It’s not Just Salary! Breaking Down the Shocking Cost of Employing MSLs: Part 1 of 3

Introduction

Medical Science Liaisons (MSLs) are a crucial position with pharmaceutical companies, connecting them to the broader medical community. While their salaries might seem straightforward, the real cost of employing an MSL goes far beyond just the paycheck. In fact, the numbers might just leave you stunned. In this three-part series, we’ll unravel the hidden expenses of MSL employment, the challenges in quantifying MSL output, and strategies to ensure a return on investment. Let’s start by pulling back the curtain on the true costs.

The Multifaceted Role of an MSL

Before diving into the financials, it’s crucial to grasp the diverse responsibilities of an MSL. Representing their companies, they engage with key opinion leaders, attend pivotal conferences, and disseminate knowledge on cutting-edge medical advancements. Their role is undeniably vital, but it comes with a hefty price tag that many overlook.

MSL Employment Costs by the Numbers

We will use a realistic, yet conservative basis of our MSL employment cost estimate in the United States.

1. Base Salary: Let’s assume a salary of $150,000. While this is a generous cost already, it is just the tip of the iceberg.
2. Benefits: Beyond the base salary, benefits like health insurance, dental coverage, retirement contributions, and other perks can add an additional 30% to the total, or $45,000 in this case.
3. Bonuses and Long-Term Incentives: Performance-based bonuses can add another 20% to the base salary. When you factor in long-term incentives or equity, you’re looking at an additional 5-10%. This adds another $45,000.
4. Travel and Expenses: MSLs aren’t just desk-bound. Their extensive travel can range from $20,000 to $50,000 annually, depending on territory and frequency. In this case, let’s assume $30,000 travel and expense costs.
5. Training and Professional Development: The medical field is ever-evolving. Companies often allocate $2,000 to $10,000 annually for courses, certifications, and conferences to keep their MSLs at the forefront. We will use $5,000 for our calculations.
6. Company Car/Car Allowance: A perk for many MSLs, but it’s another cost to factor in, adding around $6,000 annually.
7. Employer Taxes: Employers bear the responsibility of several taxes and contributions on behalf of their employees:
8. Social Security Tax: Employers contribute 6.2% on the first $142,800 (as of 2021) of an employee’s wages. For a $150,000 salary, this amounts to a contribution of $8,853.60.
9. Medicare Tax: Employers are responsible for 1.45% on all of an employee’s wages. In the case of a $150,000 salary, this translates to $2,175.
10. Federal Unemployment Tax Act (FUTA): Typically, employers pay FUTA tax at a rate of 6.0% on the first $7,000 of an employee’s wages. However, this can be reduced by up to 5.4% if the employer also pays state unemployment taxes. Assuming the maximum reduction, the effective FUTA rate would be 0.6% of $7,000, which equals $42.
11. State Unemployment Taxes (SUTA): This varies by state, but for our calculations, we’ll assume an average rate of 2.5% on the first $10,000 of an employee’s wages, resulting in $250.

In total, the combined employer taxes and federal payroll expenses can add over $11,320.60 to the annual cost of employing an MSL.

When combined, these costs reveal an eye-opening figure. The estimated annual cost of employing an MSL in the U.S. can soar to approximately $292,320.60.

Remember, this is a conservative estimate!

Conclusion

The role of an MSL is invaluable, but it’s essential for candidates and employees to be aware of the true costs, which are often far more shocking than anticipated. In our next post, we’ll delve into the challenges of measuring the output of the MSL role and its implications.

Stay Tuned

Join us for Part 2, where we’ll tackle the complexities of quantifying the MSL’s contributions. By the end of this series, you’ll be equipped with insights to maximize your company’s investment in MSLs.