Hidden Costs and Fees: Thorough Budget Negotiation for Clinical Research
When negotiating any clinical study budget with a sponsor, it is easy to stay focused on larger financial items and processes while overlooking costs the site will incur for seemingly insignificant aspects of a study. While these hidden costs and fees appear small, they are important to consider when determining the overall financial aspects of participating in clinical research. Overlooking these expenditures during the negotiation process costs sites significant time and money in the long run.
In the clinical trial start-up phase, research sites are responsible for negotiating a thorough budget, including hidden costs and fees. It is necessary for sites to anticipate these fees ahead of time in order to keep money from being left on the table during the course of the study.
The best way to safeguard your site from lost revenue due to hidden costs and fees is to thoroughly review the study protocol, and then determine each process, task, or item that will be needed to complete the study. Understanding the needs of the study down to the last detail will prepare you for a successful study budget negotiation.
There are many common hidden costs that sponsors and CROs won’t account for on their own. These include, but are not limited to, the following:
- Sponsor specific GCP training
- EDC training
- Site initiation visits
- IND safety reports
- Protocol amendments
- Pharmacy maintenance
Each of these items and tasks come with fees that may seem minute on a case-by-case basis, but add up over time. Take, for example, IND Safety reports. Sites can easily end up with binders upon binders filled with INDs by the time a study concludes. Typically, IND safety report fees reimburse at $35 per report. Not identifying the expenses for those INDs in the study budget will account for thousands of dollars in lost revenue for the site.
Institution expenses are also critical to include in the initial clinical trial budget. Institution expenses are costs directly incurred by the institution during the lifecycle of a trial, and may not be explicitly included in a clinical trial budget provided by the sponsor. There are four general areas of institution expenses to keep a close eye on:
1) Third Parties
Third parties are companies or individuals who provide sites with supplies or services necessary to conduct a clinical trial, such as dry ice vendors, imaging centers, outside physicians, advertisers, etc. As a rule of thumb, always obtain quotes from vendors prior to executing the CTA. For vendors such as dry ice suppliers and outside physicians, estimates are based on price per unit, or prior pricing from similar trials.
2) Medical Supplies
It is surprisingly easy for medical supply costs to slip through the cracks. Things such as ECG machines, freezers, bio-hazard waste containers, sterile gloves, and other replenishable supplies should be added into the budget from the beginning stages of any trial, no matter how small an expense they may seemingly represent. Typically, the supplies and equipment provided by the sponsor are outlined in the CTA and lab manual. Anything outside of these items listed should be included in your budget.
3) Indirect Costs/Overhead
Like any building you own or rent, costs are associated with the structure in which a research site is located. You must maintain the site, first and foremost, and account for expenses like electricity, internet, rent, and taxes. Some of these costs may fluctuate from month to month based on the trial itself, so always try to negotiate towards the high end of these expenses, just in case the costs end up being greater than expected.
Consider also, while it is possible to return to the sponsor for budget renegotiation, the process of justifying these costs to the sponsor can often be an uphill battle. Not to mention, the time and effort spent developing these justifications and presenting them to the sponsor will be another expense to the site in lost time and manpower.
Hidden costs and fees should be taken into account when deciding to participate in a clinical trial. It is important to take a detailed look at the study protocol prior to budget negotiation to ensure that all of your costs are being covered. When you take a deep dive into what these expenses could look like before committing to the trial, you also have the benefit of gaining a deeper understanding of whether the trial will be profitable for your site. A full financial evaluation requires the participation of each department at a site to work together to bridge the gaps between clinical research and finance.