Streamlining FMV compliance: Automating KOL tiering in pharma consulting
Learn how Baker Tilly helped a top global pharmaceutical company determine key opinion leader (KOL) tiers across different regions in which they operate using a novel automated tiering database.
Client background
A top 25 global pharmaceutical company that operates in almost every region in the world.
The business challenge
To comply with anti-kickback and anti-bribery regulations, life sciences companies must determine accurate fair market value (FMV) rates when engaging with KOLs for consulting activities. To do so, companies typically leverage tiers of expertise to determine an appropriate hourly FMV rate.
Since the company operates in different markets across the globe, they engage with a high number of healthcare professionals (HCPs) and non-HCPs in a variety of settings with each needing to be tiered to determine their level of expertise and FMV rate.
This presented a challenge for the company due to the high volume of HCP and non-HCP interactions resulting in a time consuming, resource intensive tiering process at risk for bias and human error. They engaged Baker Tilly to implement our automated tiering database kolNOW® that provides pre-tiered KOLs based on objective, defensible, consistently applied criteria. and non-HCP interactions resulting in a time consuming, resource intensive tiering process at risk for bias and human error.
Baker Tilly’s solution-driven approach
Baker Tilly performed a thorough tiering comparison of the company’s 2023 KOL population in order to establish change management recommendations and decision points regarding tiering and FMV rates including:
- Tiering and FMV rate comparison for company selected KOLs
- Tiering comparison of random sampling of 35% of global KOLs
- Coverage analysis of 100% of KOLs
The accomplished results
Overall, >70% of the company’s KOL population were present in the global kolNOW database. Additionally, our tiering and FMV rate comparison analysis of company selected KOLs indicated the following:
- 74% showed an increase in their hourly compensation rate
- 72% were tiered at a higher tier or had no change to their tier level assignment
- 28% showed an initial decrease in tier level assignment
After thorough review of each KOL that presented an initial lower tier level, we concluded that the decreases in tier level assignment were primarily due to increased objectivity in tier and specialty assignments using kolNOW. We also identified specific examples of incorrect specialty assignments, outdated tiering evaluations and subjective tier assignments lacking supporting documentation.
In addition to providing access to kolNOW, Baker Tilly provided detailed change management recommendations and supporting materials for those KOLs whose FMV rates decreased as a result of down tiering or specialty change.
For more information on this topic or to learn more about our compliance and ethics solutions for life science companies, connect with us today.