SHG does not determine FMV rates; we adhere to FMV rates given to us by our clients.
The issue of determining useful fair market value (FMV) rates for market research honoraria is complex and tends to complicate the market research process. Before manufacturers were required to adhere to FMV, market research honoraria was determined based on supply and demand of study respondents and therefore was solely dependent on the required sample size for a research engagement. Today, in many cases, there is no real relationship between FMV and the market-based honoraria rates needed to complete research studies at scale. This gap between market-based and FMV-based honoraria has the potential to strip market research of its predictive power and create risk for key manufacturer initiatives.
Market research is valuable because findings are based on a representative sample of a target population and can therefore be extrapolated across the entire target universe. Sample sizes and ratios need to be relatively large. However, we find that FMV rates are often set for non-market research interactions (ex. advisory boards, consulting engagements, etc.) that are not meant to be statistically significant and therefore require a much smaller number of participating HCPs. This artificially depresses the honoraria amounts market research agencies can offer participating HCPs. For example, if a manufacturer only requires a small sample size and there are no issues that complicate the study (such as a low HCP qualifying rates like those found in niche targets) we can generally use FMVs as provided by manufacturers. Unfortunately, for a typical quantitative study, this is rarely the case.
To determine appropriate honoraria levels, market research agencies have historically used sophisticated statistical models designed to ensure significance. Specifically, agencies determine honoraria by creating a ‘record to recruit’ ratio that is dependent on the qualified universe a client requires (the healthcare universe being targeted multiplied by incidence) and dividing that by the required N size for this study. The higher the number of HCPs in the universe, the lower the honorarium necessary to garner an appropriate response at the study sample size. Conversely, the lower the number of HCPs in the universe, the higher the honoraria necessary to garner an appropriate response at the study sample size. This ‘record to recruit’ ratio calculation directly informs the honoraria levels agencies offer for market research participation. Honoraria rates would also differ based on the amount of a population (specialty) available within the HCP universe. For example, the honoraria for a Primary Care Physician (215k US population size) will be much lower than that of an Oncologist (11k US population size of Medical and Hematological Oncologists).
We will attempt any study at a client’s FMV rates with the caveat that those rates, if set too low, will decrease the sample size that can be delivered. We also point clients toward the recent BHBIA Response Rate Task force white paper, which SHG contributed to, since it is instructive in understanding the current state of market research with HCPs. While it does not address FMV directly, it does address honoraria as a key driver that affects physicians’ willingness to take part in market research.