1. HEATHER OFFHAUS DIRECTOR GRANT REVIEW & ANALYSIS UNIVERSITY OF MICHIGAN MEDICAL SCHOOL hmills@umich.edu BRIAN FARMER Senior Director Academic Affairs Cleveland Clinic bfarmer2@ccf.org Managing Clinical Trials For Break Even

2. What will I hear today? We’ll discuss the primary issues in a financially successful clinical research enterprise We’ll discuss the elements of a well developed budget  Identify the funds on the front end by budgeting well  Identify funds through negotiation We’ll discuss some processes we use to manage financial results.  Identify funds through consistent invoicing and bookwork  Identify funds through careful tracking

3. Can I really be Financially Successful? It has to be a Departmental/Institutional Choice It is a Philosophical and a Process You have to Talk about it, Get Buy-In Define what you Mean by Financially Successful You must Build an Enterprise

4. Clinical Trial Team One of the most integrated groups How do you surround yourself? Principal Investigator Clinical Study Nurse / Trial Coordinator Sponsor / CRO (though maybe at a longer arm length!)

5. Extensions of Clinical Trial Team Billing Calendar Review Office Human Subjects Protection Office Contract Negotiation Group / Sponsored Programs Office Ancillary Review Committees

6. Specialized Expertise Use your Competitive Advantage in Negotiations Do you have Personnel, Techniques, IP that you can Leverage/ Do you Truly have Specialized Patients Geographic Advantage

7. Determine Recruitment Potential Define reasonable & realistic accrual goals 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? What is my patient population?

8. DISCLAIMER!!! We will talk through types of charges We will offer many ways of looking at things BUT, this is not the exhaustive list! Many items are protocol/institution specific

9. Clinical Budget Full Budget Concepts: Needs to be somewhat flexible If not in budget, sponsor is not obligated to pay Must cover all costs

10. 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.

11. Identify Universal Costs for Study Conduct What institutional approvals are needed and need funding? Are mandated fees charged? Determine institutional Indirect Cost rate

12. Indirect Cost Recovery (aka Facility & Administrative charges or Overhead) Determine correct rate to use on your study Call your institutional resource! These are a real cost to the institution

13. Budgeting a Clinical Trial Clinical Trial experience is helpful when creating and negotiating budgets Understand the nuances of treatments Things are not black and white There is a patient at the other end of the trial The care always has to come first over the protocol

14. Dissecting the Protocol Study Calendar Identify items that will generate expenses for the site Number and complexity of subject visits

15. Dissecting the Protocol Study Calendar Identify items that will generate expenses for the site Number and complexity of subject visits Laboratory Assessments (Examinations) Knowing exactly what is included in each lab cost is key

16. Dissecting the Protocol Study Calendar Identify items that will generate expenses for the site Number and complexity of subject visits Laboratory Assessments (Examinations) Study Design Study duration Accrual goal Number of participating sites Cycle length and/or limit

17. Billing Calendars Produce list of study procedures / calendar Principal Investigator designates Standard of Care items versus research related items Billing Calendar becomes the foundation of your budget

18. Billing Calendar Form to take on visit to PI to identify standard of care v. chargeable items

19. Preparing the Budget

20. Salary Recovery Estimates Recovery Estimate Sheet for: Principal Investigator Additional faculty / clinician participation Data Manager/Coordinator Regulatory Manager/Coordinator Research/Treatment Nurse Medical Assistant Multi-site Study Coordination Consider support for: Finance/Accounting IT Support for Clinical Research Difficulty of meeting eligibility criteria Additional recruitment effort

21. Consider “Hidden” Study Costs Delayed start Informed consent process Increased salaries & operating costs over time Travel to clinics or offsite locations  Hotel Stays  Tolls / Mileage  Meals

22. More “Hidden” Study Costs Unscheduled visits Overhead costs for “a la carte” or one-time procedures Tracking study funds Audits

23. Consider Closing Costs 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

24. Potentially Unallowable Costs: Finder’s fees/Referral fees Enrollment incentives Paperwork completion incentives

25. Feasibility Comparison The comparison of what you truly need to what you can negotiate…. How do you identify the “institutional investment” in a project? Always compare any sponsor offered amounts with information you have When do you say (for financial reasons) you can’t do a study?

26. Negotiation Areas of resistance: Study team salaries Start up fees Expensive procedures Procedures should be “standard of care”

27. Tips to overcome resistance: Justification outline of start up fees Increase cost of one item to reduce the cost of another Additional invoicable items Ask for more than you need, so you can reduce costs and satisfy sponsor later Clarify procedure requirements to see if a less expensive option can be used *Remember, the sponsor WANTS to work with you! Negotiation

28. Final Logistics Meeting Identifying equipment/medications/supplies provided by sponsor (Kits for labs, PK draws, etc.) Verifying number of patients expected to accrue Fielding questions/feedback from study team that need to go to sponsor in financial areas Logistics for conducting trial Reviewing draft financial terms from the sponsor Bring the Team back together

29. On Going Financial Analysis Review during the study is critical Examine the Data Available to you Independent Review is Critical Adopt Procedures and Follow Them Don’t be Afraid to Pull the Plug

30. Our Process Research Budget Include Costs of Clinical Research Choose Proper Metrics be Transparent Measure Performance Against Metrics

31. Metrics and Who is Responsible Financial Reports  Prepared Centrally, Distributed by Post Award  Focus of study reports, P/L, Not Budget  FTE’s by funding (Phantoms, Labor Pools) Enrollment Data Billing Data Earned but Not billed Other Data?

32. Bi-monthly Budget Review Review of Overall Budget Performance Finance Personnel High Level Reports Detailed Discussion as Needed

33. Bi-monthly Budget Review Sample Research P/L

34. Bi-monthly Budget Review Sample Metric Report

35. Quarterly Reviews Financial Status Deliverable Status Examination of Individual Studies Focus  Past End Date  Closing soon  Deficit Status  Inactive  Others

36. Past End Date or Closing Soon Financial Position Status of Deliverables Status of AR Status of Earned Not Billed Close or Extend

37. Deficit Status or Inactive Financial Status Billing/Payment Status Discuss Identified Issues Develop Corrective Action Close Study

38. Other Discussions for Quarterly Meetings PI issues requiring intervention Central Office Assistance Sponsor Problems IRB Issues Other Communication is Key to any Enterprise!

39. Other Issues: Renegotiation If Science is Good, Renegotiate the Troubling Issues May be Better For Sponsor to Re- Negotiate Adjust Protocol The Worst they can Do is Say No Asses Institutional Relationship with Sponsor

40. Other Issues: IRB Good Communication with the IRB IRB Approved Protocols without a Study Account Set-up (Phantom/Orphan) Informed Consent that Hurts Enrollment Renewals/Changes

41. Other Issues: Various Timing of Gain/Loss Recognition Research Billing  Timing  Review of charges to studies  Error Correction SOP Collection from Sponsor Monitor Visits Training of Personnel (duties outside their background) COMMUNICATE

42. Other Issues: Residuals Must Have Written Policy F & A on Residuals Distribution Process Tax Implications Restricted Use Institutional Funds

43. Summary Know your Business Develop Good Budgets Monitor Involve the Whole Team Monitor Work with the Sponsor Monitor

44. Communication is Key With PI With Finance With Billing Staff With Sponsor The Entire Team, Internal and External

45. Questions? Heather Offhaus Director Grant Review & Analysis University of Michigan Medical School hmills@umich.edu BRIAN FARMER Senior Director Academic Affairs Cleveland Clinic bfarmer2@ccf.org