Budgeting for Industry Sponsored Clinical Research Sarah Bernardo Senior Financial Analyst, MCA Specialist Partners Clinical Trials Office
Elements of Successful Budgeting Analyze research or protocol activities Delineate usual and customary care from research Comply with federal & state laws for clinical trial billing Institutional considerations Pricing Direct and indirect costs Clinical research / trial agreement Policies, processes, contacts and resources Negotiation PI-initiated Company-initiated
Direct Costs Costs specific to a sponsored project, may include: Salary and fringe for investigators and other research professionals (clinical research coordinator/nurse, statistician, co-investigator) Procedure costs (x-rays, lab tests) Supplies Advertising Pharmacy costs
Indirect Costs Costs incurred for common or joint objectives not identified specifically with a particular project Research administration Legal/financial review for sponsored agreements General accounting IDC for industry sponsored clinical trials at Partners is 30% TDC Obtain institutional policies regarding eligibility for clinical trial indirect rates and details regarding application
Example: Sponsor offer is $4K per patient including overhead and IRB fee Screening - $700 2 week, 6 mo, 9 mo, 12 mo - $275 3 mo and 15 mo - $1100 How to evaluate a sponsor proposal?
Identify Research Activities Create billing grid from study schedule Follow federal and local guidelines governing billing on clinical trials Medicare Clinical Trial Policy (CTP) local and national coverage decisions to identify items to be billed to patient s insurance Understand institutional policies/processes regarding research billing compliance as applicable
Medicare Clinical Trial Policy Only allows coverage of routine costs during a qualifying clinical trial Conventional care Detection, prevention and treatment of complications Administration of investigational item Medicare will not cover routine costs that are: Paid for by the research sponsor (double billing) Promised free in the informed consent Not ordinarily covered by Medicare Solely to determine trial eligibility or for data collection/analysis https://www.cms.gov/clinicaltrialpolicies/
Identify Research Activity Procedure Screening 2 wks 3 mo 6 mo 9 mo 12 mo 15 mo Informed consent Research Inclusion / Exclusion Research Vitals UCC Randomization Research Physical exam UCC UCC UCC UCC UCC UCC UCC Pregnancy test Research TTE complete UCC Research UCC Research IND Research Research Research Research Research Research IND administration UCC UCC UCC UCC UCC UCC Adverse events Research Research Research Research Research Research Concomitant meds Research Research Research Research Research Research Research SF 36 Research Research Research Research Research Research Research
Per patient - fixed Fixed costs for every subject to complete each portion of the trial Industry trials generally paid by visits completed Company initiated trials typically pay by completed electronic case report forms Obtain institutional research rates for research ancillary items/services and consider inflation and length of study Estimate time for staff related procedures, factor in appropriate salary/fringe
Price Out Ancillaries Hard costs: Identify CPT code(s) for each identified research ancillary procedure (consult with ancillary department billing contacts to identify accurate codes as needed) Obtain institutional research rates (including professional fees for tests requiring a read) Account for inflation
Internal Pricing FY17 Full tech fee FY17 Research tech rate FY17 Full pro fee FY17 Total cost FY18 Inflation FY19 Year 2 TTE Complete $1,533 $436 $249 $685 $719 $755 Serum pregnancy $172 $37 $37 $39
Build in Ancillary Costs Procedure Screening 2 wks 3 mo 6 mo 9 mo 12 mo 15 mo Informed consent Inclusion / Exclusion Vitals Research Research UCC Randomization Research Physical exam UCC UCC UCC UCC UCC UCC UCC Pregnancy test $65 TTE UCC $775 UCC $800 IND Research Research Research Research Research Research IND administration UCC UCC UCC UCC UCC UCC Adverse events Research Research Research Research Research Research Concomitant meds Research Research Research Research Research Research Research SF 36 Research Research Research Research Research Research Research
Staff time and other fixed patient costs Staff reimbursement: For each research non-ancillary procedure directly related to the patient, identify who performs and how long does it take? Determine hourly salary and include institutional fringe Assign estimates for reimbursement Fixed patient study costs: Parking Room Charges
