Aggregate Spending Limits

Cutting Edge Information collected data from more than 70 life sciences companies to develop this aggregate spending analysis.  Our clients use the data and insights contained in this research to inform their decision making around thought leader compensation cap policy.
– Aggregate Spending Limit Data:
– Percentage of companies with single annual compensation caps split by activity types
– Factors in determining annual compensation limit policies
– Functions involved in approving exceptions to spending policies
– Percentage of annual compensation cap exceptions granted
– Percentage of contracted HCPs whose spending levels exceeded predetermined compensation caps

HCP compensation requires a delicate balance, as drug and device companies must not only comply with government regulations, but also avoid the perception of "buying" HCPs’ support.  One way that companies avoid this perception is by setting compensation limits, which serve as a means to ensure that no single HCP receives exorbitant compensation for performing services in a given year.  With the intense government, media and public scrutiny on physician payments by the drug and device industries, companies use these limits as one more avenue to avoid the appearance of “purchasing” HCPs’ opinions.

Biopharmaceutical and medical device executives from compliance, legal, medical affairs, marketing and other commercial teams will be most affected by changes in FMV approaches and regulations. This study is designed for key decision makers, such as vice presidents, directors and managers, from these functions.

The data clearly do not show an exponential growth trend. But more companies institute caps now than in the past. Certainly, the trend signifies the continual move by life sciences companies to combat the perception that they buy professionals’ support. Likewise, the public reporting of physician compensation in some countries drives companies to ensure that none of their payments stand out among the crowd.
Interestingly, in the 2016 data, 55% of large companies surveyed maintain caps, showing a higher propensity for the practice. As more countries move toward fair market value (FMV) requirements and reporting of compensation to HCPs, it stands to reason that compensation cap policies will continue to increase across the industry.