Physician Fee Schedule Rates Drop by 50%
Average physician fee schedules for hourly payments to KOLs have fallen each year since 2006, finds Cutting Edge Information
Drug and device manufacturers have responded to criticism over physician payments by decreasing their average level of compensation by 50 percent, according to our new study of fair-market value benchmarks. In 2006, the average hourly rate for a top-tier opinion leader – an experienced physician often considered a national- or global-level thought leader – was $604. Since then, drug and device manufacturers have faced public criticism about conflicts of interest, as well as state and federal legislation to regulate physician payments. Cutting Edge Information’s latest thought leader study finds that in 2011, the average hourly rate for medical and scientific activities has dropped to $299, or roughly 50% of what it was in 2006.
According to the study, the largest drop in hourly rates came between 2007, when the average rate was just under $600 per hour, and 2008, when the rate fell to less than $400 per hour. Senator Charles Grassley (R-Iowa) first introduced the Sunshine Act legislation in Congress in September 2007. “Although there is no direct causation between the introduction of Sunshine Act legislation and the decrease in rates, there is certainly a strong correlation,” said Elio Evangelista, director of research at Cutting Edge Information. “And as companies have continued to implement new processes and increased structure around fair-market value determination, physician payment rates have continued to drop.”
The new study, “KOL Fair-Market Value and Aggregate Spend: Documentation, Tracking and the Sunshine Act,” analyzes the fair-market value (FMV) data of more than 30 drug and device manufacturers to benchmark physician fee schedules. The findings include thousands of FMV benchmarks for cardiologists, neurologists, oncologists, primary care physicians and more. A growing number of drug and device companies, such as Pfizer, Medtronic and Johnson and Johnson, have voluntarily disclosed their physician fee schedules over the last two years. Cutting Edge Information’s study found that these voluntary disclosures have impacted the level of compensation that key opinion leaders receive. Many thought leaders are choosing to lower their rates or opting out of working with the industry altogether.
“KOL Fair-Market Value and Aggregate Spend: Documentation, Tracking and the Sunshine Act” is available at http://www.cuttingedgeinfo.com/research/medical-affairs/thought-leader-fmv/ .
To learn more about Cutting Edge Information’s fair market value data services, download the FMVConnect brochure here.