Headline inflation is focused on consumption and is different from wages. Wage inflation counters headline inflation, which has been the case in the United States, but that’s not necessarily the case globally.
Hitting the life sciences industry on multiple fronts, inflation has dramatically increased the prices of HCP engagement. As a result, it is just a matter of time before Chief Compliance Officers (CCOs), Compliance Ops individuals, and marketer teams will start hearing from healthcare professionals that their payments for events and programs are low, and they need to reconsider this.
In addition to the HCPs asking for high remunerations, the professionals mentioned above will likely face above-average budget increases, budget constraints, and more.
At the moment, it would be a little difficult to comprehensively analyze and determine the impact of inflation in different countries given that we haven’t experienced such high inflation for quite a few years, but this surely doesn’t mean that you should ignore the fact that inflation will not only affect rates in countries, but it will also impact you and your team.
Therefore, it’s always better to stay prepared by reviewing your annual HCP engagement plan and design strategies to tackle such high inflation.
But even before designing strategies, it is imperative to understand that the inflation we’re talking about here is headline inflation which is different from wage inflation.
What is the difference?
Well, headline inflation is what you generally hear or read about in the news. It is the increase across a broad basket of goods and services, whereas the rates Life Sciences companies provide are based on wage data.
Headline inflation is focused on consumption and is different from wages. Wage inflation counters headline inflation, which has been the case in the United States, but that’s not necessarily the case across the globe.
Also, the rates provided by the valuation provider will likely be adjusted for inflation up to the day provided to you. Forecasted inflation will not be considered in your FMV assessment unless specifically called to do so.
Additionally, since wage inflation is difficult to forecast, it is not a highly recommended strategy for handling inflation.
Now, amid the chaos, what should compliance professionals do to address high inflation rates? Considering the following pointers would help compliance professionals to respond to HCPs about inflation effectively:
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Compliance teams should have knowledge regarding headline inflation in the country.
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Remind HCPs that headline inflation is not equal to wage inflation.
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Understand the impact of headline and wage inflation in the country.
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Continuously update your rates and agreements with HCPs.
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For companies making HCP payments in foreign currencies, it is critical to ensure that the exchange rate reflects recent and expected inflation differentials.
Furthermore, your budget for engaging HCPs will definitely be impacted due to inflation but predicting to what extent is difficult.
Although historical data indicates that wage growth has been directly proportional to headline inflation over the years, it is unknown if this trend will be followed with the current high inflation rates.
qordata’s data-driven compliance solution “HCP Engage” enabled compliance professionals to dive into the world of compensation data of dozens of medical specialties and ancillary medical professionals, i.e., NPS, PAs, RNs, and PharmDs.
This makes it significantly easier for compliance professionals to tier HCPs and defend fair market compensation to HCPs for bona fide services. Schedule a demo with us today and get a free demo of qordata’s data-driven HCP Engage.