Staff & Other Costs Procedure Screening 2 wks 3 mo 6 mo 9 mo 12 mo 15 mo Total Informed consent $100 $100 Inclusion / Exclusion $50 $50 Vitals UCC 0 Randomization $50 $50 Physical exam UCC UCC UCC UCC UCC UCC UCC 0 Pregnancy test $65 $65 TTE complete UCC $775 UCC $800 $1,575 IND sponsor sponsor sponsor sponsor sponsor sponsor 0 IND administration UCC UCC UCC UCC UCC UCC 0 Adverse events $50 $50 $50 $50 $50 $50 $300 Concomitant meds $50 $50 $50 $50 $50 $50 $50 $350 SF 36 $40 $40 $40 $40 $40 $40 $40 $280 Patient parking $25 $25 $25 $25 $25 $25 $25 $175 Coordinator - crf completion, scheduling, administrative mgmt $150 $125 $125 $125 $125 $125 $150 $925 PI - crf signoff, study oversight, clinical mgmt of patients study related $175 $150 $150 $150 $150 $150 $175 $1,100 Subtotal $655 $490 $1,215 $440 $440 $440 $1,290 $4,970
Apply Indirects Procedure Screening 2 wks 3 mo 6 mo 9 mo 12 mo 15 mo Total Informed consent $100 $100 Inclusion / Exclusion $50 $50 Vitals UCC 0 Randomization $50 $50 Physical exam UCC UCC UCC UCC UCC UCC UCC 0 Pregnancy test $65 $65 TTE complete UCC $775 UCC $800 $1,575 IND sponsor sponsor sponsor sponsor sponsor sponsor 0 IND administration UCC UCC UCC UCC UCC UCC 0 Adverse events $50 $50 $50 $50 $50 $50 $300 Concomitant meds $50 $50 $50 $50 $50 $50 $50 $350 SF 36 $40 $40 $40 $40 $40 $40 $40 $280 Patient parking $25 $25 $25 $25 $25 $25 $25 $175 Coordinator - crf completion, scheduling, administrative mgmt $150 $125 $125 $125 $125 $125 $150 $925 PI - crf signoff, study oversight, clinical mgmt of patients study related $175 $150 $150 $150 $150 $150 $175 $1,100 Subtotal $655 $490 $1,215 $440 $440 $440 $1,290 $4,970 Overhead @ 30% $197 $147 $365 $132 $132 $132 $387 $1,491 Total $852 $637 $1,580 $572 $572 $572 $1,677 $6,461
Per Patient - Variable Screen fail terms Price of full screening visit including IDC Watch/negotiate proposed ratios % of screening visits Subject travel reimbursement (airfare, lodging, meals) SAE reports Sub-studies
Study Costs Fixed & Variable Administrative Start-Up (IRB submission, initial study team meetings) IRB fees initial, continuing reviews Clinical Trial Office fee Pharmacy Advertising Storage Monitor Visits
Sample Language Non-refundable one time fees (payable upon contract execution) IRB fee initial (overhead exempt) $3,500 Administrative Start-up $5,000 Medicare Coverage Analysis (overhead exempt) $1,500 Clinical Trial Office Fee (overhead exempt) $5,000 Invoiceable charges (invoiced and paid quarterly) Advertising $4,000 Screen fails IRB fee - continuing review (overhead exempt) to be paid for procedures completed including coordinator & PI time plus 30% overhead $1,000 per Pharmacy charges $2,000 SAE reports $200 per
Importance of the Clinical Research Agreement Budget is tied to the agreement Term and termination Compensation and Budget Exhibits Provision of drug/device/equipment Deliverables tied to payment triggers Importance of payment terms and language
Compliance Issues Industry Fair Market Value (FMV) - Exchange of services rendered (contract deliverables) vs. reimbursement received (budget) Don t go above list price for services Cannot accept sponsor reimbursement for any item/service billed to insurance double billing Be aware of institutional payment policies regarding incentive (i.e. no incentive payments tied to specified enrollment within a certain timeframe or bonus payments after certain # of payments received) inclusion of pro-rated language
Company initiated Company generates contract/budget proposal, distributes protocol/consent Usually large multi-center studies Selects investigators and sites for participation Contract and budget negotiation after contract distributed to sites Payment by automated crf for patient costs, invoice for variable costs 10-20% withhold of subject payments common until final datalock and resolution May use CRO for negotiation
PI initiated PI generates budget estimates Pitches proposals to companies Negotiation prior to contracting Deliverables may include submission of final manuscript as trigger for final payment Generally fewer automatic payments, more invoicing based on payment milestones Single center vs multi-center. If multi-center, be sure to understand how institutional IDC policy affects subcontract costs, other work related to the trial (i.e. protocol development, core labs, etc.) Contact institutional budget approval contacts for review prior to sponsor submission
Negotiation Tips Good deals can take time and effort Always try to negotiate Consider fiscal health of your study - work to negotiate a budget that will cover your anticipated costs If you are not covering your costs approach the sponsor for amendments Provide justification for your costs - sponsors may want copies of policies or costs to document Review all financial language carefully When in doubt, contact your assigned CTO FA
Questions?