Clinical trial budgets under pressure
Investigator grants remain flat and regulations tighten available reimbursement dollars
Clinical trials are important to the development of new drugs, medical devices and procedures, but budgets for these trials are under increasing pressure.
According to Pfizer, the average cost of clinical trials has risen to nearly 60 percent of total development costs, compared to just over 30 percent in the 1980s.
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Jessica Dolfi, senior business consultant at Medidata Solutions, a clinical development solutions company, expects that the Affordable Care Act and the Physician Payments Sunshine Act will put added pressure on clinical trial budgeting, even though such evidence hasn’t materialized yet.
“When we see rates negotiated in clinical trials, they tend to be probably a little bit higher than for insurance and definitely higher than Medicare rates,” said Dolfi. “So the concern, I think, is that if more patients are covered by third-party insurers, sites may be getting less reimbursement overall in the clinical trials themselves.”
Adding more pressure, said Adam Chasse, chief operating officer at RxTrials, is that investigator grants have stayed flat, and payments continue to be late and/or infrequent, while studies have gotten more complex.
“From a site’s perspective, in order for the industry to create equitable grants and payment terms for sites, they need to better understand the business reality of running a site and executing a study,” he said. “Conditions are challenging enough that these are significant contributing factors to the turnover and inexperience of the investigator pool.”
While there is a temptation to rely on past financial data to build budgets or unit costs in individual line items, Chasse cautioned that such a strategy is not a good one. “Number one, a vast majority of those budgets were agreed to by inexperienced sites, which means the bar is set artificially low. And two, to a site, no individual line item is that meaningful – but the bottom line is very meaningful.”
