HVG has experienced an uptick in clients requesting a commercial reasonableness opinion on the compensation of laboratory sales representatives. Typically, this is in the context of a third-party “marketing company,” where an MSA is in place. As many of you know, the FMV MSO fee is most commonly calculated on a cost-plus markup basis. But what if the costs of the marketing company are excessive or not reasonable? Some compliance experts believe this is an element of risk. The other expenses incurred by the laboratory marketing company should also be a concern. If the laboratory marketing firm pays its sales representatives more than a pharmaceutical sales representative, I believe there’s a problem. Or if the lab sales representative is underqualified but earns a salary equivalent to that of an experienced pharmaceutical sales rep, there may be a problem. In some cases, a commercially reasonable (CR) opinion is appropriate and adds an additional element of risk reduction.
