Navigating in a Changing Landscape

The Top 6 Challenges for Thought Leader Development Teams

1000 Park Forty Plaza, Suite 440 Durham, NC 27701 www.cuttingedgeinfo.com

Presented by:

Elio EvangelistaResearch Manager

About Cutting Edge Information

Focus on conducting high-quality, implementable real-company consulting and training for the pharmaceutical

industry.

Founded by consultants with extensive experience

conducting pharmaceutical research studies for high-level

clients.

Services include:

• Research reports for decision support

• Customized research

• Capabilities assessments

• Executive presentations

Founded in 2002 to provide benchmarking and competitive

intelligence services

Our History with KOL Research

Key opinion leader development benchmarking and analysis

has been a cornerstone of our research library since Cutting

Edge Information’s earliest days:

Relationship management

Topics covered:

Identification and segmentation

Compensation

KOL targeting

Department resources

Strategy development

Conflicts of Interest

Major events affecting Pharma’s relationship with opinion

leaders:

State reporting laws

The Sunshine Act

New PhRMA code

ACCME policy changes

Journal publication requirements

Fair-market value compensation

Fewer KOLs Available

Academic institution restrictions

Thought Leader Fair-Market Value KOL Relationship Management

Our Recent Studies

The Top 6 Challenges

Greater Transparency1

The Shrinking KOL Pool6

Establishing Fair-Market Value Procedures2

State Disclosure Laws 3

Stringent Journal Requirements4

ACCME Restrictions5

Challenge 1: Greater Transparency

All meetings with consultants relate to the

consulting services outlined in the contract

The following factors support the existence of a bona fide

consulting arrangement (not all factors may be relevant to any

particular arrangement):

A written contract of the consulting services and basis for

payment

A legitimate need for the consulting services identified in

advance

Consultants meet pre-existing criteria and have the

necessary expertise

A reasonable number or healthcare professionals retained

The company maintains records of the services rendered

Challenge 1: Greater Transparency

New compensation strategies are the next step for the

industry.

Greater reliance on fee schedules

Integrated compensation approach

Public disclosures

Physician spend tracking

Challenge 1: Greater Transparency

No more gifting

Challenge 2: Establishing FMV Procedures

“We are under the

microscope right now as an

industry.”

- Interviewed Thought Leader

Management Executive

Incorporate these steps in your FMV process:

Work with your compliance team

Start with annual salary data

Gather FMV benchmarks

Incorporate qualitative research to add context to FMV data

Develop a codified fee schedule

Tie fee schedules to segmentation data

Challenge 2: Establishing FMV Procedures

Gathering FMV benchmarks:

• 300+ data tables of FMV benchmarks

• 19 therapeutic areas

• Fair market value compensation for:

• Expert-in-Field

• Specialist

• Subspecialist

• Surgeon

• Primary Care Physician

• Allied Health Professional

• Family/General Practitioner

• Physician Assistant

• Internal Medicine

• Nurse

• Nurse Practitioner

• OB/GYN

• Pediatrician

• Certified Diabetes Educator

• Dietician

• Professional Healthcare Educator

• Social Worker

Challenge 2: Establishing FMV Procedures

Annual salary data:

Specialty Starting† All Physicians† Hourly Rate*

Cardiology $270,700 $379,975 $104 to $146

Dermatology $230,000 $344,847 $88 to $133

Endocrinology $160,000 $205,497 $62 to $79

Gastroenterology $270,000 $374,674 $104 to $144

Neurology $395,000 $581,258 $113 to $224

Urology $250,450 $383,029 $96 to $147

†Source: American Medical Group Association (AMGA)

* - Based on a 50-hour work week

Challenge 2: Establishing FMV Procedures

Challenge 2: Establishing FMV Procedures

Annual salary data vs. FMV benchmarks:

Specialty Hourly Rate* Median FMV Hourly Rate

Cardiology $104 to $146 $217

Dermatology $88 to $133 $235

Endocrinology $62 to $79 $263

Gastroenterology $104 to $144 $316

Neurology $113 to $224 $254

Urology $96 to $147 $228

Influential factors for segmenting thought leaders:

Challenge 2: Establishing FMV Procedures

Challenge 3: State Disclosure Laws

States with laws regulating physician spending

States that have proposed laws on physician disclosures

Challenge 3: State Disclosure Laws

The impact on thought leader compensation:

$343

$472 $441

$364 $381

$395

$271 $276 $310

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

Large Mid-Sized Small

2006

2007

2008

Company Size

Ave

rag

e H

ou

rly

Ra

te

Companies are avoiding thought leader relationships

with physicians in states with complex spend tracking

laws.

Many pharmaceutical and biotechnology companies

now support passage of the federal Physician

Payments Sunshine Act, introduced by US Senators Charles Grassley and Herbert Kohl.

The rash of state regulations has prompted some common

responses:

Monitoring changes in these states’ laws has created a

burden of extra work at pharmaceutical companies.

Challenge 3: State Disclosure Laws

The impact on thought leader management teams:

State disclosure laws have not had a great

impact on KOL relationships … yet

State disclosure laws have led to better

documentation systems

Challenge 3: State Disclosure Laws

Challenge 4: Stringent Journal Requirements

“For industry-sponsored studies, an analysis of the data

(based on the entire raw data set and evaluation of the

study protocol, and prespecified plan for data analysis)

must be conducted by an independent statistician at an

academic institution, rather than by statisticians employed

by the sponsor or by a commercial contract research

organization.”

- JAMA Instructions for Authors

Challenge 5: ACCME Restrictions

Standards to Ensure Independence in CME Activities:

The provider must be able to show that everyone who is in a position to control the content of an education

activity has disclosed all relevant financial

relationships with any commercial interest to the

provider.

2.1

Presentations must give a balanced view of

therapeutic options. Use of generic names will

contribute to this impartiality.

5.2

The provider must make all decisions regarding the

disposition and disbursement of commercial support.3.1

Challenge 6: The Shrinking KOL Pool

Challenge 6: The Shrinking KOL Pool

2029

1502

0

500

1000

1500

2000

2500

2007 2008

Average Number of Thought Leader Relationships at Large Companies

Provide top-notch opportunities

Challenge 6: The Shrinking KOL Pool

Research

Innovation

Exposure

Development

1000 Park Forty Plaza, Suite 440

Durham, NC 27701

www.cuttingedgeinfo.com

Presented by:

Elio Evangelista

Research ManagerCutting Edge Informationelio_evangelista@cuttingedgeinfo.comp. +1 919.403.6583