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Thought leadership and innovation for the Pharmaceutical Industry

Phil Taylor explores how pharma’s relationship to key opinion leaders is changing - for the better

By phil7taylor on Jan 17, 2012

The image of doctors being plied with expensive trips and gifts to encourage them to prescribe or promote a specific medicine is a tabloid favorite, but is this still an accurate portrayal of the relationship between the pharmaceutical industry and the medical profession?

Overly generous payments to healthcare practitioners who act as key opinion leaders (KOLs) by the drug industry have been cited by journalists for years, and regulatory developments on both sides of the Atlantic have continued to focus attention on the issue.

“It’s clear there have been concerns about how much money certain physicians are paid to be KOLs, and there is a need to make this process transparent in order to re-establish public trust in Big Pharma,” says

Rob Hicks, a general practitioner specializing in men’s health who serves as a KOL on a number of topics.

Those concerns have already started to take root in new regulations implemented by governments and industry itself.

For instance, the Physician Payments Sunshine Act in the US, which is due to be implemented this year, intends to lay down rules for providing honoraria to healthcare practitioners, as well as disclosure requirements. (For more on the Sunshine Act, see ‘How to keep the Sunshine Act from raining on your parade’ and ‘M’s the Word: Let the sun shine on KOLs’.)

Meanwhile, in the UK, the 2011 edition of the Association of the British Pharmaceutical Industry’s code of practice was updated to include a restriction on promotional giveaways (from May 2011) and requirements to declare payments to doctors and funding to attend medical congresses (in 2013).

While progress has been made in making honoraria paid to KOLs public, that very transparency is revealing incidents where—according to some observers—excessive payments are still being made.

One case cited recently involved a doctor who was charging a drug-maker thousands of dollars a day to review manuscripts.

No more pushing products

The industry has made great progress in recent years in improving its relationship with KOLs, according to Hicks.

Five to 10 years ago, doctors were under much more pressure from the industry to actively push products—for example, by mentioning them by name in presentations and interviews—than they are today.

“Now, the norm is to sign a contract saying, ‘I will under no circumstances mention the name of the product’, which is a complete turnaround,” he says.

In some respects, that reflects the increasing sophistication and power of the KOL community, which recognizes that it can impart information to fellow healthcare professionals and patients in a way that pharmaceutical companies’ marketing departments simply cannot.

More can be done, however, to ensure both sides enjoy a fruitful and mutually beneficial relationship.

Peter Ilves, a GP principal specializing in GP commissioning, supporting self-management, and the patient empowerment agenda, says the initiatives in the US and UK indicate that there is clearly a need for tighter oversight of the relationship.

One issue that has to be tackled is the enormous divergence on remuneration for KOL services, he says: “I have been shocked at the remuneration given to some individual KOLs, but not so much for the high amounts in some cases, rather the enormous range in pay. This raises all sorts of issues in terms of parity and fairness, but also seems to a very inefficient way for the pharma industry to work with KOLs.”

There are anecdotal reports that some KOLs have indulged in a bit of horse-trading, playing one company off against another in order to hike honoraria rates.

“By having non-standardized pay scales, the industry is exposing itself to that type of behavior,” Ilves points out.

“Moreover, differential pay can lead to suggestions that those KOLs who are paid more are under additional pressure to influence those around them in favor of the company.”

“Most people agree that KOLs should receive some form of honoraria in return for their time, experience, and expertise," adds Hicks. “But it is clear that the relationship between pharma and KOLs—in some cases - has not been appropriate.” (For more on getting the KOL relationship right, see ‘M’s the word: Keep KOL relationships in the open’.)

Standardized pay scales

One way forward could be to develop a tariff system, agreed by all parties, which would be visible to anyone who wanted to see it.

“If someone is asked to do an hour-long presentation, for example, they could receive a standard rate, regardless of who they are,” suggests Hicks.

A single payment scale could potentially cut out outlying KOLs who receive disproportionate payments or, at the very least, remove any uncertainty about what constitutes a fair rate.

There are precedents for this type of approach. Some years back, the British Medical Association laid down clear rules on how much GPs in the UK could charge for services outside the National Health Service contract, such as signing passport applications.

But will the pharmaceutical industry and KOLs play ball?

“If Big Pharma genuinely wants to get on top of this, then everyone will have to agree to play by the rules,” says Hicks.

“Very few will be worse off by standardized pay scales, and the majority should see honoraria rates go up a little bit. It's likewise with KOLs. These are services that lie outside a doctor’s usual contracted work, and it makes sense to charge a reasonable, transparent rate for them.”

How committed drug-makers are to the process remains to be seen.

One KOL, who declined to be named, suggested some companies appear to be completely committed to getting a transparent system for KOL payments and management in place, in part for the positive PR of taking a lead in this area, but also to avoid having onerous restrictions forced upon them.

Others are perhaps doing just enough to stay in compliance with the current guidelines, while a third category seems simply to be paying lip service to the concept.

But on balance, there seems to be a real shift towards transparency, according to Hicks: “If asked whether the industry as a whole wants to develop better practices, I'd have to answer yes.” (For more on the changing role of KOLs, see ‘Q&A: How to engage with KOLs’.)

Merck & Co is one drug-maker pushing toward a more open disclosure policy.

