Tips on Preparing a Clinical Trial Budget

When considering a clinical trial budget, it is unwise to start with the budget presented by the trial sponsor and then back into a detailed budget. The creation of an appropriate “build up” budget for a clinical trial is the only way to know how much the study will cost you, and it is critical for subsequent fiscal management of the study. It is also the best approach to ensure that subsequent billing of the sponsor or third party payors does not violate anti-kickback or Medicare as Secondary Payor laws and regulations. OIP has spreadsheet templates that can help with these analyses.

The following steps may be useful.

  1. Determine the full cost to perform the study.
    1. Read and dissect the clinical trial protocol to identify any cost- generating activities.
      • Don't depend solely on the protocol's study flow chart; other costs will likely be found in the protocol, e.g., costs associated with shipping and handling of samples, record retention costs, telephone and fax costs.
      • Some costs will not be found in the protocol, but nevertheless will be incurred, e.g., time/cost associated with CRF completion and adverse event reporting, inflation for long-term studies, copy costs for x-rays, costs of monitor visits, close-out costs, etc.
      • Remember start-up costs, e.g., WIRB fee for initial review, Research Pharmacy setup fee, etc.
      • Personnel costs can be estimated using either a percent effort method or activity-based method (time expended by each personnel member for each activity). b. Identify which procedures are standard of care and billable to third party payors, and which procedures are study specific and billable to the sponsor.
    2. Identify which procedures are standard of care and billable to third party payors, and which procedures are study specific and billable to the sponsor.
      • For each procedure, ask if it is an actual procedure for which a charge will be generated, e.g., an ECG, or if it will be covered only by personnel time/effort, e.g., obtaining informed consent, measuring vital signs, getting a history, etc.
      • Total the costs of only those procedures that are study specific and not billable to a third party payor.
      • If in doubt as to whether or not a third payor will cover a given expense, request a written determination in advance.
    3. List all other fees, e.g., advertising and other recruitment costs, departmental/divisional administrative time/cost, F&A.
  2. Compare your trial cost estimate with the funding first offered by the trial sponsor.
  3. Negotiate with the sponsor to address shortfalls.
    • Don't be afraid to negotiate the shortfalls. Sponsors rarely, if ever, start by offering their top study reimbursement amount.