Thursday, May 30, 2024
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4 Common Clinical Trial Budget Challenges and Tips for Overcoming Them

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When most clinical researchers think of their budget and contract process, words like “painful,” “frustrating,” “confusing,” and “prehistoric,” come to mind. Unfortunately, this sentiment is nothing new for the clinical research community. In a 2018 survey conducted by Tufts University, clinical trial Budgets and Contracts were reported to be a main reason that 11% of study sites are never activated. 

Surprisingly, this statistic has been relatively constant over the last 20 years. Budgets and contracts seem to be the most common cause of study startup delays and failure to activate.

One reason that the process is so lengthy and frustrating is that many sites do not have dedicated and/or centralized budget and contracts teams at their sites. In other words, many clinical research staff are responsible for negotiating budgets and/or contracts in addition to other regulatory and study tasks, without specific training, qualification, or expertise. 

When unqualified staff are asked to negotiate budgets or contracts they inadvertently cause delays, inconsistencies, and make mistakes, all of which pose a significant compliance risk to sites, especially as trials, insurance, and medicare rules become more complex. 

Of course, staff are not always able to influence site decisions about staffing, so Florence’s Andrea Bastek partnered with Susan Mauermann, Tyler Payne, and Wes Warren to share simple and effective explanations of the common issues and tips for improving the process.

Understanding Delays—Knowledge is the Key to Success

Delays can be caused by all parties during the process, although often sites bear the brunt of the blame. Sponsors and CROs are often slow to respond to site questions, especially when a CRO must act as the intermediary between the site and sponsor for complex negotiations. 

A major factor for site delays is not having all the necessary details about the protocol, such as required lab tests, CPT codes for study procedures, investigator’s brochures, or detailed visit requirements. Missing information will delay the coverage analysis process and prevent sites from obtaining accurate hospital pricing. 

Poor internal collaboration is also a major cause of delays. When budget and contract teams do not cross-reference their work, it causes rework. If the budget team doesn’t review the contract they may be unaware of study requirements or operational language that need to be accounted for in the budget, either with increases from standard amounts or with new line items. 

 

Example Contract Terms that Impact the Study Budget

    • Unreasonable data entry or query completion time requirements
    • Parameters surrounding monitor visits
    • Unusual terms for invoicing
    • Special requirements for biospecimen collection/shipments
    • Special handling requirements for investigational product
    • Extended record retention requirements

Contract terms such as these examples often represent effort (time) of the study team can be hard to estimate and are variable based on the study.

An efficient process has contract and budget aligned and collaborating as negotiations proceed. The challenge for most sites is having a qualified staff person who is responsible for that joint oversight. If there isn’t alignment then either the budget or the language of the agreement may need to be re-negotiated after the other is finalized, extending the entire process.

Many perceived delays are due to a lack of understanding of each site’s processes, and the incredible variety in site, CRO, and sponsor activation processes. Some sites are able to start budget negotiations simultaneously with the IRB and contract processes. Other sites require the processes to occur sequentially. Some sites require coverage analysis to be completed before any other activation steps. Many sites begin ONLY when all study documents have been provided, which can cause CROs and sponsors to misunderstand the site’s activation timeline. For example, the sponsor thinks that startup has begun when the invitation letter is sent, but the site can’t actually start the process until the budget and contract are sent, which may be several weeks after the invitation. 

All of these different processes can be improved and delays can be reduced when there is good communication and a shared understanding of the process, the owner for each action, and the expected timeline for each step. 

Takeaway: Take time to explain your process to the other stakeholders—ensure clarity in requirements and expectations. Identify delays and missed expectations early!

The Impact of Inconsistency

There are often differences between contracts and budgets from the SAME sponsor/CRO for different studies at the SAME site. For example, the same sponsor might be paying two different amounts for the same task/test (such as an EKG) on separate studies. This is an example of how sponsor/CRO teams often have no historical knowledge of a site their organization has worked with many times before. 

The teams often are not able or not willing to look at past budgets or contract terms. Different study teams at the same sponsor/CRO have different master budgets, and that results in inconsistencies in site budget templates.

Master agreements, master rate sheets, and master NDAs can help significantly reduce inconsistencies as well as negotiation timelines. Our panelists had success negotiating master agreements with sponsors but less success negotiating such agreements with CROs. In many cases sponsors require CROs to use the sponsors’ own templates and ultimately end up executing the contract even when the CRO negotiates it, so master agreements with CROs often don’t make sense.

