Secrets to Negotiating Trial Budgets and Compensating PIs – Q&A

Al Peters
President, BlueTheory Clinical Trials
May 26th, 2016

As a follow up to his recent webinar, “Secrets to Negotiating Trial Budgets and Compensating Primary Investigators,” Al Peters, President of BlueTheory Clinical Trials, provides answers to attendee questions.

 

Does the Principal Investigator (PI) payment guide hold true for private practice physicians?

 

At BlueTheory we use the PI payment structure in a private practice setting. Our providers are set up as subcontractors. They are paid directly from the entity that owns the Research Facility, and receive a 1099. We do recommend a quick review from your attorney to confirm if there are any local regulations or conflicts with current employment contracts.

 

Does your network negotiate a master contract for multiple sites involved in a study, or do you negotiate individual contract agreements for each site? Pros/Cons?

 

Under our Financial Management Service, our team negotiates site-specific contracts for each site. Each site has a specific geographic area and site-specific contract requirements that need to be incorporated into their MSA (e.g.; insurance limits, special indemnification language, site infrastructure, etc.). However, for sites in our Prime Network (integrated/ site owned network), we do negotiate one MSA as all of the sites have the same requirements and legal components. With the Prime Network, the one contract allows for some additional negotiation strength.

 

Does your screen failure ratio match the rate listed on the initial feasibility? How do you manage budget increases?

 

No, our projected screen failure ratio provided with the initial feasibility questionnaire is a projection based on the information we have on-hand, which typically does not include the finalized protocol. Once we receive the final protocol, we re-evaluate our screen failure request based on the finalized inclusion/exclusion and total visits/procedures that we are required to complete per the protocol. If there is an amendment to the protocol, which increases or decreases the procedures included in any of the screen failure visits, we would request a change in the screen failure amount to match the revised procedural reimbursement. Additionally, we always re-negotiate our Screen Failure rate if the actual ratio appears to be higher once enrollment begins.

 

In regards to invoices/site payments, do you discuss a turn-around timeframe with sponsors upfront? Do you ever charge for additional follow-up or continued invoicing?

 

Yes, the frequency of payments is always addressed upfront. We aggressively negotiate for monthly payments. Currently, we do not charge a “late fee” but many sites do try and include this into their contract. It is very reasonable to request a late fee penalty for any payments received past a pre-determined timeframe. The approval rate of this fee may vary at the sponsor level.

 

What is the industry standard for holdbacks?

 

We see between 5%-10% as the industry standard. However, make sure the holdback only applies to the patient visits and not the pass through items or screen failures. Also, you can request a cap on the holdback amount.

 

How do you respond to a sponsor’s denial of IND review, audit fee, etc., when you are told they do not pay for these items because they are not FDA requirements?

 

I would explain that the consenting time (and many other procedures) is an FDA/ ICH GCP requirement and these are reimbursable expenses. We always explain that there is a significant amount of time and resources associated with fully reviewing the IND safety report (PI review, signing, regulatory filing, etc.) and meeting with the auditors. These items are not covered in the per-patient budget and impact additional site resources and utilization of staff at the site. Therefore, the site should be reimbursed for these items. Also, you can ask that “not for cause” FDA audits be covered, these are at no fault of the site but are specific to the individual study.

 

How do you negotiate unforeseen expenses that appear after the study starts when a sponsor is adamant that the costs in the initial contract are firm?

 

We always reach out directly to the Project Manager and explain in detail the reason for the request. If still denied, we routinely ask for a meeting with the sponsor directly to discuss the expenses. We find that most reasonable requests, if communicated correctly, are awarded. However, if the request was denied, and we were exposed to losing profitability as a site, we would potentially close out the study at our site.

 

How do you respond when a sponsor states, “this is the cost of doing business” and refuses to cover the cost of a fee?

 

Respectfully explain in detail how the request is outside of the “cost of doing business” and directly tied to labor time needed to properly conduct their study. Also, explain that the frequency of occurrence for each is completely out of the sites’ control (i.e.; re-consent, unscheduled visits, SAEs, Protocol Amendments, etc.), and the labor time needed to appropriately process each increases with each occurrence.

 

How much should we ask for a re-consenting fee? Should we ask for the same amount as the Informed Consent?

 

Start by requesting more than the amount of the consent procedure. If the re-consent is being conducted in conjunction with a scheduled visit, request the amount of the consent procedure, plus your OH amount. If the re-consent is conducted at an unscheduled visit, request the stipend, OH and any P.I./CRC time in addition to the consent procedure.

 

We are often seeing remote monitoring visits, how would you charge for these visits?

 

Request either an hourly rate or a fixed amount per occurrence.

 

What site activities can constitute “Pharmacy set-up fee”?

 

Drafting the accountability logs, training the CRC & PI, maintaining local licenses, closeout and destruction (if applicable).

 

What would you estimate as an appropriate sponsor/FDA audit fee?

 

Establish a daily rate for both types of audits to cover the PI & CRCs time needed for the audit. A daily rate usually works best as many FDA audits can be extended for significant amounts of time. You can start with a daily rate request of $1,500-$2,000.

 

Some sponsors are now requesting data retention for 25 years. This imposes a big expense to the site. What is your rationale to get reimbursed for this expense?

 

Include this fee under the archiving fee. Calculate the actual projected expense to store the data and add it to your archiving fee. It may help to also draft a detailed letter that outlines this expense and shows the calculation as justification.

 

How can I respond to push back from a sponsor who resists going to monthly payment schedules, citing that they want to keep all sites on the same schedule?

 

Be firm with this item and request immediate escalation to the sponsor. Give a clear explanation regarding how much of a burden this is for the site/institution. Explain that you pay your expenses on a weekly or bi-weekly basis and therefore need to be reimbursed in a timely manner to avoid significant issues with cash flow. Some of these expenses include: payroll, stipend, study supplies and OH expenses.

Learn More

Want to learn more about negotiating trial budgets and compensation techniques? Watch our free on-demand webinar “Secrets to Negotiating Trial budgets and Compensating Primary Investigators.”

On-Demand Webinar: Secrets to Negotiating Trial Budgets and Compensating Primary Investigators

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1 Comment

One thought on “Secrets to Negotiating Trial Budgets and Compensating PIs – Q&A

  1. How do you keep up with fair market value of principal investigators and study coordinators and research nurses and pharmacist compensations.
    Any clinical research market based information sources you could recommend ?

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