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5 Best Practices to Follow While Budgeting for a Clinical Trial


    When preparing a budget, take into account all factors and anticipate situations that could increase the expense of a clinical research.

    Clinical trials that fail to achieve their goals are often the result of poor budgetary planning and decisions. Given the various processes, individuals and committees involved in a clinical trial, budgeting can be a tricky process. A proper clinical budget is one that not just factors in the obvious costs, but also anticipates hidden ones and provides for unexpected situations or contingencies. This article explains why budgeting for a clinical trial is important, the various phases in clinical research and the budget related activities in each, the different kinds of clinical costs and five best practices that organizations should follow when creating and implementing a clinical study budget.

    Why is budgeting for a clinical trial important?

    The budget of a clinical trial is an important element in conducting it effectively and successfully. A clinical trial should be budgeted for the following reasons:

    • To make sure that all costs involved in conducting the trial are covered
    • To provide a framework for the staffing and timelines in conducting the trial
    • To ensure that the trial is completed once it has begun

    Clinical trials that are not budgeted properly tend to often fail in achieving their end goals - thus incurring more expenses for not just the institution conducting the trial but the sponsor as well.

    Clinical study phases and budgeting

    While budgeting for a clinical trial should start in the pre-study phase, each stage has a number of critical steps in terms of cost planning that should be followed for successful execution of the trial:

    Pre-study phase:

    • Develop the cost plan
    • Negotiate the clinical trial budget with the sponsor

    Study phase:

    • Review the study activities and the payments received for these activities
    • Make revisions to the budget in case of any developments/hidden costs appearing during the study

    Post study phase:

    • Reconciliation of actual efforts and incurred costs
    • Reconciliation of payments with the budget

    How can clinical trial costs be categorized?

    Clinical trial costs can be categorized as follows:

    Direct Costs
    • Study personnel (Labor involved in the trial)
    • Tests/procedures (these are services that generate bills regardless of payor)
    • Expenses involved in operations such as phones, faxes, copying, supplies etc.
    Indirect Costs
    • Institutional costs (facility and administration costs that includes IT, HR, space and support services)
    • Other infrastructure costs within the institution or unit carrying out the trial that are not included in the overhead but is part of the cost of doing business
    Pass Through Costs Items which are likely to be handled by invoice because these can't be predicted. These include:
    • Subject reimbursements
    • Subcontractor payments
    • Unanticipated problems
    Hidden Costs These costs don't belong to a clear category. They may include:
    • Unanticipated delays
    • Recruitment challenges
    • Changes in staffing

    What is the difference between direct and indirect costs?

    Direct and indirect costs are a key part of any clinical trial budget - and in order to plan the budget properly, the differences between these two types of costs have to be understood.

    Direct Costs Indirect Costs
    They can be identified and charged to one particular clinical study with a high degree of accuracy Indirect costs are those that are common to multiple clinical study projects and cannot be easily or accurately segregated by project
    Can include:
    • Salaries with associated fringe benefits for study staff
    • Equipment for a particular study
    • Travel for a clinical study Supplies
    • Patient care costs Subcontracts (for e.g., satellite clinical trial sites)
    Can include:
    • Depreciation of office equipment used across multiple projects such as faxes, phones, copiers and printers
    • Physical operations and maintenance (heating, air conditioning, rent, carpeting etc) Administrative costs such as IRBs overseeing multiple projects, clinical research office staff, HR and payroll involved in hiring and paying trial staff

5 Best Practices to Follow

  1. Consider Hidden Costs
  2. Hidden costs cropping up during the actual clinical trial can derail a budget that may have considered all other aspects in the planning stages. So, institutions/organizations conducting a clinical trial have to include these in the budget beforehand. Hidden costs in a clinical trial may include:

    • Any delays in an IRB's approval of various elements in a clinical study or the actual study itself
    • Delays in approval of contracts
    • Multiple amendments to the study, resulting in more work for staff (documentation, review processing), which can further delay the start of the study and impact labor costs
    • Screen failures that may be higher than anticipated, increasing timelines and incurring costs
    • Dropout rate that is higher than anticipated - once more increasing timelines costs
    • Low accrual of study subjects will increase the costs per subject/patient
    • Safety reports in volumes higher than anticipated - this can also impact costs as labor needed to review and handle and process these will be more
    • More sponsor reporting requirements (in the form of filing updates on recruitment efforts, status updates and study progress) can increase costs in terms of labor
    • Sponsor audits or FDA audits can also lead to increased costs when changes have to be implemented in the process
    • Monitors changing frequently can drive up costs - the clinical trial monitor is the one person who knows the ins and outs of the trial and a new monitor will take time to get up to speed on the trial.
    • Travel time - if the study team is in one location and the site is in another, this can drive up costs as well

    All of these and other similar issues that may crop up once the study is underway can affect costs and it in the best interests of the organization to anticipate these hidden costs while budgeting.

  3. Develop a Proper Cost Plan
  4. The cost plan is at the heart of a proper budget for a clinical trial. Getting this right is therefore crucial for the organization in charge of the study.

