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Clinical grant expenditures represent a major portion of the budget for later phase clinical trials. While the relative cost of conducting a clinical trial in a specific geography is not the sole driver in the decision of where to place study sites, relative costs do play a role.

Drug safety has become a significant issue to many portions of society. High visibility issues like the Vioxx litigation have no doubt increased that salience among the general public. Moreover, with changing demographics, economic trends, and wider numbers of medical applications of prescription drugs, usage of these drugs will only increase, as will the accompanying issue of drug safety.

The financial aspect of standard of care in patient treatment has become a major issue for many companies conducting clinical research. Many industry monitors, self-appointed and otherwise, have highlighted the issue of payments to physicians by pharmaceutical companies, including the fair market payment of clinical grants, as possibly influencing physician behavior. Subjects in later phase clinical research must have the malady being treated in the clinical trial. Consequently, many of the treatments these patients receive would and should be covered by third-party payers, typically government agencies or commercial insurance companies.

It now costs more than $1 billion and takes more than seven years, on average, to conduct clinical trials and win regulatory approval to market a new drug. Not only are development costs high and rising steadily, but also only one out of every six self-originated drugs developed successfully completes clinical testing and obtains marketing approval.