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 Research

Inclusion / Exclusion Research

Vitals 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

to be paid for procedures completed including

coordinator & PI time plus 30% overhead

IRB fee - continuing review (overhead

exempt) $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?