360 View of Contract and Budget Negotiations

June 18, 2012
Lisa Henderson

Lisa Henderson is Editor-in-Chief of Applied Clinical Trials and Pharm Exec. She can be reached at lhenderson@mmhgroup.com.

Applied Clinical Trials

Last week was pretty exciting as far as the topic of contract, clinical trial agreements and site payments goes on the Applied Clinical Trials web site. On Tuesday, the webcast “Transforming Site Contracting, Management and Payment” sponsored by Medidata Solutions offered presentations focusing on the relationship between sponsors, CROs and sites, with an emphasis on the overall financial picture for investigative sites, what that means to the industry as a whole, and how CROs or sponsors could do better.

On Thursday, as part of our Editorial Webcast Series, “How To Improve Your Clinical Trial Agreements” outlined results of a survey from Salvius Legal and Applied Clinical Trials on clinical trial agreements; then offered specific advice and guidance for sponsors and CROs in regard to contract negotiations with sites.

Clearly, if you listen to both webcasts, you would get a complete overview of the issues on both sides of the contract and negotiation fence, and how each can be made better using communication and clearly worded contracts. You can listen to both on-demand for free by clicking on the above webcast titles.

However, having an overview and an awareness does not yet make the current state of affairs rosy.

In our CTA survey results, we discovered that the top cause of study delays—even higher than subject recruitment, believe it or not—is contract negotiations with the clinical site. All of the presenters in both webinars noted what time delays do to the overall financial success of a drug—and it’s not good.

Further, lengthy budget negotiations were noted to be a bottleneck in the overall contracting process 33% of the time.

Interestingly enough, and this gets back to the more site-oriented webinar, 30% of the respondents in our survey said that they will not choose a country for a trial if it is known for “troublesome negotiations.” Those countries included the U.S., France, Spain, Italy, Russia and Poland. The presenters did note that having country-specific knowledge of legal issues would change this dynamic to the positive.

In the "Transforming" webinar, Joan Chambers, COO of CenterWatch, noted that investigative sites are currently operating at a 9% profit globally—although in North America, that actually meant a -3% change from 2010 to 2011, and a +3.4% for that same period in European profits. This could be dependent on the fact that the number of clinical grants awarded to the North American sites has only gone up 3.2% from 2010 to 2011 and for European sites, a full 9.4%.

CenterWatch data shared by Ms. Chambers also noted that sites rate almost half the sponsors and CROs as excellent in regard to efficient contract and budget negotiations. But as Christine Pierre, CEO of Rx Trials and founder of the Site Solutions Summit pointed out in her presentation, is 50% a good mark, or a bad mark from the site perspective?

Sheila Mikhail, who is a founding member of Life Sciences Law, offered the following ideas gleaned from her years of executing contract negotiations on an outsourced basis from biopharma:

  • Use a Clinical Trial Agreement Playbook; outlines many internally agreed positions for contractual issues

  • Use a single template

  • Use a clinical trial agreement checklist

  • Use of metrics to discover efficiencies and inefficiencies in the contract process,

  • Use of technology

 

 

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