Developing a new medication is a tedious process and costs of clinical research are constantly on the rise. These are the main reasons for the decreasing trend in the number of filings with the FDA. In ten years from 2003 to 2012, the average number of filings for novel drugs has decreased from 30 to 26.
According to the U.S. Department of Health and Human Services (HHS), clinical trial procedure costs are the highest in the first three phases of the clinical study. Administrative costs are the highest in phase 4 studies. In most cases, companies face challenges in the initiation phases which are highly complex for planning and forecasting.
The Key Budgeting Assumptions
Clinical Trial Budgeting is prepared in the planning stage prior to initiating the clinical study. The important aspect of trial budgeting is the clear definition of all the assumptions to be considered. The budgeting costs vary based on Visit plan, the projected number of Subjects to be recruited, planned number of sites to be enrolled, Planned number of monitoring visits, geographies in which the study is conducted etc.
5 Best practices – Considerations for accounting for variations in costs
Budget and payment schedule should account for patient retention rates to take into consideration the screen failures, patient withdrawal or deaths, lost to follow-ups etc during the trial process.
Payments should be scheduled after the planned milestone completion and should be following a pattern with the timelines agreed upon by the Sponsor and CRO’s.
Administrative costs must be specified in detail and agreed by all stakeholders and in case of cancellation or termination of the study by the Sponsor, the start-up and running costs will be payable.
The standard procedure costs (commonly referred to as SoC- Standard of Care) are usually paid by the Insurance and before planning for the budget the Investigator should be aware of all the expenses that should not be included in the budget.
IRB fees are updated annually and vary depending on the region the institution is located. It is also based on activities such as review, amendment, etc. These have to be accounted for accordingly in the budget.
One of the key challenges in clinical trial financial management is to properly account for all the multiple subject visits across Clinical Sites and be able to reimburse subjects and sites without error and delays. Cloudbyz Budget Management solution addresses this challenge by a template-driven approach of Visit plan management and using that to auto-create subject visits and subsequently auto create payables based on completion of procedures and visits.
In Cloudbyz Budget solution, the study and site level budgets are automatically linked and the appropriate rollup of budget and actuals happens seamlessly at line level and overall budget level . Once budgets are finalized, budget documents can be generated in the form of Excel or PDF and shared with other internal stakeholders like the finance and accounting department etc. The solution supports versioning and configurable approval process as well.
The solution also enables real-time collaboration between Sponsors, CROs and Sites through secure Investigator and Sponsor portals.
Clinical Research Specialist