Negotiating Clinical Trial Agreements – FAQs

By Gina Robles | Site Relationship Manager, PharmaSeek Financial Services
July 15th, 2013

Summary: Gina Robles of PharmaSeek Financial Services, answers questions from her recent webinar on dissecting the clinical trial agreement.

Estimated reading time: 3 minutes

We had a great response to our June webinar on the topic of clinical trial agreements. As a follow up, here are answers to some of the questions asked during the presentation.

Q: How do you approach a sponsor about changes to fees (annual increases) and addition of new fees? Sponsors look at previous contracts expecting to have the same costs from year to year.

A: I don’t frequently see sponsors referencing a contract for a separate study in the negotiation, but sites can definitely use a previous clinical trial agreement in their favor. As I mentioned in the webinar, providing justification puts you in a better negotiating position. Point out how many years have gone by and calculate the purchasing power of our dollar over time (there are free online ‘inflation calculators’ that will do this for you). With the passage of time, you are likely paying more for space, staff, utilities, etc. to run a trial, and the sponsor must recognize this.  Identify specific financial pain points your site suffered on the last study you conducted for that particular sponsor. For example, if you had several SAEs that were not reimbursed for, cite that number and calculate the amount of hours that your staff spent filing SAEs, and appropriately state that you can’t agree to a scenario which puts you at risk to experience these losses again.

Q: Should we include overhead for invoiced advertising, recruitment and IRB fees?

A: No, we do not want to include overhead on these items. However, be sure to include overhead on procedural fees that may not occur with every subject (e.g. PK draws, additional scans or labs) and especially additional visits that may not be required of every subject.

Q: We have been successful at adding invoiceable items such as $XX per IND safety report submitted to IRB to recoup costs that are not patient visit related.  Some sponsors refuse to pay these things because they claim it is part of doing the study per FDA regulations.  How do you suggest we get paid for non-patient related costs that take a lot of time to complete?

A: I like to point out that these items are not the cost of doing business for the site, but rather for the sponsor, who will inevitably profit from the investigational item if it makes it to market. If the sponsor is refusing to pay for the IND safety report review or other similar “non patient visit related” fees, add those anticipated costs to your coordinator and PI fee.  If the sponsor then points out that your coordinator or PI fee is too high, detail the procedures you included to calculate that time and amount. This detail will include clinical procedures, but also several items that are not patient visit related. State that you would be happy to have those separated and invoiceable, but that you have to be paid for these items somewhere in the budget.  In addition, be sure to point out that while the process of assessing things like IND Safety Reports, SAEs, Protocol Amendments, etc. may be FDA-mandated, your actions in all of these cases are protocol/study-specific.

Q: There is a significant disincentive for prompt enrollment and timely completion of the target number of subjects, as 10-20% of earnings may be held for months or years before the database is locked.  How can this be avoided?

A: Always try to eliminate or reduce holdback.  Remember you can get creative and request a monetary cap or time limit. Also try to negotiate the holdback to be released when the data is locked at your site, versus study wide. Strike language that refers to data lock for the entire study, and insert verbiage along the lines of “with final payment payable upon Institution completion of all obligations under this Agreement and any exhibits thereto.”

Q: Months may go by with no queries and then many are received with short deadlines.  What statement can be made in the clinical trial agreement to avoid this?

A: Usually sponsors require deadlines for the resolution of queries. During your contract negotiation, give the sponsor a similar deadline in regards to data review. For example, “Payment shall be made upon Sponsor’s review and approval of all Case Report Forms submitted, which shall occur no more than ten (10) business days after submission of Case Report Forms.” If delays have happened in the past with certain sponsors, be sure to note that as strong reasoning for such a deadline.

Q: What can you do to prevent the sponsor from sending you unitemized payments?

A:  Unfortunately, not much. The sponsor usually has a process in place with their accounts payable department that is sending you the check. However you can request this information from your accounting contact at the sponsor when you receive the check and they almost always have a breakdown of what you are getting paid for.

Q: Can you charge interest on late payments?

A: If the sponsor approves this in writing in your clinical trial agreement, yes! However, it is very unlikely that a Sponsor will approve such an item. If you know a sponsor or CRO is notorious for doling out late payments, request it.

 

 

About the Author

Gina is a Site Relationship Manager with the Strategic Site Operations team at PharmaSeek Financial Services.  In her role, she assists research sites with study start-up operations, including feasibility coordination, budget and contract negotiation, and regulatory submissions. She has overseen the initiation of trials for wide variety of institutions ranging from private practices to large healthcare networks.  Questions?  Email Gina at grobles@pharmaseek.com.

Website: PharmaSeek Financial Services

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