1. BUDGETING THE INDUSTRY-
SPONSORED CLINICAL
RESEARCH STUDY
Carolyn White, Manager, Study Coord & Conduct Unit
Center for the Advancement of Clinical Research (CACR)
Heather Offhaus, Director
Medical School Grants Office

2. Objective:
To learn the fundamentals of
preparing a clinical trial budget

3. Developing and Negotiating
Successful Study Budgets
• U-M research community provides
important resources to help you
– Departmental Mentoring
– Department Res. Grants Admin.
– Medical School Grants Office
– DRDA Seminars
• Successful budgeting is definitely
an art refined by experience

4. Read the Protocol
• Identify items that will generate
expenses for the site
– Number & complexity of subject visits
– Estimated time required for study visits
– Procedures to be performed
– Difficulty of meeting Inclusion/Exclusion
criteria
– Staffing needs for duration of study

5. Determine Recruitment
Potential
• What is a reasonable and realistic
accrual goal?
– 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?

6. Clinical Budget Concepts:
• Must cover all costs
• Needs to be somewhat flexible
• If not in budget, sponsor is not
obligated to pay

7. Clinical Trial Budget
Categories
Fixed Competitive Site Budget
Budget Bid Proposal
Offered by Site submits Site submits to
sponsor or proposal to sponsor without
CRO sponsor in site pre-determined
selection process budget limits

8. Categorize Budget Items
• Fixed and Up- • Costs Related
Front Costs to Subject Visits
– Are needed for – Sponsor
study conduct and proposals usually
incurred whether or link all budget
not a subject is items directly to
enrolled. patient visits.

9. DISCLAIMER!!!
• We will talk through many types of
charges
• We will offer many ways of looking
at things
• BUT, this is not the exhaustive list!
Many items are protocol specific
with hundreds of possibilities!

10. Determine Universal Costs for
Study Conduct
• What institutional approvals are
needed?
• Are fees charged?
• Determine institutional Indirect Cost
rate

11. Plan for Study Start-Up Costs
• Costs for preparation of informed
consent document and applications
• IRB Fee - $1800
• GCRC Administrative Fee - $750
• IDS Study Start-up Fee - $1150
• Advertising
**above fees charged whether or not patients are accrued

12. Indirect Cost Recovery
(aka Facility & Administrative charges or Overhead)
These are a real cost to the university
• Determine correct rate to use on your
study
• Call Me!!!
Contact: MSA Grants Office,
Heather Offhaus 763-4272.

13. Salary Support for the
Research Team
• Investigator
• Co-Investigators
• Study Coordinator
• Office Personnel
• Technical Support
• Laboratory Staff
• Professional/Consultant Fees
** Don’t forget Fringe Benefits for each!

14. Study Maintenance Costs
• Continuing regulatory reporting
• Maintaining Investigator binders/files
• Staff training needs
• Research team meetings
• Study communications
• Sponsor monitoring visits
• Adverse Events reporting

15. Data Collection & Subject
Maintenance Costs
• Case report forms completion
• Scheduling for visits, tests/scans
• IDS study article dispensing/
accounting
• Subject payments
• Telephone contacts
• Data query resolution

16. UM Resources Utilization
• GCRC Outpatient Clinic
• M-Labs vs. Central Laboratory
• Photocopying
• Freezers, dry ice, special equipment
• Committee review of devices,
radioisotopes, or gene-transfer
material

17. Consider “Hidden” Study
Costs
Delayed start
Informed consent process
Increased salaries & operating costs
over time
Travel to offsite clinics

18. More “Hidden” Study Costs
Unscheduled visits
Overhead costs for “a la carte” or
one-time procedures
Tracking study funds
Audits

19. 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

20. Potentially Unallowable Costs:
• Dependent on
– State law
– Michigan contracting policy
• Includes:
– Finder’s fees/Referral fees
– Enrollment incentives
– Paperwork completion incentives

21. Now What?
You’ve cost out your entire protocol
You’ve identified every dollar you
will need to do the study
You’ve reread the protocol
You’re ready to negotiate
a budget!

22. Revisit: Clinical Trial Budget
Categories
Fixed Competitive Site Budget
Budget Bid Proposal
Offered by Site submits Site submits to
sponsor or proposal to sponsor without
CRO sponsor in site pre-determined
selection process budget limits
Fixed Costs v. Subject Dependent Costs

23. Build a Payment Schedule &
Budget You Can “Live With”
• The payment schedule must be
appropriate for recovering costs as
they are incurred
• Negotiate non-recurring costs as
“fixed” and not patient based
• Be aware of milestones set for
release of study funds…

24. Build a Payment Schedule &
Budget You Can “Live With”
• Recover cost of screen failures and
study drop-outs
• Include provisions for sponsor
support for extra procedures or
variable cost items

25. For Competitive Bids:
Consider asking for Total Costs in your
payment schedule
– Instead of $500 for a routine visit, ask $625
– Don’t break out the indirect costs at the
bottom of the schedule

26. For Sponsor or CRO
Proposed Budgets:
REMEMBER:
If the contract is drafted by sponsor, it is
probably to the sponsor’s benefit!
–You CAN negotiate different payment milestones
–You CAN ask for additional recovery if what they
are offering doesn’t cover your expense

27. If you think you and sponsor
have a budget you agree on:
Ask: Is the
research effort
and scientific
contribution
worth the
budget cost vs.
recovery from
sponsor?

29. This May Not be the Final
Budget!
Understand that this may not be
“cased closed” and final
– Needs agreement by your department,
school, and university
Institutional agreement is only given
by DRDA, not by any faculty
member…

30. Routing Information
• What?
– PAF, study budget, internal budget, draft
contract, and protocol
• When?
– After the study budget is agreed to by both
you and the sponsor
– Before contract terms are fully negotiated
• Where?
– Through your division, department, Medical
School, and DRDA

31. Routing Hints
• The PAF and internal budget should
match the bottom line of the payment
schedule (“Contract Worth”)
• If faculty have effort, please quantify on
the internal budget
• If the IND/IDE is open & active, indicate
status under the Notes section of the PAF
• Estimate a probable maximum number of
patients for Per Patient budgets so that
you do not have to route for additional
patients later

32. Words to the Wise:
Re-Negotiation is an Option
• Even if you are mid-study!
• Increased mid-study workload may
justify additional sponsor funding.
– Requires routing another PAF for additional
dollars, but worth the recovery
• If sponsor extends the study period,
contact DRDA directly for a No-
Cost Time Extension (NCTX)

33. Words to the Wise:
Know What’s Going On with
Study Funds!
• Track $$ received from sponsor
and study expenditures.
• The PI is responsible for study
deficits
• Industry studies are not always
“money-makers.”
X

34. Contact Information:
University of Michigan Medical
School Administration
The Center for Advancement of Clinical
Research
http://www.umich.edu/cacr
Medical School Grants Office
http://www.med.umich.edu/medschool/grants