In July 2015, Jill Shilbauer of PharmaSeek and Jessica Krone of PFS Clinical presented a Forte webinar titled, “Building a Better Budget: What You Need to Know.” Over the course of an hour, they shared tips to avoid common pitfalls in budget creation and ways to increase positive revenue flow. Several questions were posed, but due to time constraints, not all could be answered. Here, Jess and Jill provide answers to some of those questions.
Do you ever include payment detail requirements as part of the CTA? We like to reconcile to our CTMS.
The average offer for start-up to my sites is $2,500. Is there a more appropriate market rate? I seem to only reach $3,500, and our costs really are higher than this (this is not including the line item of pharmacy prep).
The bottom line is: if your costs are higher than $2500, then you should be requesting the actual incurred start-up amount. I recommend having pass-through start-up costs, such as pharmacy, IRB, laboratory, etc., broken down individually. Just be prepared to provide the supporting documentation to the sponsor (on official letterhead or actual invoices) so you can justify the amounts you are requesting and show how that fee is broken down. Your primary study start-up costs should include:
- SIV costs
- Training expenses
- Protocol and ICF review
- All other required documentation preparation
- Source documentation
- Budget/contract/coverage analysis development
- Negotiation costs
- Any other site-specific start-up costs you may incur
The key to getting a higher start-up approved is to have everything broken down, on official letterhead, demonstrating how you calculated that amount, and what is included in your start-up. Provide this to the sponsor/CRO as justification for your costs. Don’t be afraid to push back if they try to low-ball you, and know what you are comfortable accepting ahead of time. You may not get everything you ask for, but hopefully, with this approach, you will have more success than you currently do at negotiating your start-up fees.
Are invoiceable items (excluding patient & travel reimbursement) normally allowed to have applied overhead?
This is all good stuff but, in my experience, I often give all the line items to a sponsor, and they decline. Many times they adopt a “take it or leave it” attitude and I struggle to negotiate. Do you really have success in your plan?
This is a great question, and it prompted me to calculate our average percent increase for budget clients. Looking at the tracked negotiation data, I calculated an 83% increase from initial offer to final acceptance per patient budget. There are typically multiple rounds of negotiations. We do sometimes have to elevate budget sticking points for sponsor consideration if the CRO is putting up roadblocks during negotiation. I expect to be told things like, “You are our most expensive site,” or “No one else has ever asked for this,” and (my personal favorite) “I have never seen this cost before and have never approved it” (regarding common requests like audit, IRB, or close-out fees).
My advice is to gauge how serious they are about dropping your site. Usually this is an empty threat used to frighten sites into acquiescing to budgets that do not support their actual costs. Remember, they have already invested time in your site and PI, and they likely don’t want to start over. At the end of it all, decide if you are truly willing to walk away if they are not willing to play ball. We always push hard in negotiations, and I can honestly say I have never had a site dropped from a study by the sponsor because of budget negotiations. I have had sites that have chosen to walk away from a bad budget when there was no other option and I don’t believe any of them have regretted that decision.
*PFS Clinical has made reasonable efforts to ensure the accuracy of the information contained in this article; however, this article is provided “as is” without any express or implied warranty. This article does not constitute legal advice. If you require legal advice, please consult with your attorney.
Want to learn more about building clinical trial budgets? Watch the full on-demand webinar!