Putting profits to work in CR side of business

CR sites can make money, and here’s how…

No one asks large pharmaceutical companies to develop and market new drugs as a nonprofit venture. So why would anyone expect clinical research sites to operate at a loss?

Yet, this is how research organizations sometimes operate, even when it’s not their intention.

When Piedmont Hematology Oncology Associates of Winston-Salem, NC, first began clinical research, it was so physicians could offer their patient population a potentially better treatment option. They never paid much attention to the research budget and costs, says Don McCall, RN, CCRC, research manager.

"A lot of sites are naïve like we were," McCall says. "The sponsor sends you a budget, and you just accept it; you don’t know it’s negotiable."

That all changed for Piedmont Hematology Oncology Associates in 2000 when McCall began to look at the profit and loss statements for the research side of the business.

"We looked at it as a separate entity and did cross-accounting for the whole department," McCall says. "A lot of centers don’t do this at all, and they don’t know what their profit margins are in research."

When McCall and investigators took a close look at the business’ financial numbers, they discovered that they were doing research at a significant loss. The research income was not covering the costs of research salaries, benefits, office space, technology, etc.

"We have to look at the numbers," McCall says. "Like any business, our goal is to have a robust research program with trials underway all the time."

McCall used cross-accounting information the next time he received a sponsor’s proposed budget for a clinical trial.

"I told a sponsor that we can’t accept this budget, and the sponsor was okay with that," McCall recalls. "That opened up the door for us."

"Research is a business, and everyone else involved in research runs their program as a business except for sites," McCall says.

"I see our sponsors as our customers," he says. "We provide them with the best service we possibly can, but that service comes with a price because in order to do good service, it is costly, and in order to do research according to GCP [Good Clinical Practice] guidelines, it’s extremely timely and costly."

Research is labor intensive, and regulations add even more time to the work.

"All of the time physicians spend in research and providing proper oversight of clinical trials is an immense amount of their time, and they should be compensated appropriately," McCall says.

Clinical trial coordinators and data managers also spend a lot of time handling documentation, even when everything is done electronically.

"Electronic data collection takes three times longer," McCall says.

"Sponsors think it’s quicker, and it is quicker for them because they don’t have to take the information off paper and enter it into the system," he explains. "But it takes a lot longer for us because we get queries for silly things, such as verifying things on case report forms."

The electronic data capturing systems kick out automatic queries; clinical research organization (CRO) data managers send out queries, and CRO monitors send out queries. Often these are redundant and unnecessary, he says.

"Sometimes our study coordinators don’t know what the sponsor or CRO is asking for," McCall says. "So the monitors come in and explain what they want. But six months and eight patients later, the monitor comes back and says, No, they want us to do it this way,’ and you have to go back and redo your work."

Another thing that sponsors and CROs sometimes underestimate involves the amount of time it takes to do a procedure. For example, a subject is brought in for an infusion. It’s not possible to just give the person the infusion and then send him or her home. The subject has to wait at the clinic for an hour for observation to make sure they do not experience any immediate adverse events or problems, McCall explains.

"Sponsors often do not want to pay for that observation time," he adds.

Since sponsors typically underestimate the amount time their study will take at the clinical research site, there budget also underestimates the site’s costs. So there are few trials where Piedmont Hematology Oncology Associates accepts the sponsor’s budget as it is written, McCall says.

"The product of the research site is data," McCall says. "Sponsors underestimate the value of our information, and I think they do that across the board."

Sometimes, sponsors will underestimate the costs of certain procedures," he explains. "We want to be paid by the sponsor what the insurance company pays us for a procedure."

Other budget negotiation conflicts arise over the definition of "standard of care." Sponsors often add more procedures into standard of care than what could be legitimately billed to an insurance company, McCall says.

Clinical trial sites also make mistakes. They forget to add in the cost of the equipment and technology they need to do research.

"We need copying machines, exam rooms, refrigeration, ECG machines, and all of these things are costly," McCall says.

"I don’t believe it’s up to a site to be paying for these things," he adds. "These costs should be coming out of the budget created for the business."