If you have managed or currently manage a clinical study budget you have likely heard the following questions or statements from your finance teams or senior management: Why are investigator fees so much higher than originally planned? What do you mean we have another unplanned CRO change order? Many different drivers contribute to actual clinical study budgets being much higher or lower than originally planned – some may be inevitable and some within our control. On this week’s video, we discuss the most expensive cost categories in a clinical study budget and the top tips that will have the biggest impact in our clinical study budgets.
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Video Transcript (verbatim):
Hi everyone and welcome to another episode of ClinBiz where we love connecting with you on the business aspects of clinical trials. On today’s episode, we like to talk to you a little bit about some tips on how to better manage your clinical study budgets. So we all know it’s one of those topics in our industry it’s always a hot item, right? Finance is always asking, why are we over, are we under in terms of clinical operations so it’s always a hot topic that inevitably we always come to the same conclusion that we were not able to– we’re not really sure what has thrown our budget out of the water or things were outside of our control, right. But really there’s some realistic ways or some practical ways that we can do to better manage our clinical study budgets. And so I just like to talk to you a little bit about that today.
So when we look at a clinical study budget you know specifically from the sponsor styling I’m going to be speaking out you know, we look at and we see there’s two major areas, two major categories that really take up the majority of our clinical study budgets. Those being investigator fees and CRO costs, right. And some organizations some you know CRO costs can be a little bit higher depending on what the outsourcing strategy is or what-have-you. But those are the two main ones. Investigator fees can be anywhere from 40 to 60% of your clinical study budget. Your CRO cost can also again fluctuate by being the second highest or in some organizations can even be the highest depending again on the outsourcing strategy used. But when we’re looking at these you know your study budgets then you’re thinking you know what are the areas that I can really tackle to have the biggest impact and that would be investigator fees and CRO costs.
So let’s talk about some practical things we can do starting with investigator fees things that
we can do to actually better manage our study budgets within this area of investigator fees some practical things to do. So one of the things that you know I’ve noticed that happens many times
throughout the years is that we end up planning our budget planning cycles or when planning for our studies, we end up planning scenarios that are very different from what we actually and that actually end up happening, right. And investigator fees is no different. So the one big area that I’ll say that you can concentrate today and have some practical and major impact within your organization is, when you’re planning for investigator fees, number one, think about the breakdown of your type of sites. Your academic versus your non-academic sites within the US. For outside of the US you know you’re talking about hospitals or some private practices. So thinking about the type of sites that you’re actually going to be allocating and going to the negotiating when you’re actually—but when you’re actually planning your study budgets is very important thinking about the breakdown in terms of percentage and the types of sites. And why is that important? So let’s say for it in the US you know some academic versus non-academic sites.
Well, if you are budget planning for your investigator fees to be based on smaller
sites or private practice sites well, you’re probably estimating some much lower startup fees, right, which they traditionally have some lower startup fees so maybe you’re estimating two, $3,000 $4,000 for your startup fees for your sites and let’s say you have 100 sites in your study, right. So that’s one number and that’s what you’re planning your budget but then when you’re actually—the time you’re actually allocating the sites in your you know for your study
you start going to more academic sites let’s say which the startup fees can be much higher than that you know it could be anywhere from much let’s just say much higher than three, $4000, right. It can go upwards of 15,16, some sites even more. So it’s very important for you to have a good estimation during your budget planning on the type of sites that you’re going to and then having that breakdown. Well, are you going to be going 80% towards academic sites and 20% for private practices or non-academic sites or is it going to be flipped? Because that could be very,
very different scenario, right. And that can completely throw your budget out of the water when you start going to some academic sites or some of the larger sites. There’s larger startup fees, there’s larger overheads many times, and there’s other fees actually associated with things. So you need to be thinking clearly on what type of sites you’re going to be onto and plan that with your budget otherwise you’re always going to be a little bit off or a lot off right when you’re actually starting going in these sites and having those costs come in.
The other piece of an investigator fees it’s very important for you to concentrate in again your budget planning stage is to think about what is the breakdown in percentage? First of all, what are the high variable costs? And by that I mean things like MRIs and CT scans or overnight stays, hospital stays overall, patient travel reimbursement. So thinking about those things that may or may not happen but when they do happen they’re a big cost, right. And you need to think about that first to identify which ones those are and some of them of course are driven by your protocol but some of them may not be.
And then the other thing you need to think about is what is the realistic see that it may happen or at least give a good a robust estimation in your budget planning for those type of items. But what ends up happening in a lot of organizations is that we forget to include those variable items early on in our budget planning stage. And we really only see them during the negotiation or even after negotiation when the study is actually happening. And then a lot of you know these variable costs are coming in and they are not easily sometimes tracked in larger organizations, they may not be easily identifiable. Well, what’s
throwing these investigator fees show off? Well, it may be that you are really not planning to have a lot of these high cost variable items happening and they actually are in your study, right.
