1. VCU RESEARCH EXPO
October 20, 2017
School of Medicine
Office of Research Administration
Pre- to Post-Award: Financial Activation of Clinical Trials Tricia Gibson, MS, CRA, CCRP Executive Director for Research Administration Cindy Naret Associate Director, Clinical Research Administration & Operations
Date

2. Outline of Discussion Background: the drug development business
Building a comprehensive clinical trial budget
Negotiating the budget
Strategy, best practice, and infrastructure
The Budget’s Role in Financial Management
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3. Background: The Drug Development Business
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Background: The Drug Development Business

4. Drug Approvals in the U.S.
It typically takes about 12 years and over $350 million for a drug to go from the laboratory to your medicine cabinet
~3 ½ years pre-clinical testing
Animals and human cells
~1 year for phase 1 clinical trials
~70% of experimental drugs pass through phase 1 testing
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5. Drug Approvals in the U.S.
~2 years for phase 2 clinical trials
~33% complete phase 1 and phase 2 testing
3 years for phase 3 clinical trials
~2 ½ years application for approval, with continued collection of clinical data
5 of 5,000 compounds make it from laboratory to human testing; 1 of these 5 makes it to market
The U.S. pharmaceutical industry invests ~$12 billion annually in new drug development
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6. Office of Research Administration
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7. Types of Clinical Trial Funding
Industry-sponsored clinical trials
Investigator-initiated clinical trials with industry support
Non-industry clinical trials, e.g., federal, foundation, institutionally-supported
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8. Clinical Trials is a Business
Focus on industry-sponsored or supported clinical trials
Industry wants to minimize costs to maximize profit!
Sites that will enroll well (have the patients).
Sites that are efficient.
Sites with high quality data.
Clinical trial sites must ensure that:
The study is a good fit for their site.
Costs are covered to perform the work.
They have efficient and effective processes in place.
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9. Market and Selection of Sites/Studies
The clinical trial market is competitive, among industry sponsors and among research sites.
Sponsors assess our quality as a potential site as compared to other sites.
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10. Feasibility Assessment
We must ask important questions at VCU
to make sure a study is feasible to conduct at our site.
Does the protocol provide scientific value?
Can we recruit subjects?
Can we accomplish the protocol parameters as spelled out for the study?
If we can’t answer yes to all of these questions, then we should probably decline the trial.
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11. Building a Comprehensive Clinical Trial Budget
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Building a Comprehensive Clinical Trial Budget

