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It amazes me how many clinical sites struggle with clinical research budgets.  Perhaps I shouldn’t be so surprised – after all, researchers are typically people whose passion is science and humanities rather than accounting and business.  However, to be sustainable, every research site needs to be at least covering their expenses.

In research there is one chance to negotiation the clinical trial budget.  That is why it is so important and perhaps why it stresses sites out.  I have been managing and reviewing study budgets for over ten years now and have developed a very simple, methodically approach to reviewing the study budget.  And it doesn’t even involve a spreadsheet

The most complicated part of the study budget is the per patient payment as this differs so vastly from study to study.  This post steps you how to negotiate a robust per patient payment.  I will cover other study fees in part 2.

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Step 1: Review the Time and Events Schedule

The first step is to grab your Protocol and print out a copy of the Time and Events Schedule.  Have a read through the schedule with reference to the footnotes.  Next, read in detail the sections of the Protocol that describe each visit and procedure.  Annotate your Time and Events Schedule with anything that is missing, unusual or needs more detail.  If there is not enough space, you may consider adding additional lines or making notes on a separate page.

For example, the Time and Events Schedule will group tests under a heading such as Haematology.  The list of haematology tests required will be described in the protocol along with whether they are sent to the central lab or local lab.  The cost of a Full Blood Count will be different to an INR so it is important to itemise these tests.  Also, an INR may not be performed at every visit, whilst a Full Blood Count may be.

Also note any visits that are grouped under one heading where there may be different tasks for each visit.  This typically happens with Follow up visits.  For example, CT scans may only be performed every third visit.  Therefore a visit with a CT scan will cost more than the other visits.

Step 2: Group Items

You are now going to allocate each task in the Time and Events Schedule to a work group.  I use four categories:

  1. Tasks performed by the Investigator (eg Informed Consent, Physical Examination etc)
  2. Tasks performed by other Research Staff (Vital Signs, questionnaires, etc)
  3. Laboratory tests
  4. Tasks that require outsourcing.  That is, your research team needs to pay someone else to do the task. If you are required to pay other departments in your institution out of your study budget to perform certain tasks, include those tasks in this category.  The most common item in this category is radiology items such as CT scans.

Take four different colour highlighters and assign a colour to each of the four categories above.  Work your way through the time and event schedule and highlight each test according to what category it falls in.

Step 3: Calculate Staff Hours per visit

Now I calculate how many hours of study staff time I need for each task for each of the first two categories.  For example, Informed Consent takes 1 hour to complete the process, a physical examination 15 mins and so on.  If you aren’t sure how long an item usually takes, ask around.

Now add two lines below the Schedule for Investigator time and Study Coordinator time.  There are certain tasks that are typically not included in the Time and Event Schedule but are performed for each study.  They include:

  • Prescribing of study drugs (dispensing and administering are usually covered).  Sometimes the dose calculation can be complicated so be sure to allocate time accordingly.
  • Patient education and communication.
  • Medication accountability – most sponsors have an expectation that this is done at every visit even if it isn’t specified in the protocol (besides, it’s good practice).  The price will vary from study to study depending on time between dispensings, tablets versus syringes etc.
  • Data entry (electronic or paper)
  • Updating study logs (these seem to be increasing with every study)
  • Administrative time for booking and arranging appointments

Add a total number of investigator hours and study coordinator hours for each visit, making sure to allow time for each of the above.

The reason we don’t calculate time for Laboratory items are that venepuncture, processing and shipping costs are typically itemised separately in the Sponsor’s budget.  Make sure you note to charge for multiple venepuncture and processing if samples are collected at multiple timepoints at the same visit.

Step 4: Calculate Staff hourly rates.

This step is the hardest because it looks like it should be simple but it isn’t.  Most people think hourly rate the rate that the staff are paid.  It is a little bit more complicated than that.

The cost to the institution of one hour of staff member’s time is made up of  multiple of factors including their hourly rate, annual leave, annual leave loading, paid sick leave, superannuation, public holidays, long service leave plus any bonus or fringe benefits that may form part of their employment contract.

When I worked for the government, the rule I was told by my business manager was to multiple the base wage by 24%.  As everyone was on award wages that were published publicly, it was easy to calculate and seemed to work well.  Now I run my own business, I have intimate knowledge of all the staffing costs and can work it out more exactly.  Your HR department may be able to assist with this.

Janelle Bowden of Access CR has developed an amazing spreadsheet that you can download from their website that calculates the hourly rate by simply entering the award wage and contracted hours per week.  Really it doesn’t get more simple than that!

The best part is that once you have calculated the hourly rates for one study, you can use this for all studies.

Step 5: Obtain Quotes for outsourced Items.

When obtaining quotes, be sure to explain what is required in detail to the service provider.  Research tests usually are more detailed than standard of care and may attract a higher charge.  If you can find a service provider that specialises in research or conducts their own research, the process is bound to work more smoothly.

Before you agree to the cost of an item, make sure that you obtain a written quote for each item and that the service provider will honour that quote for the duration of the study.

Step 6: Put your figures into a Spreadsheet for the Sponsor to review

There are two ways to send a budget to the Sponsor for review.  Develop your own spreadsheet (its easy – use the Time and Events schedule as a guide) or amend the budget provided to you by the Sponsor.  I prefer the first method, while most Sponsor prefer (and some even insist upon) the second.  If using the second method, ensuring you have tracked changes enabled before you start.

Either way, you can start entering the calculations on your time and events schedule into a spreadsheet, converting crosses to dollars.  When calculating the cost on an individual item, it is as simple as multiplying the number of hours calculated in Step 3 by the hourly rate determined in Step 4.  For example, vital signs take 20min to complete.  The Research Nurse’s hourly rate is $90.00.  Therefore the cost of performing vital signs is $29.70 (90×0.33).

Investigator and Study Coordinator time calculated in Step 3 should be included on a separate line in the budget.  Don’t forget to include lab fees such as venepuncture, processing and shipping.

You may find that certain items are not included in the per patient budget by the Sponsor.  Before adding them in, check if the Sponsor has added these as “pass through” or “additional fee” items.   Pharmacy dispensing fees are a common item that may be added as an pass through cost.

The final part is to calculate a total for each visit as well as a total overall.

Step 7: Don’t forget the overhead

Overhead is usually a percentage on top of the per patient fee to cover the cost of things like rent, electricity, IT services etc.  Very few sponsors will offer you overhead up front.  Don’t forget to include this as it is very important in covering your infrastructure costs.  The amount of overhead varies from 20 – 40% from institution to institution.  If your institution does not have an overhead rate set by your finance department, Put in what you feel comfortable with and what you think the Sponsor will agree to.

You budget should be now ready to send back to the Sponsor for approval.  Easy!

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