Some hospitals work closely with their financial departments, which support clinical trials budget and contract negotiation, however there are lots of hospitals that do not receive such support. In lots of cases budget negotiation is left to study coordinators, radiology teams, nurses, pharmacy technicians, etc. This is an addition to their busy schedule and often the result is inadequate budgets, lack of invoicing, etc.
Budget and contract negotiation process is critical for part for the success of clinical research in the hospitals. Although clinical trial teams are experienced in budget and contract negotiation, it is highly recommended the teams to receive support from hospital financial department.
What are the common complications in clinical trials budget planning?
- Inadequate budgets: Sponsors try to reduce costs of research and this includes budgets offered to hospitals conducting research.
- Lack of financial planning for long-term studies.
- Underestimation of workload involved.
- Lack of payments tracking.
- Lack of invoicing or inadequate invoicing.
- Inadequate knowledge about country specific tax system – VAT, etc.
What could be done to improve clinical trials budget and payment process?
- Clinical trials teams have to perform detailed review of the protocol and proposed budget to evaluate if the budget covers all costs associated with the clinical trial. Often clinical trials teams use the payments for clinical trials to fund research and hire new staff. Accepting low budgets that do not cover all costs will cause significant financial costs to the hospital and research team.
- Often clinical trials teams fail to plan properly long-term studies. For example, if the study is running for 5-10 years it is likely the budget to change over time. In such cases clinical trials teams have to include option in the contract that will allow them to revise the budget every couple of years.
- During the last couple of year more Sponsors have switched to remote monitoring and other activities, which require more input for the sites and administrative support.
- Unfortunately, still there are lots of hospitals, which do not track work done for their clinical trials and they entirely rely on Sponsors to provide them payment forecasts. This is a very bad practice that could result in underpayments or overpayments and significant financial loss for the hospitals.
- It is still quite common clinical trials team to fail to provide proper invoicing as required per contract or to provide inadequate invoices. The result is delays in payments and sometimes these delays are not just months but years. Sometimes the consequence of this is huge outstanding payments, which could be estimated in thousands. This is a very serious issue for the clinical trials teams and hospital finances.
The main recommendation for all teams is to determine who will be responsible for budget tracking and invoicing during study set up in order to avoid delayed payments when the study starts.