Key Cost Drivers in Clinical Research: Guide to Successful Budgeting

Proper study budget is vital for a successful trial for both parties, contract research organizations (CRO) and pharma companies. Therefore, it is essential to take the time and prepare your financial plan by thoroughly thinking of all expenses.

So, what does a typical clinical trial budget consist of? First of all, the study budget can be broken into two main big parts: the cost of CRO services, and pass-through costs (PTC).

PTC, for their part, are all the expenses that are passed directly to the Sponsor at actual cost:

• Site and PI grant fees—grant fees paid to principal investigators and sites for the recruitment of patients; these costs often comprise the most significant part of the study budget;
• Vendors’ costs—Central Labs, IDMC, depots, ePRO, and any other vendors, if they are subcontracted by the CRO;
• Comparator and concomitant medication—depending on the study design, purchase, and logistics of these might add up to quite a significant sum that should be planned for in advance.
• Study supplies, equipment—complexity of study procedures may require specific equipment not usually used at site in routine practice, so there might be a need to purchase it for the study. Sometimes it can be expensive to procure, deliver, and then at the end of the study, collect it from the site.
• Travel costs, investigator meeting costs—keep in mind that travel costs may also form a substantial part of the budget, depending on the study design and needs (for example, frequency of on-site monitoring visits and site geography). Another important factor to be taken into consideration, especially when planning a multinational clinical study, are currency fluctuations that may influence the cost of travel, which is very hard to predict or plan for.
• Logistics and courier costs, depot services—these costs do not only depend on the study geography, but on the number of subjects (and, as a consequence—sites) as well. The larger the sample size is, the more medication and biosamples shipments, thus the more expensive the study is. And again, do not forget about currency fluctuations. So, it is imperative that logistics managers help plan the budget as precisely as possible.
• Regulatory authorities’ fees and patients’ insurance—make sure to include all local RA (as well as LECs—where applicable) fees and patients’ insurance that directly depends on the sample size and on the study phase and local country requirements.
• Questionnaire license fees—don’t forget about the licensing fees that can be both paid and free of charge. In certain cases, they can be accompanied by considerable costs.
• Taxes and bank commissions—local specific requirements for taxes and bank commissions vary among countries. So, your partner CRO should be responsible for double-checking that.

Taking a deeper dive into the structure of the CRO service costs we will see the following:

• Site management and monitoring—one of the highest in the overall structure of service fees, and it may account for the largest part of the clinical study budget. Amount of monitoring (including site initiation visits, interim monitoring visits, and closeout visits) will depend on both the sample size and Sponsor’s requirements towards SDV (Source Data Verification) percentage.
• EDC, data management and biostatistics—in general, data management costs strongly depend on the number of patients and sites. Another powerful cost driver for the cost of these services, is the complexity of CRF (which, in turn, depends on the amount of study procedures) as well as the duration of the study.
• Project management—the cost of project management (PM) depends on study duration and complexity (including number of sites, countries and specific vendors involved). And even though there is no direct connection between the number of subjects and cost of PM, if the increased number of subjects requires involvement of additional sites or even countries—this of course will add to the project management cost.
• RA support/CTA submission—geography definitely has an impact on the cost of regulatory support services, as the duration of clinical trial approval and the CTA process itself varies (sometimes significantly) from country to country. Different countries and regions may have their own requirements for submission packages and sometimes it can be a challenge to put everything together. For instance, in Russia, the package is relatively easy to collect as it is similar to what EMA and FDA require, but all documents should be translated into Russian language, which takes time and some additional costs. In Ukraine, the package is also simple, as they EU CTA for initial submission and EU requirements (for example, submission of complete IMPD for IMP), but the Ministry of Health requires a lot of documents from investigators, not only principal investigators. Accreditation and certification of each medical institution involved in the trial have to be collected and reviewed for validity. Of course, collection of such packages takes more time and costs are higher with respect to the services. Meanwhile, there is no need in full translation of study core documents into Ukrainian.
• Medical writing—even though the cost of services connected with medical writing, and CTA package preparation are normally lower than other project costs, it is hard to overestimate the importance of biostatisticians’ and medical writers’ work - both experts’ decisions regarding study approval and the efficiency of the clinical trial depend directly on properly and expertly prepared study design.
• Logistics—when we say “logistics” here, we are talking about CRO support in coordinating the import and shipments of investigational drugs, study supplies, concomitant or comparator medications, biosamples (while the cost of those shipments are pass-through costs, described above).
• Pharmacovigilance and quality assurance—quality assurance costs spent on maintenance of QA and QC systems, training and audit expenses, as well as PVG, even though highly important, usually comprise a smaller part of the overall study budget.

What if out-of-scope happens?

However, contingencies are hard to avoid in real life, therefore it is necessary to be ready to face the out-of-scope. So, how to find ways to effectively manage it? Indeed, with large-scale international studies, especially in the long term, it is almost impossible to map out study budgets with 100% precision. The majority of companies have all the responsibilities of project managers or those of other project-related specialists listed in their SOPs and project management plans. What is more, take a tip from insiders—if a project manager not only presents an issue of out-of-scope to Sponsor, but also comes up with a possible solution within the current study budget, it will be clear evidence of his professional competence and individual approach to clients. There might be some internal monetary resources if you look into the budget carefully. For example, depending on how the enrollment goes at each site, you can adjust monitoring frequency and extend the break between visits but make them longer. This is an opportunity to cut back on travel costs which, in case of big countries like Russia, might be quite significant. Besides, the CRO service cost for a two-day monitoring visit will be lower than two one-day visits, as the CRA will not have to spend additional time travelling to site. One more thing which can help avoid out-of-scope situations is an accurate and detailed budget grid. For example, the budget template of OCT Clinical CRO consists of over 400 items and covers all the tasks that will be done for a particular project, which provides maximum transparency and reduces the risks of hidden costs. Planning for the unexpected, such as costs associated with slow enrollment, protocol amendments, additional IMP imports and other contingencies—is, indeed, of paramount importance.

Irina Petrova, MD, is the Director of Clinical Operations, OCT Clinical​