Budget negotiations: Putting in the time pays off
I find it fascinating that as sites we often are engaged in multifaceted discussions regarding our budgets and the inconsistencies related to payments and payment terms set forth by the sponsor and CRO—yet we also are inconsistent in our expectations.
A recent budget discussion with a CRO related to a new potential project began with dialogue about the budget terms on the front end of the feasibility assessment. This was refreshing, as it makes no sense to spend time working through feasibility if a budget is far below what the site requires. During this dialogue, the CRO requested we be clear on budget parameters from the get-go, as they recently had spent many hours in selecting two sites and performing extensive feasibility and enrollment assessments only to have the site request double the budget requirement when the Clinical Trial Agreement (CTA) was presented to them for signature. One must ask himself, in consideration of this situation: How does this type of “negotiation” help build trust between the site and the client?
To a certain degree, this stage of outreach to the site during feasibility is the most important to the relationship. This is the period during which expectations are set, commitments are made and negotiating skills are honed—and trust, or lack thereof, in the partnership begins. These introductory impressions (and, in some cases, the first interaction between the potential parties) are more about the dynamics than they are about the payment structure. Simultaneously, the sophisticated site realizes that this is the critical time to gather information on every aspect required to perform the work of the trial. This course of action will allow you to best predict and avoid either agreeing to a budget that is inadequate or requesting payment that may remove you from the playing field immediately because site projections are over budget. These discussions also are the most relevant, as the site has the opportunity to present itself as knowledgeable, thorough and conscientious related to its overall approach to the conduct of the trial.
Another element of the budget planning stage involves accurate and fact-based enrollment projections. Determining the minimum and maximum number of subjects that you will be allowed, and that you agree to support, is critical to fulfillment of the obligation that the site makes to the sponsoring entity. Nowadays, and particularly in fast-enrolling studies with the potential for large numbers of patients enrolled and competitive enrollment parameters, we request a CTA that covers up to a maximum number of subjects that may be enrolled. This saves time and labor, and eliminates the need to amend a CTA for more patients if lower limit targets are met. It also is significant for sites and sponsors/CROs to be cognizant of indirect or “hidden” study costs. Facility overhead, records storage or administrative fees should be considered when preparing budget proposals.
This column is not aimed specifically at payment terms, as that is subject matter worthy of a discussion all its own. It is quite clear through advocacy efforts being conducted by organizations such as The Society of Clinical Research Sites (SCRS), however, that payment terms are becoming dramatically altered in the sites’ favor from quarterly to monthly—and it is hopeful that this new trend will soon be the norm. Be unafraid to request and require such terms in the negotiation process.
It is important to give significant attention to all stages of the negotiation process; however, many consider the bargaining stage to be the most critical (see Figure 1 for the stages of the negotiation process). During this conversation with the sponsor or CRO, consider adopting an integrative bargaining strategy, which focuses on creating agreements suitable for all parties based on the needs important to each side. It is essential for both sides to understand that they are speaking with current or potential clients with whom they will prefer to maintain a relationship, regardless of the outcome of the current negotiation.
There is an old saying—“the harder you work, the luckier you get”—and that philosophy certainly rings true for budget negotiations. Putting the time and resources behind this stage of the bargaining will pay off for all partners. The site will be fairly reimbursed and motivated to perform up to expectations, and the relationship begins with reasonable expectations and goals agreed to by all parties. Sound like a panacea? Not really, if you just work at it!
Jeffrey Adelglass, M.D., F.A.C.S., is founder, owner and president of Research Across America (RAA), a U.S.-based, privately owned, multidiscipline CRO. RAA owns multiple research sites across the U.S. and has performed more than 1,800 clinical trials in multiple disease areas. Email comments and questions to email@example.com.
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