Fair Market Value Benchmarking And Analysis Brochure

www.cuttingedgeinfo.com

Fair-Market Value
Benchmarking and Analysis
A Cutting Edge Information Customized Solution

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The federal Physician Payment Sunshine Act requires life sciences companies to gather their
spending data on physicians starting January 1, 2012, with the first official report due to Health
and Human Services by March 2013.

The need to accurately document financial relationships with physicians is imminent and
failure to comply with the Act will lead to significant penalties.

1000 Park Forty Plaza, Suite 440 Durham, NC 27713 www.cuttingedgeinfo.com/

FAIR-MARKET VALUE BENCHMARKING

In recent years, there has been much debate over payments to KOLs who participate on
speaker bureau faculties, write medical publications, work on clinical research, sit on
advisory panels or perform any number of other consulting activities. In the US, state and
federal regulators have increasingly scrutinized physician fee schedules ever since FMV
terminology was first applied to these KOL consulting and advisory relationships. Similar
guidelines are being developed worldwide. A few months ago, the UK’s Association of the
British Pharmaceutical Industry recently produced a code of practice calling for reasonable
fee schedules. In June 2011, India’s Department of Pharmaceuticals developed a 14-page
document, titled Voluntary Code, restricting gifts to physicians.

It may seem that there is plenty of time to capture and organize physician payment data
to meet the requirements of the Sunshine Act and other guidelines, but companies that
have not begun to publicly disclose these payments have a lot of work ahead. They should
consider formalizing this daunting process as soon as possible to allow for the design and
implementation of sound fee schedules, based on reliable fair-market value information.
Accurate and comprehensive fair-market value data provide a strong level of protection
against compliance violations.

Copyright  Cutting Edge Information


Make CEI Your Primary Provider of KOL
Fair-Market Value Benchmarks
Cutting Edge Information is a leading primary research service provider for pharmaceutical,
biotechnology and medical device companies. Our experience in key opinion leader
management and compensation research is extensive and a cornerstone of our business.

More than 100 life sciences companies have used Cutting Edge Information’s research to
craft strategies to build key opinion leader relationships and establish top-notch FMV fee
schedules. Our team of consultants has worked with thought leader development and
medical affairs executives since the company’s inception, in 2002. We’ve developed a
time-tested methodology for identifying and segmenting thought leader candidates and
determining fair-market value for specific activities.

We are at the forefront in the industry in providing unique KOL compensation data
services. Our KOL FMV benchmarking and analysis service places real-world metrics and
benchmarks in your hands so you can make informed decisions. It will enable you to:

• Implement an FMV fee schedule based on detailed KOL compensation
benchmarks
• Establish sound consultant and advisor payment practices
• Receive a customized data set based on your company’s specific needs:
• Country or region-specific data
• Therapeutic area data
• Company size data
• Thought leader category data

Our contact network contains KOL program leaders from hundreds of large, medium
and small pharmaceutical, biotech and medical device companies. Through ongoing
interactions with industry executives, we measure the pulse on industry best practices in
KOL program design and fair-market value of thought leaders.

CEI is ideally positioned to segment and establish FMV data for thought leaders, as
well as serve as a partner in building KOL management programs. We’ve studied KOL
management from diverse angles, giving us an unmatched set of skills in this area. Our
experience in primary research — and our ability to quickly conduct additional research —
are critical to finding the information necessary to achieve compliant, tailor-made physician
fee schedules.



Flexible, Customized Fair-Market Value
Compensation Solutions
Our customized solutions service offers you the greatest flexibility possible in terms of
project design, scope, deliverable timeline, and budget. You have total freedom to select the
KOL compensation benchmarks you need.

Our FMV data can be segmented to account for a number of criteria, including the following:

• Region or country (see details on page 5) • Company size by revenue
• Five regions • Top 25 pharma
• 105 countries • Top 50 pharma
• Top 100 pharma and biotech
• Specialty areas (see details on page 6) • Medical device and diagnostic companies
• 35 therapeutic areas • Other

• KOL type • Activity/service type
• Specialists • Commercial consulting
• Subspecialists • Clinical consulting
• Primary care physicians • Promotional and educational speeches
• Mid-level providers • Advisory board leadership and participation
• Allied health professionals • Other activities

• Specific specialist titles • Payment details
• Cardiologists • Hourly rates
• Endocrinologists • Flat fees
• Hematologists • Average and median amounts
• Oncologists • Minimum and maximum payments
• And 40 other titles



Overview: Global Sample and Data Depth

We have compensation data for the following countries:
Afghanistan Chile India The Netherlands Spain
Albania China Indonesia New Zealand Sweden
Algeria Columbia Iran Nicaragua Switzerland
Andorra Costa Rica Ireland Norway Syria
Argentina Croatia Israel Oman Taiwan
Armenia Cyprus Italy Pakistan Thailand
Australia Czech Republic Ivory Coast Panama Tunisia
Austria Denmark Japan Paraguay Turkey
Azerbaijan Dominican Republic Jordan Peru Ukraine
Bahrain Ecuador Kazakhstan Philippines United Arab
Baltic States Egypt Kuwait Poland Emirates
Bangladesh El Salvador Latvia Portugal United Kingdom
Belarus Estonia Lebanon Qatar United States
Belgium Finland Liechtenstein Romania Uruguay
Bhutan France Lithuania Russia Uzbekistan
Bolivia Georgia Luxembourg Saudi Arabia Venezuela
Bosnia Germany Macedonia Senegal Vietnam
Herzegovina Greece Malaysia Serbia Yemen
Brazil Guatemala Malta Singapore
Brunei Honduras Mexico Slovakia
Bulgaria Hong Kong Moldova Slovenia
Cambodia Hungary Montenegro South Africa
Canada Iceland Morocco South Korea



