By Fusionhcf 
March 28, 2024

Why ‘Fair Market Value’ Hurts Healthcare Market Research

The emphasis on Fair Market Value, or FMV, in physician payments for marketing and research started in the late 20th century amid growing concerns about conflicts of interest, undue influence, and a lack of transparency in physician-industry relations. As pharmaceutical and medical device companies increasingly engaged in marketing and research activities with healthcare professionals, regulators and industry organizations developed guidelines and standards to ensure interactions were conducted ethically and transparently.

How Did FMV Become Widely Accepted?

To ensure that physicians are adequately compensated and, at the same time, to mitigate concerns about undue industry influence or bias in the research process, several industry associations developed FMV guidelines to define the appropriate payments to physicians. The associations including FMV honoraria in their ethical codes are the Pharmaceutical Research and Manufacturers of America (PhRMA), representing medical technology companies; the AdvaMed Code of Ethics on Interactions with Healthcare Professionals, the European Federation of Pharmaceutical Industries and Associations; and, for research involving human subjects, the Institutional Review Board (IRB) Requirements. Additionally, the U.S. regulatory agency, the Food and Drug Administration, does not explicitly dictate FMV, but oversees promotional activities and requires that interactions between industry and healthcare professionals comply with regulations regarding fair balance, accuracy, and transparency. 

With such widespread acceptance of FMV as the ethical standard for physician honorariums, healthcare companies have also adopted FMV as the legal and accounting standard for physician payments. Even though FMV is a suggested guideline, market researchers face strong opposition from client legal and accounting teams to paying any honorarium different than FMV for a given research methodology with a selected specialty. But is FMV the best way to compensate physicians for participating in market research?

Negative Impact of FMV on Market Research

In market research with physicians and other healthcare professionals, FMV can sometimes present challenges and limitations that may impede the research process and resulting data quality. In general, if the qualified healthcare professional perceives the FMV honorarium as insufficient or not commensurate with the time and expertise required, they may choose not to participate in the research. As honorariums are supposed to ensure an appropriate response rate, this lack of participation could severely handicap the completion of the study. Alternatively, you may collect lower-quality data if your sample does not represent the entire specialty. Similarly, suppose your qualified physician is a very high-performing doctor in their specialty. How likely will they participate with an honorarium based on the industry average compensation? 

A Better Way: Supply and Demand

While FMV was partially established to prevent physicians being unduly influenced by healthcare industry players, the fact is that market research rarely offers any opportunity to unduly influence healthcare respondents. Additionally, as discussed above, market research needs flexibility to offer honoraria that entice the correct and appropriate respondents’ participation to deliver quality results and insights to our clients. Since participation in market research does not influence physician behavior, why don’t we just follow the rules of Supply and Demand? Not all physicians  are equally qualified, so we can’t assume they all will be attracted to the FMV honoraria? Market Research firms should be free to pay whatever honoraria they need to pay to get the job done while remaining competitive.

Summary

Overall, while fair market value principles serve critical purposes in ensuring transparency, fairness, and ethical conduct in physician-industry interactions, overly rigid adherence to FMV guidelines in the context of market research may inadvertently hinder the quality, breadth, and impact of research initiatives. Striking the right balance between compensation considerations and the need for robust, insightful research findings is essential to maximizing the effectiveness and value of market research involving physicians and healthcare professionals. Paying honorarium using the rules of Supply and Demand, we can do that.

What do you think? Is Supply and Demand the answer? How can we fix the payment of honoraria to healthcare professionals to improve the quality of market research?