The people at Fast Track Systems are experts at the detailed analysis of clinical trial budgets by cost item, medical specialty or geographic area.

The company has 25,000 protocols in its database, and adds perhaps another 4,000 annually. It offers software, services and data that help sponsors design and budget trials. Now Fast Track Systems says the sponsor community is on guard about startup fees that once might have been categorized as “overhead.”

On the other side of the table, of course, the view is different. Investigative sites that participate in one trial tend never to try another, for a mixture of familiar economic, scientific and workload issues. Even industry-friendly clinical research coordinators and investigators have more important things to do than put on their green accounting eyeshade, as we wrote earlier this year.

Blame Oncology

It’s not news that U.S. sites may have razor-thin profit margins or actually be in the red when participating in clinical trials. In that context, a new bone of contention is the startup fee. Fast Track says startup fees first became common in oncology trials, which tend to have a bit more difficulty finding and retaining patients.

Financial Protection

In some cases, sites request the fees after hearing about them at investigator meetings. For sites that do not actually know if a particular trial was a profitable endeavor, or when a financial break-even point was reached, a startup fee can be a simple, easy precaution against a trial that could be cancelled early or one that will not attract patients easily.

Up to a point, the people at Fast Track Systems are sympathetic, especially with regard to oncology trials. “We do know from protocol analysis that those protocols tend to be more complicated,” says Lori Shields, VP of operations at Fast Track. “There is more startup activity that is required of sites than other therapeutic areas.”

The sponsor community, Shields hastens to say, has no categorical opposition to startup fees in any therapeutic area. Many sponsors pay startup fees gladly. In some trials, in some cases, they may be appropriate and necessary.

But the demands for the fees are becoming more common, thanks to the investigator grapevine. And some out-of-pocket startup costs at sites are not always easy to document. “Our clients have been looking for a way to validate what the costs are,” says Shields. “None of our clients are looking to keep sites from not being active in a trial. They’re looking for a fair compensation for actual costs.”

Seeking Data

The sponsor community, she says, wants to keep sites happy. But the industry also wants transparency into real costs at the site level. And that may not always be available for either technical reasons (the data don’t exist due to nonexistent financial systems) or tactical ones (the sites don’t want to disclose it to increase their negotiating leverage).

In some cases, what a site is categorizing as a startup fee might be more legitimately described as “overhead,” a fairly well understood and accepted budgetary item in clinical trials. But Shields says overhead, too, can be something sponsors increasingly want to see itemized and validated.

“Every site has its own definition” of overhead, Shields notes. Some sites divulge that formula or definition. Some do not. “It’s a pretty big ace to keep up your sleeve,” she says of the site tactic. “Many sponsors are pushing back to know what is covered under overhead.” And when there is no information forthcoming? Says Shields: “Some sponsors have refused to do business with sites like that.”

Longer Negotiations

Anti-kickback legal questions, of course, are a tangential element here. Sponsors would like to incentivize high-performing sites without running afoul of regulations about inappropriate economic inducements to investigators. Here is an old HHS document on the topic, which notes different rules apply to government-sponsored clinical trials.

Fast Track can help sponsors with their negotiations, marshalling highly granular data on the cost of a particular type of blood draw in a specific medical specialty in a certain metropolitan area. But the startup fees are a new source of tension in the site-sponsor relationship. As with any other contractual issue, this one can be resolved. But that will certainly not shorten the contracting process.

CRO Strength

Investigative sites, of course, will never have the extensive access to historical clinical trial costs that sponsors enjoy, and thus will permanently be at a disadvantage in talks with large pharmas. What’s more, investigators’ billing systems will never be designed for clinical trials but for ordinary medical practice. So they may not know what to charge for overhead or startup—or be able to prove that a startup fee was warranted.

The startup fee issue also provides insight into the larger and quite familiar phenomenon of the ascendancy of the contract research organization (CRO). Each CRO typically knows its costs in minute detail; Fast Track has a separate database devoted to such trials.

The simple financial systems at clinical sites may help explain some of the general ascendancy of CROs, which have prospered at the expense of small physician practices and academic medical centers. Such sites may have deeper ties to the research community than CROs, but much less sophisticated financial systems.

For the industry as a whole, the risk is that there could be more attrition from the ranks of investigators if they feel it is not possible to be fairly reimbursed for costs. If startup or overhead costs can be successfully documented, on the other hand, it means that the price tag for clinical development is going to rise even faster.