In 2009, the company said it began voluntarily disclosing payments to US-based KOLs who spoke on its behalf at meetings, and next year that will be extended to include physicians who carry out consulting services.

In March 2011, the company published updated information on its speaker KOLs, noting that it worked with over 2,000 healthcare practitioners who contributed to an average of six programs at an average rate of $1,659 per program.

GlaxoSmithKline, Eli Lilly, and Pfizer are among other drug-makers that have adopted a disclosure policy ahead of the US Sunshine Act requirements.

One of the stumbling blocks has been that companies—and certain KOLs—are worried about the potential fallout in the media of having to disclose past payments, and this has led to suggestions that disclosure rules should perhaps only come into effect on a particular date.

Any payment practices before that time could be non-disclosable, and pharma and KOLs alike could start with a clean slate.

KOL evolution

Another evolution in the relationship between KOLs and the pharmaceutical industry is that the definition of a KOL has been changing, and the industry is no longer relying on the same KOL throughout the life cycle of a project.

For example, while a senior figure in secondary healthcare may be the ideal candidate during the development phase of a new drug, once it is launched other KOLs may come into play, such as primary care specialists, general practitioners, leaders of patient groups and pharmacists.

“At different points in time, the role of KOL could be fulfilled by different people,” comments Hicks.

“In the early stages, it makes sense to have a figure who is involved in clinical trials and can assist in patient recruitment. Later on in the product life cycle, for example when it moves from prescription-only to over-the-counter status, the pharmacist would come to the fore.”

“The pharmaceutical industry has not been effective to date in broadening out their value proposition beyond traditional product marketing,” says Hervé Drevot, vice president of European healthy systems think tank CrossWorlds HealthCare Professionals.

The industry needs to move on to offering bundles of products and healthcare services, for example marrying diagnostics, therapies and associated programs to improve health outcomes, he says.

That means getting external experts involved at every stage in a new product’s development, from research through clinical trials and beyond.

“Pharma must build networks with a broad range of clinical as well as non-clinical stakeholders, including healthcare payers, health economists and policymakers. That is a big change in the industry’s paradigm,” according to Drevot.

There are encouraging signs that this notion is gaining traction in pharma.

Ilves has been pleasantly surprised by the willingness of companies to get involved in initiatives beyond the traditional scope of a KOL, such as his own activities as a tutor helping physicians encourage patients to self-manage their conditions, for example by improving compliance with medication.

That ties in with a recognition that KOLs can come from all stakeholders in healthcare, including patients themselves.

“The most potent KOLs in some cases will be those with the greatest vested interest personally in a new therapy being successful,” he says, noting that this ties in well with the current focus in the UK National Health Service for co-production, which brings together doctors, patients, the industry and other stakeholders in the provision of health service.

While attention on the relationship between KOLs and the pharma industry seems focused on money at the moment, the other benefits should not be discounted.

For instance, a key benefit of having KOL status with the pharmaceutical sector is access to information before it hits the mainstream media, which helps doctors serve their patients better, according to Hicks.

And the changing nature of healthcare, such as the introduction of foundation trusts in the UK and practice-based commissioning, means there are opportunities for KOLs to tap into pharma’s commercial expertise to help them expand beyond their traditional clinical specialist roles.

Managing the KOL network

Most healthcare practitioners would be surprised at the amount of resources within pharmaceutical companies, in terms of financing and manpower, which goes toward identifying, managing, and maintaining the KOL network.

Some operate league tables based on variables such as publications, co-authors (used as a measure of their professional network) and attendance and presentations at major conferences to rank and categorize KOLs.

The reasons for this are simple, according to Drevot.

There are often only a few top-level KOLs in a particular field, so competition for them is fierce and they do not have the time to work with all potential partners.

“This is driving a change in the way pharma is working with KOLs, away from a one-shot collaboration, such as a clinical trials, and towards a collaborative, co-innovative approach,” he says.

These could run over multiple years and include milestone payments, arrangements akin to the deals traditionally signed between a pharma company and a biotech company.

While not generally disclosed to the KOL, ranking schemes also raise interesting considerations for established experts and those aspiring to join their ranks, according to Hicks: “KOLs down the rankings might find it harder to secure sponsorship to attend conferences, or get funding for their research activities, but most KOLs are likely unaware that these systems exist.”

The ranking systems also provide an opportunity for pharma to work in collaboration with healthcare professionals in other ways, according to Ilves.

“As a commissioner, I would love to have access to a menu of experts so that I could draw on their capabilities and skills,” he says.

It is clear that the relationship between the pharmaceutical industry and healthcare profession is in flux, but the signs are that the industry and KOLs are coming to the realization that open, balanced relationships can help provide the best outcome and service for patients.

The new regulations and guidelines are important to rebuild trust in the industry, according to Drevot, but will also help industry get a clear picture where its KOL funding is going and, hopefully, could usher in a new era of mutual benefit and risk-sharing.

“Pharma needs medicine and patients, medicine and patients need pharma,” says Hicks.

“What we need to establish is a very transparent, open and honest relationship that works for all parties.”

For exclusive business insights into KOLs, attend KOL and Stakeholder Engagement Europe 2012 on February 21-22, 2012 in Berlin.

For more articles on KOLs, see Special report: KOLs and pharma.

For more exclusive business analysis, download eyeforpharma's Pharma Emerging Markets Report 2011-12 and Pharma Key Account Management Report 2011-12.

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