12. What do we mean by a Comprehensive Budget?
Careful analysis of study requirements and costs that will be incurred by the site to be sure they are paid by the study sponsor.
Developing a budget and financial plan that not only sufficiently covers our site costs, but aids in effective financial management of a study.
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13. Building a Clinical Trial Budget
Documents needed to get started:
Protocol
Protocol Schedule of Events
Sponsor Budget Template
Sponsor Contract
Review the protocol to become familiar with requirements and complexity of the study.
Conduct a coverage analysis.
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14. Building a Clinical Trial Budget
Coverage analysis determination
Determine if a clinical study qualifies for coverage of “routine care” costs in accordance with the requirements of Medicare and the U.S. Patient Protection and Affordable Care Act
Create a billing plan to document the responsible payer, i.e., 3rd party payer or study sponsor, of each study-related item or service.
Coverage Analysis is a critical step in budget development.
It clearly delineates costs that are to be paid for by a study sponsor and included in the clinical trial budget.
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15. Budget Development Defining Costs
Per Subject Costs
Cost associated with the execution of the protocol on a per subject per study visit level.
Costs incurred at the study level, typically associated with overall activation or management of a study, not subject-specific costs.
Protocol Level Costs
Pass-Thru/ Invoiceable Costs
Costs incurred on a per event or as needed basis if a particular event or activity occurs.
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16. Budget Development Per Subject Costs
Two Primary Cost Factors
Personnel time/effort to complete requirements for each study visit.
Clinical or ancillary service provider costs associated with performing research-related items, tests, or procedures required on each study visit.
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17. Budget Development Per Subject Costs
Study personnel could include:
principal investigator, clinical research coordinator, data support, financial management.
Appreciate the scope of work; careful estimates of time for effort to successfully manage the trial are critical to covering costs.
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18. Budget Development Per Subject Costs
Clinical or Ancillary support costs could include:
Hospital, professional, ancillary fees depending on study requirements and providers used.
Visit costs – facility costs.
Study required tests, items, procedures, or services:
Imaging – x-ray, MRI, ultrasound
Pathology – blood draw, analysis, shipping
Biopsy
Cardiology – EKG
Pharmacy - dispensing
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19. Budget Development Protocol Level Costs
Costs incurred at the study level, typically associated with overall activation or management of a study.
Typically fixed unit costs – “flat fee” – to cover the time/effort and any other costs associated with the activity.
Start-up (up-front non-refundable)
Ongoing administration (annual)
Close-out (at study closure)
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20. Budget Development Protocol Level Costs
Start-up Costs
Budget development and negotiation
Cost coverage analysis
Trial set-up in OnCore
Regulatory activation, e.g., IRB submission/approval
Study team effort toward protocol review and implementation, e.g., coordination and attendance at pre-study meetings, trainings, document creation
Ancillary in-services and preparation toward study activation
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21. Budget Development Protocol Level Costs (continued)
Ongoing Management Costs: Regulatory maintenance, ongoing protocol administrative efforts, completion of sponsor documents (e.g., enrollment logs), data management upkeep.
Close-out Costs: Financial and administrative close-out; study closure with IRB, financial reconciliation, record retention and storage.
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22. Budget Development Pass-Thru / Invoiceable Costs
Costs incurred on a per event or as needed basis
only if a particular event or activity occurs.
Amendment processing: Protocol, informed consent, coverage analysis, budget/contract
Monitoring visits
Tests, items, procedures completed on an “as required” basis:
Tests outside window of routine/standard for some subjects, e.g., x-rays, scans, biopsies
Screen failures
Serious adverse event reporting
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23. Budget Development Anticipating all Costs!
We cannot anticipate all “hidden” fees, but we can anticipate that there will always be unexpected costs when conducting a clinical trial.
Recruitment efforts
Other medications
Poorly trained monitors or monitor turnover
Inefficient handling of study queries by sponsor/CRO
Ratio of screen fails, pro-rated payment for screening visits
Payments for subjects who partially complete the study, and for non- evaluable subjects
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24. Negotiation Strategies
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Negotiation Strategies

25. Negotiating the Budget
Know your COSTS!
Be able to justify your costs.
Track record with sponsor
Past performance by investigator or site; enrollment and compliance
Data on potential subjects
Timeliness – Be an early site
Establish flexibility to cover costs
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26. Negotiating the Budget Review the Contract for Budget Terms
Make sure “start-up” fees are non-refundable and due at contract execution
Evaluate payment schedule/milestones
Ensure clarity, e.g., overhead or indirect costs included, other medications provided?
Make sure expectations related to scope of work are considered in the budget, e.g., CRF completion or query resolution timelines
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27. Congruency Review
It is critical to ensure congruency between the study budget, contract, consent form, and billing plan.
Sponsor budget terms and contract terms can be contradictory or unclear – most often to a site’s disadvantage!
Before finalizing a negotiation, make sure that all items identified as being paid for by the sponsor in the Coverage Analysis billing plan are included in the budget.
If a consent form promises the participant something free of charge, we must ensure we are compensated for the item in the study budget.
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28. Clinical Trial Financing: Strategy, Best Practice & Infrastructure
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Clinical Trial Financing: Strategy, Best Practice & Infrastructure

