HCP Meal Caps Examined

October 20, 2018

When the Sunshine/Open Payments Act went into effect in 2013, life sciences companies implemented self-imposed meal caps to be compliant. Although the actual regulations in the U.S. require only that food and beverage (F&B) offered be “reasonable” or “modest” in price, concerns about compliance perception made those who set the budgets interpret “reasonable” more frugally than reality, especially in first-tier cities. To make matters more complicated, most life sciences companies have not adjusted their self-imposed meal caps since they were first established in 2013, although F&B costs have increased steadily each year.Meal cap reform was one of the hot topics at the latest Pharma Forum in Philadelphia. In 2017, they released survey results of 41 pharmaceutical companies. Here’s a breakdown of the survey results related to meal caps:

Percentage of respondents with established dollar limits for meals given to healthcare providers at out-of-office meetings held in the U.S.
  • 100% Pharma company respondents
  • 66% Vendor/consultant respondents
Type of HCP events for which pharma companies said they have meal limits:
  • 97% Advisory board meetings
  • 91% Speaker training
  • 91% Investigator meetings
  • 70% Educational programs
Average meal caps reported by pharmaceutical meeting managers
  • $61 Breakfast
  • $70 Lunch
  • $125 Dinner
  • $39 Breaks

Note: 87 percent of pharma planners said their meal caps include tax and service charges Only 39% of pharma planner respondents reported that their organizations have tiered meal caps by city

Note: Planners whose organizations have tiered meal caps most commonly cite New York City, San Francisco, and Boston as having higher meal cap allowances.

Meal caps for international meetings
  • 52% of pharma planners apply the HCP meal limits required by the most-restrictive country represented by their attendees.
  • 17% apply the limit of the country in which the meeting is held.
  • 13% manage international meal caps on a case-by-case basis.
  • 9% apply the host/sponsoring country’s meal limits.

The Pharma Forum also surveyed service providers and how meal caps affect their businesses. Nearly half of the hotelier respondents reported turning down life sciences RFPs due to unreasonably low meal caps.  Many find it difficult to support F&B labor (which is paid through service fees and gratuity) at the meal cap rates. There is an obvious disconnect between real F&B costs and the amount budgeted for F&B spending by pharma companies. As the F&B and labor costs for hotels continue to rise based on world and environmental reasons, life sciences companies need to review meal caps annually and keep them in line with average first-tier hotel rates. Getting everyone in line with real costs has proven to be a challenge, but one certainly worth pursuing!