Compensation data are available for these therapeutic areas:

Allergy Nephrology Pediatrics
Anesthesiology Neurology Preventive Medicine
Cardiology Oncology Psychiatry
Dentistry Ophthalmology Pulmonary Diseases
Dermatology Optometry Radiology (Diagnostic)
Endocrinology Orthodontics Rheumatology
Family Medicine Orthopedics Surgery
Gastroenterology Otolaryngology Urology
Hematology Pain Management
Immunology Pathology



Methodology
Cutting Edge Information’s methodology for collecting and calculating FMV benchmarks
incorporates the differences inherent in working with a number of KOLs across different
geographies and different specialty areas. It combines statistical analysis with standard
benchmarking methodologies.

Cutting Edge Information has developed the most extensive and comprehensive database
of FMV data available today. The FMV information we provide for our clients is based on
our unique approach to primary research. This process for collecting and analyzing FMV
data and related compliance information encompasses two distinct tools: quantitative
surveys and qualitative interviews. Both tools provide necessary information for analysts
to understand not only the FMV benchmarks that we provide to our clients, but also the
reasoning behind the fee schedules that we collect.

Quantitative Surveys
Our in-house team of consultant experts and research analysts has developed — and
continue to refine — our quantitative survey tool. The survey tool’s evolution was based on
years of researching FMV processes and working closely with life sciences executives and
key opinion leaders themselves to understand the inner workings of compensating KOLs
for their services while adhering to regulatory guidelines worldwide and industry standards.
Since Cutting Edge Information began studying fair-market value compensation, dozens
of executives from pharmaceutical, biotechnology and medical device companies have
contributed advice and guidance for developing the survey questions used to collect our
data.

In the latest iteration of our research, we made several key adjustments to our survey tool
in response to the industry’s changing practices and needs. One of these key changes
was to refine the mid-level provider and allied health professional categories to include
payments to physician assistants, nurse practitioners, nurses, pharmacists and a host of
other healthcare professionals who were previously unaccounted for. This adjustment is a
reflection of the greater prevalence of allied health professionals providing consultancy and
advisory services to the life sciences industry today.

Our FMV data are collected from pharmaceutical, biotechnology, medical device and
diagnostics companies directly, as well as from third-party providers and healthcare
consultants that either act as intermediaries between companies and KOLs, or pay KOLs
on behalf of companies for specific services/activities. Additionally, we collect data directly
from KOLs. Altogether, Cutting Edge Information collected more than 2,000 data sets from
therapeutic area heads, vice presidents and senior directors of medical affairs departments,
clinical development organizations, marketing teams, and a host of compliance officers and
legal departments, as well as from KOLs themselves.



Data Verification
After the research team has collected the data, analysts verify each data set to ensure its
accuracy and direct comparability with all other data collected. To verify the information,
Cutting Edge Information uses two approaches. The initial step is to run statistical analysis
on the data. After calculating the mean and median, analysts use the normal distribution of
data points to identify outliers. In this process, some outliers are immediately flagged, and
those whole data sets are set aside. Other outliers can be explained by cross-referencing
the data points against other information collected within the survey. For example, a
payment that is 2.5 standard deviations from the mean may be explained if the specialty
area in question is a rare disease or requires a certain level of expertise with a small pool
of subspecialists. Data sets that are flagged as outliers or that are deemed questionable
undergo a second type of verification: in-depth discussion and analysis with the survey
respondent. This approach often identifies a unique context surrounding a company’s KOL
payments. When a data set or single data point are verified as a true outlier (often due to
extenuating circumstances), Cutting Edge Information removes these data from the analysis
in order to avoid outlier bias. In other cases, the clarity that respondents provide in these
discussions is useful to retain the data points in the overall data set.

Qualitative Interviews
In addition to the survey and data verification processes, to uncover more detailed
information, our research and consulting teams conduct in-depth interviews with survey
respondents. These telephone interviews provide greater insight and context not only for the
data submitted on the survey, but also for the trends impacting the data itself. For example,
one company’s data may be very different from another’s if one company has reacted to a
new regulation. These insights are distilled and presented in our off-the-shelf FMV reports,
which are available for purchase in addition to the customized solutions presented in this
brochure.



Deliverable Format and Pricing
Our custom deliverables are typically presented in a table format as a PDF document file.
(Other formats are available upon request.) Each category, or “slice,” of data generally
includes the industry minimum payment, maximum payment, average payment, and
median payment for that given payment type.

Client needs range from a few data points to complete solutions; therefore, every project is
evaluated separately and project deliverables are designed to accommodate every budget.

Contact Information
Chris Inks
Account Manager
Durham, NC: +1 919-433-0210
chris_inks@cuttingedgeinfo.com


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