Higher costs, dwindling grants in 2005

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Pharmaceutical company support for CME increased 4% in 2005 to $1.1 billion, but higher expenses swallowed up any profit for publishing and education companies, according to the annual report of the Accreditation Council for Continuing Medical Education (ACCME), released in July.

“It's rather striking that commercial spending is still growing, but the rate of spending has dropped,” said Eric Peterson, VP, continuing education, Academy for Healthcare Education.
Between 1998 and 2003, commercial funding grew an average of 21% per year. From 2003-2004, it dropped to 9% and to less than half that in 2005. Peterson attributed the slowing growth to pharmaceutical firms adjusting to new, more compliant funding systems since 2003.
If the slowdown in grants has hit bottom, “this will have been a small price to pay to increase the level of compliance and increase the quality of CME offerings,” said Marty Cearnal, EVP, chief strategy officer, Jobson Medical Information.

Due to the decline, grants slipped to 49% of total CME income. Conversely, sales of advertising and exhibit space at meetings, along with registration fees, increased to a 50% share.

Physician member societies continue to be the most profitable providers, with most of their revenue coming from registration fees. Publishing/education companies had the highest gross income, driven partly by a 12% ($67 million) jump in commercial grants. Companies also draw most commercial funding (45%). However, because eight additional education companies began reporting commercial support during the period, the amount of support per provider actually fell 1%.

Expenses also ate into their profits, increasing 13.5%—roughly double the rate of total expense for the entire industry (6.5%).

“There is more internal expense related to what we do to comply with the new [ACCME] Standards for Commercial Support,” Peterson said.

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