FMV analysis is increasingly becoming a business tool while still serving as one for compliance. Polaris’ experts have seen increased interest in this space by the Life Sciences industry and we are developing a new offering based on our subject matter expertise. For more information on how Polaris can support your FMV development, please contact the Polaris FMV SME team.