Flat Fee Most Common KOL Compensation Method in Europe
Honoraria and hourly reimbursement are other prominent models
As scrutiny over key opinion leader (KOL) payments intensifies in Europe, life sciences companies set fee schedules and establish protocol to ensure fair-market value (FMV). Our recent research show that the most common method of payment for European thought leaders is flat fee. Payment by flat fee accounted for 45% of all data points compiled for “Determining European KOL Compensation: Fair-Market Value Benchmarks,” followed by honoraria (35%) and hourly compensation (20%).
Preferences differ when the data are broken out by company size, with large pharmaceutical companies clearly preferring flat rates whereas small companies opt for hourly payments. Offering high hourly payments can help small companies compete against larger companies in attracting thought leaders. “Some companies may find that flat fees are easier to justify and keep track of than hourly payments,” said Elio Evangelista, director of research at Cutting Edge Information. “Regardless of payment method, however, companies must pay consistent fees to maintain compliance while still being able to attract top-tier thought leaders.”
The data also show the range of payments by company size. Mid-sized companies surveyed showed the highest average flat fee payment at €1,278. By comparison, small companies in the study averaged only €800 – but showed the single highest payment among all company types, at €2,000. The wide range in flat fee payments reflects the variety of KOL activities and thought leader types – some who demand higher compensation than others. “This aggregated data show us trends in European FMV,” Evangelista said. “Our study finds that scrutiny over physician payments is a global concern, and Europe is following the US in disclosure policies.”
“Determining European KOL Compensation: Fair-Market Value Benchmarks” is designed to help thought leader management teams understand the current trends affecting European physician compensation and to determine KOL fair-market value. Developed from the input of 21 life sciences companies, it compares FMV benchmarking data across company sizes and types, therapeutic areas and thought leader categories and activities. The study focused on goals identified by medical affairs executives, including:
- Avoid overpaying or underpaying thought leaders for specific activities.
- Use benchmarking data to determine appropriate spending levels.
- Understand payment ranges made to European thought leaders to attract top-tier KOLs.