29. What We have Learned So Far….
It’s a business
Feasibility is key
Coverage Analysis is critical
Budget Development is a detailed process
Negotiation requires tact
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30. Clinical Trial Financing
Big picture strategy, insights
Infrastructure, supports
Roles, responsibilities in budgeting
How do we make sure we have strong budgets?
Clinical Trial budgets role in effective financial management
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31. Clinical Trial Financing
Big Picture Financial Strategy:
Do not open studies we shouldn’t (Feasibility)
Have efficient processes to keep us competitive (speed) and our operating costs low.
Have skilled teams to ensure we identify and prepare for study costs upfront. (minimize risk)
Find the right balance for long term program growth & financial viability -- every study is not a financial win.
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32. Wait… Why would we participate in a financially risky trial?
Novel therapy; only way to obtain access for our patients
Interest in investigational product – potential long- term benefits
Differentiate VCU from community practices
Establish a positive reputation with sponsor
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33. Other Insights to Keep in Mind….
Note differences in
perspectives & priorities:
Physicians want their patients to have access to new/cutting edge treatments.
Administration must ensure the clinical trial portfolio is financially sustainable.
Clinical Trials business impact
Gains for VCU beyond one study…
Access to cutting edge treatment could bring
new patients to the Health System for routine care.
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34. Clinical Trial Financing Infrastructure
Standardization & Specialization
VCU Institutionally required fees
VCUHealth Research charge master
Clinical Trials Management System (OnCore)
Specialized staff supporting clinical trials
Standardized processes, tools, templates
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35. Budget Implementation
Feasibility
Eliminate bad studies
Coverage Analysis
Billing Plan
Time Estimates
Budget Development
Ancillary/ Clinical Costs
Solidify
Financial Feasibility
Budget Negotiation
Budget Implementation
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36. Who Plays a role in this Process?
Investigators
Study Coordinators
Other study staff
Coverage Analysis specialists
Budget Development/Negotiation specialists
Clinical/Ancillary service providers
OnCore staff
CT Financial Managers
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37. Best Practices when Developing & Negotiating Clinical Trial Budgets
Specialized clinical trials coverage analysis and budgeting staff.
Contribution by many is still necessary but there are benefits to specialized personnel.
Established processes with focus on key interactions with investigator, study team, support units, and ancillaries.
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38. Best Practices when Developing & Negotiating Clinical Trial Budgets
Coverage Analysis & Budget Development Specialists
Provide expertise to support the PI/Study team
Draft for study team review:
billing plans
time estimates – protocol and per subject
Request ancillary agreements for all study services required.
Develop budget & evaluate financial feasibility
Negotiate budget
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39. Clinical Trial Financing Ensuring we have strong budgets
Required Documents from Sponsor to get started:
Protocol
Protocol Schedule of Events
Sponsor Budget Template
Sponsor Contract
Internal Budget
Sponsor Budget
Billing Plan
Time Estimates
Ancillary/Clinical Costs
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40. Internal Budget vs Sponsor Budget
Wait we need two budgets????
YES
Sponsor budgets show what they will pay for in their defined categories.
Our internal budget translates what a sponsor will pay us into a reflection of how internal expenses will be allocated to the project.
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41. Example – Billing Plan
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42. Example – Time Estimates
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43. Example – Sponsor Budget
Important to note differences in perspectives:
Physicians want their patients to have access to new/cutting edge treatments
Administrators want to support physicians and ensure we are doing so in a financial sustainable way
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44. Example – Internal Budget
Per Participant Costs are the same, but the budgets look very different
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45. Clinical Trial Budget Development Strategies and Practices
Study Level Financial Strategy
The internal budget is just as important as
the sponsor’s budget.
Analyze the internal budget and supporting documents.
It is the road map for how costs will be allocated internally.
Ensure it is congruent with the sponsor budget.
Know your break even point.
Update it throughout negotiation (so costs stay covered)
Internal Budgets help us ensure costs are covered and then guide the financial management of the study!
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46. In Summary…. How do we ensure we get a good budget?
Consistent practices/processes
Skilled staff developing it
Attention to detail
Realistic time estimates
Careful analysis of all cost
Thorough congruency review
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47. The Budget’s role in Financial Management
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The Budget’s role in Financial Management

48. Budget Implementation
Effective clinical trial financial management hinges on well built and easily interpreted budgets and budget terms.
Internal Budget
Personnel Allocations
Internal Fees
Clinical care/Ancillary Costs
Sponsor Budget/Contract
What to expect payment for
Invoice Requirements
Payment terms
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49. Managing the Budget
The sponsor budget is the foundation for how a study is built in the OnCore Financial Console.
Data in OnCore helps financial managers:
Know what clinical/ancillary bills are expected on a study
Know what sponsors owe us for work performed.
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50. Best Practice: “Hand-off” from Pre to Post
Communication
Is study build and billing/financial plan understood by all
Are there special terms, nuances to highlight
Clear budget documentation
Verification of OnCore build
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51. For more on Post-Award Management of Clinical Trials…
Understanding the Role of Post-Award Financial Management of Clinical Trials
Rashmi Pershad
Meagan Sok
Founders Room 2:00 – 2:50
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52. Wrap Up Clinical Trials: It’s a business
Building a comprehensive clinical trial budget
Negotiating the budget
Strategy, best practice, and infrastructure
The Budget’s Role in Financial Management
Office of Research Administration

53. Office of Research Administration
Tricia L. Gibson, MS, CRA, CCRP, Executive Director for Research Administration VCU School of Medicine, phone:
Cindy Naret, Associate Director Clinical Research Administration & Operations, VCU School of Medicine, phone:
Visit our website:
Office of Research Administration