December 9, 2024
Jerry Arbittier
In the late 20th century, there was increasing concern about how pharmaceutical companies, medical device makers, and other healthcare-related businesses were working with doctors and other healthcare professionals. As these companies started paying physicians for participation in research, there were worries that these payments might influence doctors’ decisions in ways that weren’t in the best interest of patients. Specifically, it raised questions about whether doctors were being swayed to prescribe certain drugs or recommend certain treatments because of financial incentives, rather than making decisions based purely on what was best for the patient.
… Fair Market Value (FMV), which is a way to define reasonable compensation for doctors when they’re paid for services like consulting, research, or speaking.
To address these concerns, both regulators (like government agencies) and industry groups (like medical associations) began setting rules and guidelines to make sure these financial interactions between doctors and companies were fair and transparent. One key part of this was the concept of Fair Market Value (FMV), which is a way to define reasonable compensation for doctors when they’re paid for services like consulting, research, or speaking. By setting clear FMV standards, the goal was to make sure that these payments were not excessive or designed to improperly influence doctors’ behavior, but were instead based on what the services were actually worth in the marketplace.
To make sure doctors are fairly paid without being influenced by industry, several professional organizations created guidelines to set appropriate payments for physicians. These guidelines help prevent bias in research and ensure ethical interactions between doctors and companies. Some key organizations that include Fair Market Value (FMV) in their ethical codes are:
PhRMA
(Pharmaceutical Research and Manufacturers of America), which represents medical technology companies.
AdvaMed
which has a Code of Ethics for interactions between healthcare professionals and the medical device industry.
EFPIA
(European Federation of Pharmaceutical Industries and Associations), which sets standards for the pharmaceutical industry in Europe.
Institutional Review Boards
(IRBs), which regulate research involving human subjects to ensure ethical practices.
In the U.S., while the FDA (Food and Drug Administration) doesn’t set specific FMV guidelines, it does oversee the marketing and promotional activities of pharmaceutical and medical device companies.
Overall, these organizations and regulations aim to protect both physicians and patients by making sure that payments to doctors are reasonable and that industry relationships remain transparent and ethical.
Market research needs flexibility to offer honoraria that entice the correct and quality respondents’ participation to deliver quality results and insights to our clients.
Even though FMV is a suggested guideline, market researchers face strong opposition from client legal and accounting teams to paying any honorarium different than FMV for a given research methodology with a selected specialty. So, is FMV the best way to compensate physicians for participating in market research?
In market research with physicians and other healthcare professionals, FMV can sometimes present challenges and limitations that may impede the research process and resulting data quality. In general, if the qualified healthcare professional perceives the FMV honorarium as insufficient or not commensurate with the time and expertise required, they may choose not to participate in the research. As honorariums are supposed to ensure an appropriate response rate, this lack of participation could severely handicap the completion of the study. Alternatively, you may collect lower-quality data if your sample does not represent the entire specialty. Similarly, suppose your qualified physician is a `very high-performing doctor in their specialty. How likely will they participate with an honorarium based on the industry average compensation?
A better way to compensate Physicians fairly? Here are my thoughts…
Market research needs flexibility to offer honoraria that entice the correct and quality respondents’ participation to deliver quality results and insights to our clients. Since participation in market research does not influence physician behavior, why don’t we just follow the rules of Supply and Demand? Not all physicians are equally qualified, so we can’t assume they all will be attracted to the FMV honoraria?
The sunshine act, also talks about ensuring transparency and disclosure. Payments to physicians for market research, speaking engagements, or consulting must be disclosed under the Sunshine Act. This ensures transparency, allowing the public to see how industry relationships may influence medical decision–making.
This ensures that any bonus or additional payment made to a physician or healthcare provider does not create a conflict of interest or incentivize favoritism toward a particular product. Moreover, if a physician’s expertise is needed for a high-priority project, such as driving innovation in the medical field, compensating them fairly for their time and knowledge helps ensure the quality and reliability of the data collected. Such compensation is permissible under the Sunshine Act as consulting fees, provided it is appropriately disclosed, ensuring transparency and preventing undue influence on clinical or business decisions. In marketing research studies conducted online, the identity of the study sponsor is typically kept confidential. In fact, maintaining this confidentiality is crucial for ensuring unbiased, meaningful results. However, this practice raises important questions:
1. Is the establishment of fair market value (FMV) guidelines for survey compensation considered price-fixing?
Given that the sponsor of the survey is anonymous, does setting standardized compensation amounts for survey participation amount to manipulating the market?
2. Do pharmaceutical companies, with their financial and legal departments often driving the setting of FMV guidelines, exert undue pressure on marketing research firms?
In such cases, could this pressure create a de facto form of price-fixing, where firms are effectively compelled to comply with set compensation rates?
3. Are pharmaceutical trade associations that advocate for FMV guidelines contributing to a price-fixing environment?
By promoting standardized compensation rates across the industry, do these associations inadvertently facilitate a system that undermines market competition?
Summary
Overall, while fair market value principles serve critical purposes in ensuring transparency, fairness, and ethical conduct in physician-industry interactions, overly rigid adherence to FMV guidelines in the context of market research may inadvertently hinder the quality, breadth, and impact of research initiatives. In fact, given that marketing research surveys are anonymous, there is not a need for setting these guidelines and the act of having pharmaceutical companies promoting fair market value guidelines is a form of Price Fixing. Striking the right balance between compensation considerations and the need for robust, insightful research findings is essential to maximizing the effectiveness and value of market research involving physicians and healthcare professionals. Paying honorarium using the rules of Supply and Demand, in line with legalities that exist, can be possible.
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Want more market research best practices information?
Contact us at jerry.arbittier@aops.us or 917-327-0533.