HEATHER OFFHAUSD I R E C T O RG R A N T R E V I E W & A N A LY S I SU N I V E R S I T Y O F M I C H I G A N M E D I C A L S C H O O Lh m i l l s @ u m i c h . e d u

BRIAN FARMERS e n i o r D i r e c t o rA c a d e m i c Aff a i r sC l e v e l a n d C l i n i cb f a r m e r 2 @ c c f . o r g

Managing Clinical Trials For Break Even

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

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

Clinical Trial Team

One of the most integrated groups

How do you surround yourself?Principal InvestigatorClinical Study Nurse / Trial CoordinatorSponsor / CRO

(though maybe at a longer arm length!)

Extensions of Clinical Trial Team

Billing Calendar Review OfficeHuman Subjects Protection OfficeContract Negotiation Group / Sponsored

Programs OfficeAncillary Review Committees

Specialized Expertise

Use your Competitive Advantage in Negotiations

Do you have Personnel, Techniques, IP that you can Leverage/

Do you Truly have Specialized PatientsGeographic Advantage

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?

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

Clinical Budget Full Budget Concepts:

Needs to be somewhat flexibleIf not in budget, sponsor is not

obligated to payMust cover all costs

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.

Identify Universal Costs for Study Conduct

What institutional approvals are needed and need funding?

Are mandated fees charged?Determine institutional Indirect Cost

rate

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

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

Dissecting the Protocol

• Study Calendar• Identify items that will generate expenses for the site• Number and complexity of subject visits

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

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

Billing Calendars

Produce list of study procedures / calendarPrincipal Investigator designates Standard

of Care items versus research related itemsBilling Calendar becomes the foundation of

your budget

Billing CalendarForm to take on visit to PI to identify standard of care v. chargeable

items

Screen Cycle 128 Day Cycle

Cycle 228 Day Cycle

Cycle 328 Day Cycle

  CPT CDM Day-14 to -1 Day 1Day 8 Day 15 Day 22 Day 1 Day 8 Day 15 Day 22 Day 1 Day 8 Day 15 Day 22

OFFICE VISITS                              

Physical Examination 99214 26339 RC RC       RC       RC      

LABS                              

Hematology - CBCPD 85025 35501 RC RC S RC S RC S RC S RC S RC S

Serum Chemistry - COMP 80053 20548 RC RC   RC   RC   RC   RC   RC  

Uric Acid 84550 20701 S S   S   S   S   S   S  

Serum Pregnancy Test 84702 23305 S S       S       S      

Urinalysis - Macro 81003 35303 RC S       RC       RC      

Urinalysis - Micro 81015 35303 S S       S       S      

PROCEDURES                              

CT Scan - Abdomen 74160 33971 RC                 RC      

Preparing the Budget

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

Consider “Hidden” Study Costs

Delayed start Informed consent processIncreased salaries & operating costs over

timeTravel to clinics or offsite locations

Hotel Stays Tolls / Mileage Meals

More “Hidden” Study Costs

Unscheduled visits Overhead costs for “a la carte” or

one-time procedures Tracking study fundsAudits

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

Potentially Unallowable Costs:

• Finder’s fees/Referral fees

• Enrollment incentives

• Paperwork completion incentives

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?

Negotiation

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

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

• 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

On Going Financial Analysis

Review during the study is criticalExamine the Data Available to youIndependent Review is CriticalAdopt Procedures and Follow ThemDon’t be Afraid to Pull the Plug

Our Process

Research Budget

Include Costs of Clinical Research Choose Proper Metrics be Transparent

Measure Performance Against Metrics

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 DataBilling DataEarned but Not billedOther Data?

Bi-monthly Budget Review

Review of Overall Budget Performance

Finance Personnel

High Level Reports

Detailed Discussion as Needed

Bi-monthly Budget ReviewSample Research P/L

Bi-monthly Budget ReviewSample Metric Report

Quarterly Reviews

Financial StatusDeliverable StatusExamination of Individual StudiesFocus

Past End Date Closing soon Deficit Status Inactive Others

Past End Date or Closing Soon

Financial PositionStatus of DeliverablesStatus of ARStatus of Earned Not BilledClose or Extend

Deficit Status or Inactive

Financial StatusBilling/Payment StatusDiscuss Identified IssuesDevelop Corrective ActionClose Study

Other Discussions for Quarterly Meetings

PI issues requiring interventionCentral Office AssistanceSponsor ProblemsIRB IssuesOther

Communication is Key to any Enterprise!

Other Issues: Renegotiation

If Science is Good, Renegotiate the Troubling Issues

May be Better For Sponsor to Re-Negotiate

Adjust ProtocolThe Worst they can Do is Say NoAsses Institutional Relationship with

Sponsor

Other Issues: IRB

Good Communication with the IRBIRB Approved Protocols without a

Study Account Set-up (Phantom/Orphan)

Informed Consent that Hurts EnrollmentRenewals/Changes

Other Issues: Various

Timing of Gain/Loss RecognitionResearch Billing

Timing Review of charges to studies Error Correction SOP

Collection from SponsorMonitor VisitsTraining of Personnel (duties outside their

background)COMMUNICATE

Other Issues: Residuals

Must Have Written PolicyF & A on ResidualsDistribution ProcessTax ImplicationsRestricted UseInstitutional Funds

Summary

Know your BusinessDevelop Good BudgetsMonitorInvolve the Whole TeamMonitorWork with the SponsorMonitor

Communication is Key

With PIWith FinanceWith Billing StaffWith Sponsor

The Entire Team, Internal and External

Questions?

Heather Offhaus Director Grant Review & Analysis University of Michigan Medical School hmills@umich.edu

BRIAN FARMERSenior DirectorAcademic AffairsCleveland Clinicbfarmer2@ccf.org