The Shrinking Pool - Pharmaceutical Executive

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The Shrinking Pool
How to successfully balance compliant and productive relationships with KOLs at a time when public scrutiny, changes in regulations, and pharma's negative image have the KOLs themselves concerned about industry involvement


Pharmaceutical Executive

Public scrutiny regarding the relationship between pharma companies and key opinion-leaders (KOLs) has reached a boiling point due to recent changes in various policies and regulations regarding the relationship between physcians and the industry.


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In short: it's becoming harder for pharma companies to work with physicians, and physicians are finding it harder (in some cases impossible) to work with pharmaceutical companies.

Pharma's negative public perception has caused KOLs to question whether relationships with drug makers will negatively affect their reputations. The result is that KOLs now impose their own roadblocks to building relationships.

From the industry's perspective, the roadblocks imposed by governments, trade groups, industry associations, academic institutions, and, now, physicians themselves will ultimately lead to less access to product education and, inevitably, poorer patient care.

The Shrinking KOL Pool


The Shrinking KOL Pool
The number of entities, especially academic institutions, that have increased regulations on industry–physician relationships has made forming relationships with thought leaders, and especially key opinion leaders, more difficult.

In a recent survey by Cutting Edge Information, the head of one thought leader development team at a pharmaceutical company reported having to send out three times as many advisory board invitations than usual. KOLs were declining because their academic institution no longer allowed them to participate, or they felt the need to limit their relationships with the pharmaceutical industry.


State Disclosure Laws (SOURCE (ALL CHARTS): CUTTING EDGE INFORMATION)
Prominent academic research institutions, such as Yale University and Stanford University, have begun to set standards (some more stringent than others) for relationships between faculty and drug companies.

Many of the standards encompass changes the industry has already embraced, such as limiting meals and gifts for physicians. But a common concern expressed by industry executives is that the changes in guidelines signal an even more serious trend—institutions wanting a say in their faculty's involvement in private research. This would effectively ban the relationships and effectively cut the industry off from experts in the field.


Impact of State Disclosure Laws on Thought Leader Compensation
Pharmaceutical companies bear the consequences of a smaller opinion leader-pool. Companies struggling to launch novel medicines now face the prospect of filing for approval without advice from the most expert medical professionals. And as more key opinion leaders decline to work with pharmaceutical companies, clinical and marketing teams will lack knowledge of specific patient needs and other information that helps develop better products.

Furthermore, a smaller pool creates logistical problems for thought leader management executives whose goals are based on the successful relationships that they develop. With fewer KOLs to draw from, they are forced to turn to established relationships, hiring the same thought leaders over and over again, which gives the apperance of favoritism and large compensations and only contributes to the very situation causing the current problem.

Pool Drains

But academic institutions are not the only group targeting relationships between physicians and pharma companies. Some states have imposed laws that require companies to report any payments above $25 made by drug companies to physicians. And many other states are following suit. The sheer amount of work it entails to track all the different laws and guideline changes is putting a tremendous burden on companies.

One pharmaceutical meeting planner reported that 75 percent of her staff's time is dedicated to tracking regulations for physician interactions.

Although medical affairs teams typically have more flexibility with their physician interactions compared to commercial teams (which have restrictions on paying for meals or payment thresholds for certain activities), some companies have opted to simply avoid building KOL relationships in states with restrictive spend-tracking regulations. The downside, of course, is that physicians in these states—and their patients—will start to see limited access to innovative research opportunities.

Calls for Greater Transparency

The movement within the states to require pharmaceutical companies to disclose their payments to physicians has resulted in a much-wider transparency debate. While no industry executive interviewed believed that the disclosure laws had affected their thought leader compensation strategies, the average hourly rate paid to physicians has consistently decreased each year since 2006 across companies of all sizes.

Some industry leaders proactively responded to obvious calls for more transparency around KOL relationships. Eli Lilly and Merck both announced plans to begin proactively disclosing payments to physician speakers and consultants. The announcements commenced a now growing trend toward transparency of physician payments. Although many pharmaceutical companies may not follow Lilly and Merck's examples, thought leader development executives recognize the side-by-side announcements as a potential leading indicator of the industry's future approach to thought leader relationships. Since Lilly and Merck's announcements in September 2008, Pfizer, Medtronic, and GlaxoSmithKline made similar promises to begin disclosing physician payments.

In an effort to increase transparency, PhRMA recently accepted and supported the revised Physician Payments Sunshine Act (in many cases less harsh than the state proposed legislation). Thought leader managers recognize the impact that increased transparency places on their relationships with physicians. But the pharmaceutical industry may not have a choice. According to one thought leader development executive: "We are under the microscope right now as an industry."

Although companies must begin cooperating with increased transparency demands, many KOLs adamantly oppose companies disclosing their income. Will increased transparency therefore lead to fewer physician relationships? None of the executives Cutting Edge Information interviewed indicated that that had begun to happen due to payment disclosures. But the fact is that increased transparency already has begun at the state level, and most companies have started developing strategies to work within those new changes.

The pharmaceutical industry recognizes the need for some level of regulation and transparency. Thought leader advocacy rests upon a physician's credibility. Physicians deriving large percentages of their incomes from industry-related activities will inevitably damage their credibility. Relationships with these physicians benefit neither the pharmaceutical industry nor the patients.

Unintended Consequences

Concern is growing in the industry that the full extent of these changes will irreparably damage relationships with key opinion leaders. Data suggests that the industry already has been significantly cut off from many within the thought leader pool. According to an annual survey conducted by Cutting Edge Information, large pharmaceutical companies saw a 26 percent decrease in the number of thought leader relationships over a two-year period. And according to participant responses, large pharmaceutical companies maintained an average 2,029 thought leader relationships in 2007 and only 1,502 in 2008.

Most of the legislative action is directed at curbing abuses in industry-physician relationships and improving long-term patient care. But as more and more regulations and policy changes erode the relationships between physicians and drug makers, it only figures that new research and development will take a hit.

Elio Evangelista is a research team leader at Cutting Edge Information. He can be reached at

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