Takeaway: Sponsors/CROs should leverage past site information to be more efficient. Sites should share past clinical trial budget and contract terms from the same sponsor early in the startup process as justification for their requests. All parties should establish master agreements when a long standing research relationship is expected.

Easy Budget Wins

  • JUSTIFICATION: Provide an explanation and justification for each cost in your budget on your letterhead. This gives the sponsor/CRO the official documentation they would need to provide during an audit or inspection. Panelists experienced that providing this upfront increased the sponsor’s willingness to accept costs and dramatically reduced the back and forth communication about any line item.
  • RATE CARD/CHARGE MASTER:  Develop a rate card for your site. A rate card is a standard cost structure, you can think of it like a “master budget.” It is a way to communicate easily to a sponsor/CRO what your standard cost is for common fixed-cost items like IRB fees, administrative start-up costs, scientific review fees, etc. as well as the hospital and provider cost for each procedure. These should be updated at least annually to prevent the risk of being outdated.
  • TALK: A phone call with the sponsor/CRO representative is a MUCH more effective tool for resolving negotiation issues than an email exchange. Get the actual decision makers involved early in the process. Sometimes that means getting in contact with the sponsor directly rather than trying to negotiate via the CRO.
  • OVERSIGHT: Consider who is best able to ensure alignment between operational requirements, the budget and the contract. It is best if someone can have awareness and oversight of all three. 
  • DETAILS: Expand and/or add budget line items as much as needed to capture and justify all costs. For example, rather than accepting a single dollar amount for a visit, list out all of the activities for that visit and their cost.
  • MAXIMIZE: Many sites leave money on the table because they miss items that should be added to the budget. Consider all protocol requirements (oversight helps with this) and make sure they are all accounted for in the budget.
  • TIP! SCRS has developed a great toolkit for sites with a Site Invoiceables Toolkit and an Invoiceables Calculation Spreadsheet. 
 

Example Highlighting the Need to Detail and Maximize

A procedural example might be a study-required colonoscopy. A naïve person negotiating a budget might miss that this includes both a technical and provider component, needs to include anesthesia charges and a pregnancy test, if appropriate, as well as any safety labs required prior to the procedure needing to be processed locally. The study might request biopsies to be processed and read on site as well as samples sent to a central lab. A naïve budget negotiator may not include the CRC time elements for coordinating the visits for and with the subject, and for making sure the samples are processed, collected and shipped to the central lab, all of which can have a dramatic impact on covering costs, especially if the enrollment volume is high.

Mindset Shift Around Negotiations

WCG data from 2022 shows that final budgets are on average 30-50% higher than starting budgets. What is the purpose of all this hardball negotiating? How much effort is wasted in the negotiation process, and how much money does that actually save the sponsor/CRO? 

Many sites are just trying to cover their costs. Depending on the therapy area, research is rarely a profitable business for sites. Higher starting budgets or a willingness to increase budgets more easily would reduce negotiation times. A more collaborative approach to negotiation would benefit all stakeholders. Startup times would be shorter, which would ultimately lead to earlier FDA approvals. 

WE ALL WANT TO WIN in this process! What do we need to do as an industry?

  • Build better collaboration: Remember, we are not adversaries, our end goal is the same
  • Sponsors/CROs should offer higher starting budgets
  • Consider time savings compared to budget savings—which is more important in the long run?

A common theme at Research Revolution and across other professional venues is the importance of research financials. The lack of awareness in this area highlights the need to work on education and awareness. The status quo for research budget negotiation is slowing the progress of clinical trial startup, which is delaying clinical trials and FDA submission of investigational product, especially as clinical trials become more complex. 

Watch the 2023 Research Revolution session, Budgets & Contracts Reimagined: Turbocharging Study Startup, on demand for more tips for improving your budget and contract process.


Contributors:

  • Susan Mauermann, Clinical Trial Budget and Start-up Specialist, Medical College of Wisconsin
  • Tyler Payne, CEO, Peak Vascular Access, and Board Advisor, UpTrials
  • Wes Warren, Sr. Director, Enterprise Research Contracting, City of Hope
  • Andrea Bastek, VP of Innovations, Florence Healthcare

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