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
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
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 email@example.com