Despite dire predictions that pharmaceutical companies' commercial support of CME would shrink or evaporate entirely, a study conducted by Cutting Edge Information, Research Triangle Park, N. C., shows that funding is on the rise. Released in September 2006, the 165-page study, “Pharmaceutical CME: Measuring Program Effectiveness in the Compliance Environment,” shows that the majority of pharmaceutical companies plan to maintain or increase their levels of CME funding and staffing in 2007. In fact, with industrywide CME support holding strong, companies that are decreasing their CME budgets or staffs should rethink their strategies in order to remain competitive, the report concludes.
The study consisted of an online survey and telephone interviews with medical education and medical affairs executives at 22 pharmaceutical and biotechnology companies, ranging from giants such as Novartis, Sanofi-Aventis, and Bristol-Myers Squibb to midsize companies such as Allergan, and TAP Pharmaceuticals, to smaller ones such as EMP Pharmaceuticals.
The study found that companies' annual CME budgets ranged from $500,000 to $65 million, with the average being $15.1 million. While the study did not differentiate between support for certified and noncertified CME, the vast majority of participants' funding — more than 90 percent — is for certified activities, clarifies Elio Evangelista, senior research analyst at Cutting Edge Information. Of participating companies, 41 percent plan to increase their CME budgets in 2007, 29 percent expect to maintain their 2006 levels, while 29 percent plan to decrease their CME budgets. (Numbers in this story are rounded off.) The study did not ask participants to specify the amount of increases or decreases in their budgets.
In addition, 47 percent of the companies plan to increase the number of CME events they support in 2007, while 41 percent will fund about the same number, and 12 percent will decrease the number of events funded.
As for staffing, the number of full-time employees in CME departments ranges from one to 36, with the average being eight. Almost a quarter of companies — 24 percent — plan to increase CME staffing, while 71 percent expect staff numbers to stay the same, and only 6 percent anticipate a decrease in staff size next year.
The study also examined a number of other issues, including how CME departments are structured in pharmaceutical companies. As most CME professionals know, in order to comply with the Office of Inspector General's pharma marketing guidance, companies have separated CME from sales and marketing groups to prevent commercial influence on education. It will come as no surprise to providers that 82 percent of companies have centralized CME operations in order to comply with regulations.
The study's analysis of CME departments' structures and budgets show that companies are grappling with how to remain compliant while ensuring that CME serves business goals. At one large company, for example, all ties between medical affairs and the commercial business units have been severed, and the CME department supports events based on a general understanding of the company's strategic direction. One employee referred to this structure by saying that supporting CME “equates to writing a check, throwing it over the fence, and hoping for the best.”
Most companies have moved away from aligning activities with specific brands, instead supporting CME aimed at therapeutic areas. Most of the CME departments, 76 percent, report to medical affairs; however, 12 percent still report to sales and marketing. Smaller percentages report to other business groups.
Despite the firewalls, a whopping 94 percent of participating companies' CME departments do receive input from sales and marketing teams. Eighty-eight percent get input from medical affairs, 47 percent from regulatory affairs, 47 percent from clinical development, and 29 percent from the executive team.
While companies now allocate dedicated budgets to CME, funding decisions are still driven by business interests at some companies, the reports finds. For instance, products that are expected to drive the most growth get the most CME support.
The volume of grant applications received by the companies per month ranges from fewer than one to more than 1,000, and the approval process varies. At one company, the person in charge of grants for each therapeutic area has the authority to authorize funding. At another, there is a grant evaluation committee, where representatives from medical education, medical affairs, and legal all have voting authority. One company's CME department runs proposals by the marketing department.
Companies are concerned about providers' reputation for compliance. Execs also said they look for providers that have innovative marketing plans and target key physicians. Companies evaluate proposals based on their scientific merit, and prefer a track record of success — for example, they look favorably on an annual event that's in its 25th year. And, as providers are well aware, companies seek proposals that include outcomes measurement.
The complete survey is available for $6,995. For more information visit www.cuttingedgeinfo.com.
CME Funding on the Rise
41% of pharma companies plan to increase budgets
24% plan to increase CME staff
47% plan to increase the number of CME events they support