An emerging biopharmaceutical company that serves patients with serious, rare and life threating diseases. The client had a robust pipeline and worked with several healthcare professionals (HCP) on consulting engagements to support the scientific discovery as well as the research and development of their products.
Life sciences companies are required to establish fair market value (FMV) rates and tiering methodology through an FMV program assessment when engaging with HCPs on consulting engagements. The regulations that govern these rules in the U.S. and globally – including the Anti-Kickback Statue, False Claims Act, Foreign Corrupt Practices Act, U.K. Bribery Act and Sunshine Act – are important to ensure that ethical practices are established throughout the life sciences industry and to act as a key driver for compliance operations.
Due to the emerging nature of the client, the company needed a trusted business advisor who could take a holistic view of their current FMV program, including the fundamental elements of their FMV hourly rate calculations, the criteria to determine physician/non-physician expertise, the activity/event model and travel-time compensations.
Baker Tilly worked with the client to develop their FMV program by implementing a propriety, self-service application – called fmvNOW – and provided additional advisory support. With the help of fmvNOW, the client was provided direct access to FMV rates across key opinion leader (KOL) payment tiers. This also provided recommended activity fees based on standard activities seen across the life sciences industry.
By utilizing a cost build-up approach to calculate FMV hourly rates, fmvNOW was able to determine appropriate FMV rates for HCPs that were located outside of the U.S. Baker Tilly consultants also worked with company leaders to determine the physician specialty areas and the countries included in the FMV assessment scope.
An FMV assessment report was also provided through fmvNOW, which detailed the calculation methodology, FMV hourly rates and activity model assumptions. This FMV assessment report also served as a document of defense for certain inquiries from regulatory agencies related to HCP consulting payments.
By implementing the fmvNOW application, the company was able to efficiently and compliantly establish their FMV program. They were also able to conveniently review rates and reports from an easy-to-use dashboard view, including through Excel and PDF exports.