Introduction

Fair Market Value (FMV) remains a central focus within the life sciences industry, as underscored at the recent Pharmaceutical and Medical Device Ethics and Compliance Congress. As the regulatory environment continues to evolve, companies are under increasing scrutiny regarding the appropriateness of compensation paid to healthcare professionals (HCPs). Corporate integrity agreements repeatedly highlight deficiencies in FMV methodologies, reinforcing the importance of strong governance, defensible processes, and ongoing monitoring. Because FMV determinations directly intersect with anti-kickback statute risk, compliance professionals must regularly evaluate whether their policies, procedures, and operational practices are both current and effective.

A foundational component of FMV governance is the framework used to assess an HCP’s skills, experience and qualifications. When developing tiering questions or criteria, organizations should ensure that all measures are objective, evidence-based, defensible and applied consistently. FMV determinations must never be influenced by prescribing volume or referral potential. Instead, tiering tools should reflect the HCP’s expertise and professional accomplishments. Common criteria include academic appointments, publication and presentation history, clinical research involvement, leadership roles and depth of specialty experience. Additional considerations include the HCP’s clinical specialty, the country of licensure and whether the HCP possesses rare disease or highly specialized expertise. Rate cards—centralized lists of approved compensation rates—should be benchmarked against credible market data and reevaluated periodically. Organizations must also determine which internal stakeholders are best suited to perform HCP tiering, balancing subject-matter expertise with independence from commercial influence.

Travel time

Compensating HCPs for travel time presents unique challenges, and companies should adopt methodologies that are fair, transparent and aligned with FMV principles. Travel time represents compensated professional activity, as HCPs are unavailable to treat patients while traveling for company-sponsored services. Approaches vary widely. Some organizations compensate door-to-door travel at 100 percent of the HCP’s FMV hourly rate, others adopt a 50 percent reduced rate, and still others apply hybrid models depending on distance or duration. One practice discussed at the congress involved the use of a flat, FMV-supported travel flat rate calculated based on round‑trip mileage, offering consistency and administrative simplicity.

Preparation time

Preparation time remains a consistently challenging area within FMV frameworks. Companies should develop a detailed standard operating procedure that outlines permissible preparation activities, reasonable time expectations and the documentation required to support claimed hours. Preparation time should reflect what is necessary for the HCP to meet the defined expectations of their engagement—no more, no less.

Where possible, organizations may “hard‑code” preparation time ranges by event type, requiring elevated approval for requests that exceed those thresholds. Special consideration should be given to chairs or moderators of major scientific events, whose responsibilities often require substantially more preparation than standard participants. Establishing clear, defensible assumptions reduces variability, enhances consistency and strengthens audit readiness.

Social media influencers

FMV considerations for social media influencers continue to evolve, and industry standards are far less mature than those governing traditional HCP engagements. Unlike conventional FMV frameworks, rate cards generally do not exist in this space, and factors such as content development and platform reach may be relevant depending on the nature of the services provided. The most effective approach is to establish defensible principles tailored to influencer‑based engagement, focusing on the content created, the expertise of the influencer (e.g., HCP, patient, caregiver) and the complexity and time required for the requested activity.

Companies should distinguish between original content development, which typically warrants higher compensation, and simple reposting, which may require significantly less time and expertise. Any original content should undergo review and approval by the appropriate medical, legal and regulatory stakeholders to ensure accuracy and compliance.

Conclusion

As the FMV landscape continues to mature, life sciences companies must proactively refine their compensation methodologies to ensure compliance, fairness and operational consistency. Strong governance, objective and defensible tiering tools, thoughtful approaches to travel and preparation time, and emerging best practices for social media influencers all contribute to a comprehensive FMV framework. By continuously assessing and strengthening these elements, organizations can reduce risk, enhance transparency, and maintain the trust of regulators, HCP partners and the broader healthcare community.

 

For more information on fair market value governance or to discuss how we can support your compliance initiatives, contact us today.

 

November 18, 2025

Jay Ward
Life Sciences Solutions Director