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Data confirms more sites are asking for separate startup fees and that oncology trials are leading the way.
There has been a buzz from clinical trial sponsors that they feel more and more sites are requesting separate payments for startup fees in their budget agreements. Sponsors are feeling pressure to answer why more investigators are requesting these fees and what activities investigators typically consider part of a startup fee.
Information on numerous clinical costs, including startup fees, have been collected from over 26,000 protocols and over 237,000 investigator contracts worldwide and compiled by Fast Track Systems for use in the proprietary database supporting Grants Manager.1 An analysis of that database showed that sponsors are indeed contracting more investigator budgets that include startup fees, as seen in U.S. and Canadian clinical trials.1 Presently, more than half of investigator contracts in the United States include a startup fee, supporting the sponsors' perceived dramatic increase in startup fee requests from investigators.1
Further analysis indicates that this trend does not appear to be significantly influenced by clinical phase, therapeutic area, sponsor type (pharmaceutical vs biotechnology), investigator site type (those affiliated with universities or hospitals vs independent physicians), subject status as inpatient or outpatient or even total number of completed subjects the budget is based upon. Figure 1 does, however, show an interesting subtrend in the increasing quantity of contracts including startup fees; the increasing occurrence of startup fees in oncology investigator contracts are outpacing the average increase observed in all other therapeutic areas.1
Figure 1. Oncology is outpacing all other therapeutic areas when it comes to study grants requiring startup fees.1
So if the expected clinical drivers are not behind this trend, what is? Sponsors are obviously aware that academic medical centers as a whole have been paying closer attention to their financial expenditures and reimbursements with regard to conducting clinical trials. Certainly, many research universities have even created dedicated Clinical Trial Offices, which typically serve to approve and oversee all clinical trials conducted by their academic medical centers.2 A former State University of New York (SUNY) Clinical Trial Offices Director specified that negotiation of "proper institutional indirect cost rates" meant inclusion of startup fees.3
Many Clinical Trial Offices have SOPs in place that require payment of a startup fee. However, academic medical centers are not the only site types analyzing their clinical study participation costs. Experts in the industry have encouraged even independent physicians to dedicate staff and resources to reviewing their expenditures and reimbursements for clinical studies to ensure the viability of continued clinical research participation.4 This industry viewpoint shift may well be a driving force behind this sweeping change.
Figure 2. It appears grants contracted without startup fees have become a thing of the past in the United States.
So what activities does a startup fee cover? The startup fee has only recently become a widely contracted reimbursement (see Figures 2 and 3).1 This has caused a fair amount of variation in what is considered part of the fee.
Figure 3. The number of grants charging startup costs is starting to catch up with the number of startup fee-free grants in Canada.
The aforementioned former SUNY Clinical Trial Offices Director itemized pharmacy setup, agreement processing, file archiving, IRB review, and principal investigator and coordinator study initiation as the activities included in a startup fee.3 Analysis of Fast Track's data from across the industry and globe revealed some similar components. Contracts that specified what the startup fee covered often cited study preparation costs, including preparation for submission to the ethics committee, protocol review, and general administrative setup. Pharmacy setup fees were usually singled out as a separate reimbursement.1
Some sponsors argue that these activities are reimbursed as part of the overhead fees factored into the cost per patient. However, sponsors are increasingly contracting competitive enrollment agreements with investigators.5 For investigative sites that initiate these competitive enrollment studies but fail to enroll subjects before enrollment is terminated, setup activities will go unpaid unless the site negotiated these costs as separate fees. The University of Michigan Medical School states, "A contract that garners $1800 for an IRB Fee and $1562 for advertising ($1250 + 25%) regardless of patient enrollment is much more viable if it enrolls no patients in competitive enrollment than one that has the costs built into the per patient amount."6 While the University of Michigan Medical School used typical pass through costs in their example, this is a financial principle driving many sites to request or require startup fees as a separately reimbursable item.
It is important to make the distinction that startup fees are not bonuses. In their June 2000 report, "Recruiting Human Subjects: Pressures in Industry Sponsored Clinical Research," the Office of Inspector General (OIG) defined bonuses for recruitment as "payments given to investigators purely to encourage speedy enrollment."5 The startup fees defined herein are remuneration for legitimate costs incurred during the initiation of a clinical trial by an investigator (see sidebar: Typical Startup Fee Itemization). In fact, the OIG has posited that the practice of paying investigators on a per-subject basis in a competitive enrollment schema "penalizes those sites with a slow startup period and encourages aggressive recruiting."5
Typical Startup Fee Itemization
It is therefore reasonable to view proper startup fee reimbursement as a way of relieving sites of this potential financial conflict and thereby ensuring human research protections.
In summary, startup fees are increasingly being negotiated into contracts by all types of sites in all areas of clinical research.1
In light of the coinciding increase in competitive enrollment schemas and their potential for creating ethical conflicts for investigators,5 proper reimbursement of startup fees should continue to be encouraged. Sponsors must evaluate their current budgeting practices and determine a compliance strategy for these fees. A starting point might allow for reasonable startup fees to be paid out upon study initiation in the case of studies employing a competitive enrollment design.
In these cases, sponsors may be able to negotiate further which line items they will base overhead calculations on or otherwise adjust overhead in order to compensate down slightly for the upfront payment. Likewise, if the site contract is guaranteeing the investigator a minimum allotment of subjects, then perhaps these fees should be considered already included in the overhead specifications just as they were in the past. In this way, sponsors ensure that sites are appropriately reimbursed for startup fees and overhead expenses, and the fees could not be misconstrued as bonus payments.
As mentioned, some sites are considering startup fees a standard part of doing business with them; sponsors will need to evaluate these sites on a different basis, taking into account nonfinancial considerations such as thought leaders, available subject populations, etc. In any case, sponsors must think about and develop strategies for their own best practices for startup fees—it is clear that most investigators have already done so.
Lori Shields* is vice president of operations at Fast Track Systems, Inc., 20 Ash Street, Millennium I, Suite 330, Conshohocken, PA 19428, email: firstname.lastname@example.org. Sondra Pepe, CCRP, is client relations manager at Fast Track Systems, Inc., and Rafael Campo is senior data consultant.
*To whom all correspondence should be addressed.
1. PICAS Database, 1991–2007. Proprietary Database of over 25,000 finalized Clinical Trial Protocols and over 250,000 Negotiated Investigator Contracts Worldwide. Fast Track Systems, Inc.
2. Multiple Academic Medical Centers including but not limited to: The University of North Carolina at Chapel Hill, Office of Clinical Trials: http://research.unc.edu/oct/index.php; The University of Iowa, Clinical Trials Office: http://research.uiowa.edu/cto/; Emory University School of Medicine, Clinical Trials Office: http://med.emory.edu/research/cto/ (all Web sites accessed January 24, 2007).
3. K. Durdon, "What Can a Clinical Trials Office (CTO) Do For You?" SoCRA Source, 48, 19–23 (May 2006).
4. C. Pierre, "Participating in Clinical Trials: A Guide for Practices," Medical Practice Management, 86–89 (September/October 2001).
5. M.R. Yessian, "Recruiting Human Subjects, Pressures in Industry-Sponsored Clinical Research," OEI-01-97-00195, Office of Inspector General (June 2000).
6. University of Michigan Medical School. Corporate Budgeting Issues. Available at: http://www.med.umich.edu/medschool/grants/budgeting_issues.htm (accessed January 24, 2007).