How Overhead Rates Affect Negotiations in the UK

May 1, 2010
TTC

Applied Clinical Trials

Applied Clinical Trials, Applied Clinical Trials-05-01-2010, Volume 0, Issue 0

Institutional overhead remains one of the more contentious areas in clinical grant management. There can be substantial variations in these overhead rates from institution to institution with often times little immediately evident reason for the differences. Institution overhead rates in the United Kingdom seem to reflect that same imprecision.

Institutional overhead remains one of the more contentious areas in clinical grant management. There can be substantial variations in these overhead rates from institution to institution with often times little immediately evident reason for the differences. Institution overhead rates in the United Kingdom seem to reflect that same imprecision.

Unlike virtually any other developed country, the United Kingdom has a single health care provider, the National Health Service (NHS) in England and Wales, with comparable organizations in the other parts of the country. Yet overhead rates vary among the institutions conducting clinical research for commercial organizations.

Each year TTC reports on the relative costs of clinical grants around the world, drawing upon data in the GrantPlan database. Subscribers to this database conduct over 76% of all the commercial clinical trials. According to the data in GrantPlan, average institutional overhead rates in the United Kingdom have averaged around 25% percent over the last five years, an average figure substantially higher than the average institutional overhead rate, 17%, for the other countries in the European Union. Equally noteworthy is the range in institutional overheads across the NHS.

United Kingdom Institutional Overhead Quartiles

The median (and mean) overhead is 25%, with the lowest quartile at 20%. The highest quartile institutions haw overheads beginning at 30%. It appears that the institutions with the highest overheads though are the most willing to negotiate the actual overhead rate paid by the commercial organizations conducting research at that site. These highest quartile hospitals report an official overhead 10 points higher than actually accepted in the final clinical grant.—TTC (for more information, please contact help@ttc-llc.com).

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