So when you go for your investigator fees, there’s those two very practical. Looks very basic but will have a huge impact on your investigator fees within your clinical study budgets if you do those two things. The other one is CRO costs. So again there’s that things you know a question or a comment or statement within organizations that say you know where did this change order
come from, right? There’s always an unplanned change order inevitably in every organization with the CRO worth or vendor, right. And so what are some practical things we can do to minimize the time that actually happens or are addressed these types of issues early on? So one thing I think I can recommend is that especially for organizations that don’t have these
things set up already is doing your RFP or a Request For a Proposal time. The time you’re reaching out to your CEOs for their proposals to do your study that first of all that you have developed your own spec document and budget printer, right. Your own type of template however that may look like. It may be a template, it may be a tool, whatever you’re using. But it needs to be your very own in your format type of budget grid, right. So you’re going out with your specification documents hopefully that’s already something that’s unique to you but then
you’re also including tip for the CRO to actually plug in their costs in their proposal within your own budget grid format or budget grid type of template. This is super important why because
you’re actually going to be able to compare apples to apples across your different CROs that are providing those proposals number one. You’re also going to be able to see much clearly if things were missed or tasks were missed and things are going to just be easier for you as a sponsor to identify better what was there, what was not.
Also, take this opportunity to actually ask for you know, the feedback in your own inner CROs during that negotiation time, during the time they’re really trying to get your business is getting feedback from them because they’re supposed to be the experts in that area is are we missing anything from the spec document? Is there any other tasks needed, right? Make sure everything is included there and then again all the different CROs are bidding on that same type of robust task or specification documents but then that they’re also providing the budget proposal or whatever it’s going to cost in your own type of templates. Very important even if you just develop it in-house, it’s very important for you to develop your own type of template this will save you hours of time in actually comparison and it will give you a clearer picture of who has everything
included in there who has not, right?
So that’s one big thing and make sure one thing I suggest if you’re able to do that you know during those negotiations times again that’s the time to negotiate is right before you’re actually awarding someone. So just to make sure that it’s seen this is possible especially if you’re a smaller organization and you don’t have any preferred or strategic type of contracts are ready with your CROs. See if it’s possibly they include some kind of language to take responsibility in the event that they have missed any costs in that initial proposal. Because again you know
sometimes it’s not done you know in bad faith or anything it’s just simply people miss things but we’ve seen many times, right.
This happened in different organizations that you know later on
after things that are awarded, the CRO where the vendor comes in the lower cost, the team goes with that lower cost vendor and then you know three months later they come back and they say, oops, we missed something in that initial proposal. Here it is and this is how much it’s going to cost. And all of a sudden you’re like why didn’t you tell me this before? I would have gone with someone else, right. And so it’s very important that because that really creates the accountability from both ends is to make sure that early on all the tasks have been included, right. That the sponsor is not coming later and asking for some additional things. And then that it’s included everything they could possibly estimate at that point and that the CRO in this case or any vendor really is giving their best, they’re really their best expertise in the area and providing that information and providing the costs really that are robust for that study and not you know later bringing something in that shouldn’t have been there. And so ensure that those things are added there if you’re able to add that type of language in.
There the second thing is make sure for the sponsor that you’re really, really making sure that every task that you want anything that you want that CRO to possibly do is really included in
that beginning contract, in that beginning proposal. Because just negotiation one-on-one. You have the biggest leverage for both parties really you have the biggest leverage during the negotiation not after, right? So any discounts that you might be getting any cost savings
that you might be getting from your CRO the likelihood is that they’re going to be giving the best that they can at that beginning stage if later you’re trying to ask service to say well, later if we need and we just start adding things and you know we’ll think about that later. Of course things come up that we didn’t plan but make sure that you do your best due diligence to include anything you can in that initial document. It’s really going to be the time to get the biggest savings and you’re really you know if you’re adding these things these services later you’re really not getting the best that you can for your money, right. So make sure that you have included that.
So there you have it, some practical tips you can do in your organization today to make sure
that you’re better managing your clinical study budgets. If you like this video, make sure you share with others, make sure if you have someone that you think may be helped by this video make sure you share with them as well and head over to our website at clinbiz.com and subscribe to our newsletter because that’s the way you’re going to be notified first of when any new videos come and we’re also going to be having some great news coming up in the next few weeks that you don’t want to miss any one of these come notified we’re that’s newsletter there’s going to
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