Article

Automating the traditional KOL tiering process for life sciences companies 

How current tiering processes have failed and how innovation may solve this quandary  

Aug. 23, 2024 · Authored by Darren R. Jones, Mark Scallon, Casey Armstrong

Life sciences companies regularly engage key opinion leaders (KOLs) – including physicians, nurses, scientists and patients – for consulting and advisory services. KOLs are critical partners in the life sciences industry for providing key insights and expertise. The industry, however, continues to face severe regulatory enforcement and fines related to payments to these KOLs. In fact, year-over-year, the U.S. Department of Justice (DOJ) has recovered millions of dollars in settlements due to violations of the Anti-Kickback Statute, Stark Law and False Claims Act. A frequent violation cited in these settlements is the compensation of KOLs for services in excess of fair market value (FMV), thus constituting a kickback or inducement, whether the overpayment was intentional or not. 

 In order to avoid overpayment to KOLs, companies must create a FMV rate card dictating the rate KOLs should be paid based on their level of expertise. The level of expertise is set by tiering, a process of evaluating the KOL’s experience and specialization against a standard set of criteria. Tiering has always been a tedious undertaking, and both the current and traditional tiering process continues to fail the life sciences industry and hampers the ability of using automation to solve the problem.  

Inherent challenges to the manual tiering process 

The traditional approach to tiering employed by the life sciences industry has been a manual process. It requires a human being to review a KOL’s curriculum vitae (CV) and pick out key accomplishments and experiences. This has inherent challenges and limitations, including: 

1. Time intensive 

Manual tiering is tedious and a time-intensive process, especially when a KOL’s CV is dozens of pages long. Attempts to shorten the duration of a manual tier often result in inaccurate tiering outputs as many key details may be missed.  

2. Costly 

Not only is tiering time intensive, but it requires highly skilled labor to accurately review and digest the CV. When handled in-house, tiering is usually owned by the medical affairs function, which keeps personnel with advanced degrees from performing other more meaningful work.  Furthermore, tiering is costly, even when outsourced to a third-party vendor. Standard outsourcing solutions are still manual and charge a premium for reviewing CVs, which may take budget dollars away from other more strategic projects within the company.