June 1, 2010

Pharmaceutical and medical device companies’ financial relationships with physicians are a large and growing focus of OIG and DOJ enforcement activity, which makes it more important than ever to ensure that these arrangements can withstand critical examination. In his article Defending Fair Market Value (FMV) Assessments published June 28, 2010 in Pharmaceutical Commerce author Stephen Rothenberg, J.D., Business Analyst, discusses the need for companies to go beyond developing basic fee schedules for hiring consultants.

Determining fair market value (FMV) fees is difficult, and little practical guidance is available. Finding a defensible way to value the specialized services physicians provide as speakers, advisory board members, clinical researchers, etc. is central — but not the whole answer to the FMV challenge. Companies must also focus on consistency of practice across business and functional groups, ensuring transparency, and the broader framework for handling consultative relationships with providers. The author provides guidance on how to structure defensible fee determinations, and how to ensure that your broader FMV framework can stand up to the heightened scrutiny that is part of today’s compliance environment.