BUDGETING THE INDUSTRY-SPONSORED CLINICAL

RESEARCH STUDY

Carolyn White, Manager, Study Coord & Conduct Unit

Center for the Advancement of Clinical Research (CACR)

Heather Offhaus, Director

Medical School Grants Office

Objective:

To learn the fundamentals of preparing a clinical trial budget

Developing and Negotiating Successful Study Budgets

• U-M research community provides important resources to help you

–Departmental Mentoring–Department Res. Grants Admin.–Medical School Grants Office–DRDA Seminars

• Successful budgeting is definitely an art refined by experience

Read the Protocol

• Identify items that will generate expenses for the site– Number & complexity of subject visits– Estimated time required for study visits– Procedures to be performed– Difficulty of meeting Inclusion/Exclusion

criteria– Staffing needs for duration of study

Determine Recruitment Potential

• What is a reasonable and realistic accrual goal?– What measures are necessary to reach the

desired subject population?– How many subjects must be screened to

identify an eligible participant?– What is the recruitment time frame?

Clinical Budget Concepts:

• Must cover all costs

• Needs to be somewhat flexible

• If not in budget, sponsor is not obligated to pay

Clinical Trial Budget Categories

Fixed Budget

Competitive Bid

Site Budget Proposal

Offered by sponsor or

CRO

Site submits proposal to

sponsor in site selection process

Site submits to sponsor without pre-determined

budget limits

Categorize Budget Items

• Fixed and Up-Front Costs– Are needed for

study conduct and incurred whether or not a subject is enrolled.

• Costs Related to Subject Visits– Sponsor

proposals usually link all budget items directly to patient visits.

DISCLAIMER!!!

• We will talk through many types of charges

• We will offer many ways of looking at things

• BUT, this is not the exhaustive list! Many items are protocol specific with hundreds of possibilities!

Determine Universal Costs for Study Conduct

• What institutional approvals are needed?

• Are fees charged?

• Determine institutional Indirect Cost rate

Plan for Study Start-Up Costs

• Costs for preparation of informed consent document and applications

• IRB Fee - $1800• GCRC Administrative Fee - $750• IDS Study Start-up Fee - $1150• Advertising

**above fees charged whether or not patients are accrued

Indirect Cost Recovery (aka Facility & Administrative charges or Overhead)

• Determine correct rate to use on your study

• Call Me!!! Contact: MSA Grants Office, Heather Offhaus 763-4272.

These are a real cost to the university

Salary Support for the Research Team

• Investigator • Co-Investigators • Study Coordinator• Office Personnel • Technical Support• Laboratory Staff• Professional/Consultant Fees

** Don’t forget Fringe Benefits for each!

Study Maintenance Costs

• Continuing regulatory reporting

• Maintaining Investigator binders/files

• Staff training needs

• Research team meetings

• Study communications

• Sponsor monitoring visits

• Adverse Events reporting

Data Collection & Subject Maintenance Costs

• Case report forms completion• Scheduling for visits, tests/scans• IDS study article dispensing/

accounting• Subject payments• Telephone contacts• Data query resolution

UM Resources Utilization

• GCRC Outpatient Clinic• M-Labs vs. Central Laboratory• Photocopying• Freezers, dry ice, special equipment• Committee review of devices,

radioisotopes, or gene-transfer material

Consider “Hidden” Study Costs

Delayed start Informed consent processIncreased salaries & operating costs

over timeTravel to offsite clinics

More “Hidden” Study Costs

Unscheduled visits Overhead costs for “a la carte” or

one-time procedures Tracking study fundsAudits

Consider Closing Costs

Don’t forget –Don’t forget –

Closing costs occur AFTER subjects complete study and BEFORE contract ends

– Query resolution to close database– Sponsor’s close-out visit– Pharmacy close-out– IRB termination– Long-term storage of research records

Potentially Unallowable Costs:

• Dependent on

–State law–Michigan contracting policy

• Includes:–Finder’s fees/Referral fees–Enrollment incentives–Paperwork completion incentives

Now What?

You’ve cost out your entire protocolYou’ve identified every dollar you

will need to do the studyYou’ve reread the protocol

You’re ready to negotiate a budget!

Revisit: Clinical Trial Budget Categories

Fixed Budget

Competitive Bid

Site Budget Proposal

Offered by sponsor or

CRO

Site submits proposal to

sponsor in site selection process

Site submits to sponsor without pre-determined

budget limits

Fixed Costs v. Subject Dependent Costs

• The payment schedule must be appropriate for recovering costs as they are incurred

• Negotiate non-recurring costs as “fixed” and not patient based

• Be aware of milestones set for release of study funds…

Build a Payment Schedule & Budget You Can “Live With”

• Recover cost of screen failures and study drop-outs

• Include provisions for sponsor support for extra procedures or variable cost items

Build a Payment Schedule & Budget You Can “Live With”

Consider asking for Total Costs in your payment schedule

– Instead of $500 for a routine visit, ask $625– Don’t break out the indirect costs at the

bottom of the schedule

For Competitive Bids:

For Sponsor or CRO Proposed Budgets:

If the contract is drafted by sponsor, it is probably to the sponsor’s benefit!

REMEMBERREMEMBER::

–You CAN negotiate different payment milestones–You CAN ask for additional recovery if what they are offering doesn’t cover your expense

If you think you and sponsor have a budget you agree on:

Ask: Is the research effort and scientific contribution worth the budget cost vs. recovery from sponsor?

This May Not be the Final Budget!

Understand that this may not be “cased closed” and final– Needs agreement by your department,

school, and university

Institutional agreement is only given by DRDA, not by any faculty member…

Routing Information

• What?– PAF, study budget, internal budget, draft contract, and

protocol

• When?– After the study budget is agreed to by both you and

the sponsor– Before contract terms are fully negotiated

• Where?– Through your division, department, Medical School,

and DRDA

Routing Hints

• The PAF and internal budget should match the bottom line of the payment schedule (“Contract Worth”)

• If faculty have effort, please quantify on the internal budget

• If the IND/IDE is open & active, indicate status under the Notes section of the PAF

• Estimate a probable maximum number of patients for Per Patient budgets so that you do not have to route for additional patients later

Words to the Wise:Words to the Wise:

Re-Negotiation is an Option

• Even if you are mid-study!

• Increased mid-study workload may justify additional sponsor funding.– Requires routing another PAF for additional

dollars, but worth the recovery

• If sponsor extends the study period, contact DRDA directly for a No-Cost Time Extension (NCTX)

Words to the Wise:Words to the Wise:

Know What’s Going On with Study Funds!

• Track $$ received from sponsor and study expenditures.

• The PI is responsible for study deficits

• Industry studies are not always “money-makers.”

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Contact Information:Contact Information:University of Michigan Medical University of Michigan Medical School AdministrationSchool Administration

The Center for Advancement of Clinical Researchhttp://www.umich.edu/cacr

Medical School Grants Officehttp://www.med.umich.edu/medschool/grants