Maintaining sufficient financial oversight in clinical studies will present several challenges, I sat down with Helen Blanco, Vice President of Operations at Cytovation ASA to learn more about this, as well as the strategies trial sponsors can adopt to keep within budget, ensure regulatory compliance and be ready for audit or inspections.
Helen’s experience means she can speak from a small, medium and large trial sponsor and CRO perspective, with over 20 years spent actively managing trials.
Common Financial Challenges
Each trial sponsor is likely to face their own challenges when conducting clinical research, however common challenges faced are likely to be,
“Ensuring that payments of invoices are aligned with deliverables,
Contracts set up with monthly fees are; not giving high clarity on what has been delivered for amount invoiced,
and if sponsor has overpaid vendor and trial is stopped: it can be a challenge to get back the overpaid amount” Helen adds, “this is especially problematic for smaller trial sponsors.”
Strategies for Accurate Budgeting & Forecasting
Budgeting and forecasting from a trial sponsor perspective is paramount to ensure that there is enough internal/ external funding to carry out the trial. To budget Helen suggests that sponsors use a “100% milestone-based payment schedule” suggesting that a minimum of “80%, but then under condition of only milestone payments until end recruitment” – this would incentivise the CRO to meet timelines of work, and ensure the sponsor is not paying for work not yet carried out.
When budgeting, she would also recommend shopping around to collect a “Ballpark figure provided by 5 CROs prior to finalizing budget for the studies” – this can then be used to anticipate total cost expected when seeking investment for the study.
Lastly, “Review of budget by function, to get confirmation if realistic” – always rely on the function experts internally to ensure that forecasts are realistic prior to going ahead with the agreement.
Financial Oversight for Regulatory Compliance & Sponsor Agreements
Frequent reviews, and finite record keeping is your route to success to ensure regulatory compliance, as well as alignment with agreements for your study. Helen recommends a schedule of:
“Review of accrued cost each month per function…
Invoices are reviewed against agreement/contract prior to approval, with the clinical department responsible for final approval of invoices for clinical studies…
Review of financial status/invoicing during the 3rd and 6th monthly governance meetings with CRO/vendor upper management…
Documentation of reached milestone or documentation of PTC required, prior to approval”.
Monitoring Trial Related Financial Transactions & Expenses
Maintaining a culture of oversight will lead to effective monitoring of financial transactions and expenses, updating a “Monthly review of accrued cost” will lead to discrepancies being identified to then be raised with the service provider…
Helen lists the discrepancies commonly found:
“Vendor/CRO is invoicing prior to deliverables have been completed, PTC not detailed or provided documentation for the full invoiced amount, and PTC not aligned with contract/agreement, e.g. CRAs staying at 5 star hotels or booking business class, not agreed with sponsor”.
Once identified these need to be flagged with the vendor/CRO to ensure swift resolution.
Driving Effective Communication & Collaboration
Clinical studies will often involve multiple stakeholders and complex financial relationships, as such effective communication and collaboration between finance departments, study investigators, sponsors and all other relevant parties is essential for success.
To drive this culture of collaboration, Helen applies the following principles when conducting studies:
“Train the CRO Project managers, vendor project managers and sponsor study manager how to monthly review the accrued cost, i.e. deliverables the last 30 days and review against the agreement. Follow up on investigators via CRO that they invoice on 3rd monthly basis (included in site contract), not to get a too high accrued cost for investigator fees and conduct monthly meetings study manager/clinical team and finance, reviewing the accrued cost”.
In conclusion, conducting clinical research poses various financial challenges for trial sponsors. Issues such as aligning payment with deliverables, unclear contract terms, and difficulties in recovering overpaid amounts can be particularly problematic for smaller sponsors. To address these challenges, accurate budgeting and forecasting, shopping around for cost estimates, and involving function experts in budget reviews are recommended. Financial oversight, including frequent reviews and record keeping, is crucial for regulatory compliance and adherence to sponsor agreements. Monitoring financial transactions and expenses, flagging discrepancies, and promoting effective communication and collaboration among stakeholders contribute to successful study management.
Helen Blanco will be presenting on Financial Oversight in Clinical Studies at COG Europe, taking place on the 10th & 11th October 2023, in Milan, Italy. More information can be found here: https://www.thepbcgroup.com/cog-europe
** Disclaimer: the views shared here are the authors' alone, and not of the Pharmaceutical Business Conference Group, Cytovation ASA or any other organisations **