Navigating the complexities of fair market value assessments 

Determining fair market value (FMV) for healthcare professionals (HCPs) presents unique challenges for the life sciences industry. As the regulatory landscapes shift and global engagement grows, companies must prioritize accurate, data-driven FMV assessments to uphold compliance and ensure equitable compensation. 

Compensation rates that reflect reasonable and customary payments for HCP services are essential for determining FMV. This is vital to ensure that companies meet compliance requirements, avoid regulatory scrutiny and maintain ethical standards. Errors in FMV calculations can result in potential overpayment or underpayment, impacting compliance. 

Key challenges in determining FMV 

Life sciences companies often face various challenges when navigating FMV assessments, including: 

• Limited data availability: One of the main hurdles in establishing accurate FMV is the availability and quality of data. Companies may struggle to gather comprehensive, up-to-date information on HCP qualifications and compensation benchmarks, particularly in specialized or rare disease states. 
• Manual tiering and inconsistencies: The traditional process of manually reviewing curriculum vitae (CVs) and assigning tiers to HCPs is time consuming and prone to human error. This process can lead to inconsistencies and potential biases, especially when conducted by medical or compliance professionals who may have limited resources. 
• Cross-border transactions: Different countries have diverse regulatory frameworks that dictate FMV rates, leading to potential complications in global engagements. Factors such as currency fluctuations, regional cost of living differences and local healthcare standards add to the complexity of these assessments. 

Considerations in the FMV calculation process 

Effective FMV assessments require life sciences companies to consider a range of key factors: 

• Specialization and expertise: HCPs with specialized knowledge often warrant higher rates due to their expertise. Accurately evaluating these qualifications is crucial for fair compensation. However, these experts may not always have detailed or updated CVs, posing additional challenges for tiering and FMV determination.