Study Activation Survey Results: Budget Negotiation

Over the course of seven weeks, Advarra conducted an anonymous survey to collect site-specific study activation data. This data covers a wide range of topics associated with clinical trial activation and startup. Topics include IRB/IBC, regulatory and compliance, and Medicare coverage analysis, to name a few. For the purpose of this blog, we analyzed the information associated with financial feasibility and budget negotiations.

It is important for sites to identify all potential costs associated with a clinical trial. This is needed to confirm all time and effort is accounted for and reimbursed by the clinical trial’s sponsor. Without the budget developed to show all research costs, sites risk unidentified or “hidden” costs going unaccounted for.

Additionally, the significance of obtaining reimbursement for these costs is even more vital. Research sites and sponsors continue to negotiate rates and payment terms, forever altering the definition of “fair market value.” Not only should sites obtain reimbursement for all applicable costs, but they should also do so in a timely manner to streamline their study activation process.

Advarra conducts budget development and negotiation tailored specifically to an institution’s guidelines and research rates. Learn more about how to streamline the budget development and negotiation process through Advarra’s Budget Negotiation Service.

Startup

Within the study activation survey, we asked sites how much they request for their study startup fees. This includes other one-time startup fees, such as the pharmacy startup, but exclusive of ongoing expenses, such as serious adverse event (SAE) reports or closeout costs. When asked how much a site would request in startup costs per the study, we found:

43% request under $10,000

29% request $10,000 to $15,000

6% request over $25,000

A piece of information believed to heavily influence startup rates was the disease setting of the clinical study. Early and late phase drug studies tend to yield higher startup costs. Settings like observational, behavioral, and device trials often have a lower startup rate in comparison. When comparing the site’s startup costs to the disease settings they participate in, sites participating in a higher percentage of early/late phase drug trials frequently have higher startup rates. However, these sites continued to request under $15,000 in total startup costs.

Demographics

Due to extensive regulatory processes, academic medical centers (AMCs) and universities typically take longer to develop and negotiate clinical trial budgets. Their private counterparts, such as health system-based sites and independent research centers, are more flexible in comparison. Nevertheless, we wanted to determine if these associations are true.

There was little to no difference in startup costs between AMCs and non-AMCs; yet, AMCs take notably longer to negotiate their budgets. AMCs most commonly reported their budgets take over 90 days to negotiate, while their non-AMC counterparts most commonly take between 30-90 days.

Turnarounds

Initially, we predicted the higher a site’s startup cost was, the longer negotiations would take. This is because of the back-and-forth needed between the site and sponsor to negotiate this high startup rate. However, our results did not support this theory. When comparing the turnaround timeline of budget negotiations to the site’s requested startup rate, our most common responses were:

<30 Days: Sites with the lowest startup costs (<$10,000)

30-90 Days: Sites with the highest startup costs ($15,000+)

90+ Days: Sites with the lowest startup costs (<$10,000)

The most notable takeaway is the split difference in answers from sites with the lowest startup costs (<$10,000). While many of these sites can reach an agreement in under a month, most sites taking 90+ days to negotiate a budget also are those requesting under $10,000 in startup costs.

One reason for this bell-shaped curve result is simply due to having a turnaround time goal. Of sites that complete negotiations between 30-60 days, 68% have a standard turnaround timeline goal with budget negotiations. On the other hand, only 45% of sites who complete negotiations in 90+ days stated they also have a standard goal turnaround timeline. Having a standard goal or deadline on budget negotiation timelines may result in more efficient processes without sacrificing funding expectations.

Challenges

When asked about internal pain points associated with budget development and negotiations, the top response was the number of available staffing. The second most common result was staff expertise, and the third was staff turnover. Building and then negotiating a clinical trial budget requires knowledge of both the site’s clinical and financial operations. Each institution operates in its own specific way, making the budget process that much more of a challenge.

Why do negotiations take so long?

In understanding why budget negotiations take so long, sites pointed to sponsor response times and negotiating the budget costs. These budget costs were itemized between startup, per patient, and other ongoing administrative costs, but respondents indicated all three selections were problematic when negotiating. Sponsor response time was a popular response as well, with many sites pointing out the budget review sits in the sponsor’s queue for an extended period of time.

Respondents also wrote in their answers for this question, more so than in other budget-related questions. Frequent responses included challenges surrounding new COVID requirements, internal staffing and turnover, and internal communications with the clinical team and/or a health system’s central office.

Conclusion

Obtaining site funding in a timely manner is critical to the success of a clinical trial. It is important for sites to calculate all costs associated with clinical trial participation, and to relay this information to the sponsor. While sponsor response times and the art of negotiating certain costs add to the study activation timeline, sites need to have specific timeline goals to ensure the success of their budget negotiations.

Download the Study Activation Industry Report 

To better understand study activation roadblocks, Advarra asked sites to weigh in on their study activation experiences. Our latest industry report outlines these findings, providing sponsors and site suggestions and solutions, equipping them with information necessary to streamline and improve the overall study activation process. Access the Report

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