    A cost plan is a must for budgeting because:

    • It helps to establish the cost of a study including all potential expenses
    • It provides a way to track the progress of a study
    • It helps identify elements that are out of the scope of a study
    • It helps plan the capacity for resources in a study
    • It allows organizations to develop consistency in estimating costs across projects

    In order to develop a good cost plan for a clinical trial, the following are needed:

    The protocol for the clinical trial Price list for the Standard of Care (SOC). This should include:

    • Rates for facilities and administration
    • Laboratory manuals Case report forms (CRFs)
      • Technical fees
      • Professional fees
    • Rates for facilities and administration
    • Laboratory manuals
    • Case report forms (CRFs)
      When preparing the cost plan, besides fixed costs, the aforementioned hidden costs have to be considered. Variable costs (discussed next) are also critical in developing a proper cost plan.

  5. Determine Variable Costs
  6. Variable costs in the context of a clinical trial budget are those costs that vary based on the number of subjects enrolled in the study. They can include the following:

    Personnel Time Time used by staff listed as key personnel to:
    • Screen subjects
    • Visit patients (including prepping them for the study)
    • Complete case report forms
    • Account for test articles (the more the subjects, the more the test articles used in a study)
    • Report Serious Adverse Events or Adverse Events
    • Monitor visits
    • Resolving queries generated by the study data
    Phone calls, mailings, faxes (increase when subjects enrolled in a study are more) These communications are to:
    • The sponsor/CRO
    • Subjects
    • Laboratories or other facilities
    Laboratories and Procedures Costs involved in the following will increase when more subjects are enrolled in the study:
    • Collection
    • Processing and shipping
    • Documentation
    • Result review
    Charges for technical and professional services Costs include:
    • Fees for EKG/MRI readings
    • Fees for processing
    • Fees for collection
    • Use of examination rooms

  7. Evaluate the Budget Properly
  8. A clinical trial site or organization that has estimated the costs involved in a study will need to evaluate the budget provided by the study sponsor. In order to do this properly, the following practices must be made a standard:

    • Use the sponsor template for the budget, which is usually a format similar to the Schedule of Events
    • Calculate the costs per patient using the cost plan
    • Identify a break-even enrollment number
    • Consider hidden and fixed costs
    • Ensure compliance with National Coverage Decision is checked and verified, i.e. costs of tests or processes that cannot be billed to insurance
    • Review the payment and invoicing terms

  9. Know the Difference between Research and Conventional Care
  10. It is important for clinical trial organizations to know the difference between research and conventional care in order to determine accurate costs and prevent fraudulent billing. To determine the difference between what research can cover and what conventional care can cover, those responsible for managing the clinical trial need to be aware of the protocol as well as the National Coverage Decision (NCD).

    Conventional care refers to those services provided to a patient if he/she was not involved in a clinical trial. These services/treatments are medically reasonable and necessary. Conventional care can also include:

    Expanded care:

    • Administration of the investigational item
    • Monitoring that is clinically appropriate
    • Prevention, diagnosis and treatment of complications

    Conventional care can also include the following items and services:

    • Those which come under a Medicare benefits category
    • Those covered by Medicare outside of a clinical trial
    • Those required only for the administration of the investigational item
    • Those which constitute reasonable and necessary care arising from administration of the investigational item (treatment for complications etc.)

    Those items that don't fit under the conventional care category in billing can be categorized as research. They are items for which the sponsor usually pays.

    These items or services are:

    • For investigational purposes only
    • Excluded from Medicare by statute (for example, hearing aids)
    • Included in the national non-coverage decision (an example would be cosmetic surgery)
    • Provided solely to satisfy data collection and analysis requirements. These items or services aren't required in the direct clinical management of patients

Proper Budgeting of Clinical Trials - Key to Successful Execution and Completion

This article has outlined some of the best practices that organizations undertaking clinical trials should adopt and follow in budgeting for a study. Considering hidden and variable costs, evaluating the budget and developing a good cost plan are just some of the factors that help in planning a budget that anticipates unexpected costs and contingencies. As explained in the beginning of the paper, a proper budget planned and implemented at the beginning of a study will save time, cost and effort in the later phases. It can also help in ensuring that a study is completed properly, in compliance with regulatory requirements and that it achieves all the goals it set out initially.

How can clinical research compliance training help?

The areas highlighted above are just a small part of the wide range of practices and processes for clinical research compliance. Subjects such as clinical research compliance are multi-faceted and complex and can be better understood after attending a training course such as the ones offered by ComplianceOnline. Our courses are available as live webinars, training recordings and in-person seminars. We also offer customized training courses developed in conjunction with organizations that wish to train large groups of their employees.

We offer training in other areas clinical trial compliance such global regulations, quality assurance, managing CROs, outsourcing and roles and responsibilities.

If you need customized training courses or specialist clinical research compliance consulting services, , please contact us through email [email protected] or call us at this
toll-free number: +1-888-717-2436.