Finally Getting It Right: The Future Of Forecasting And Making Investigator Payments
By Charlie Nicholson, CFO, Premier Research
Here’s an odd contradiction: It’s difficult to overstate the importance of efficient and timely investigator site payments to successful execution of clinical drug trials. Yet contract researchers have done a consistently poor job managing the payment process, frustrating the people we count on to conduct our trials and putting the very outcome of those studies at risk.
No, we’re not actively indifferent to the need to get this right — but few have made it a high priority, either. As a result, one in three North American study sites report waiting 90 days or more for payment, a troubling fact when you consider the importance of cash flow to these small businesses. Investigators and their staffs waste time tracking fees and chasing payments, dissipating their energy and diluting their ability to focus on their real priorities: recruiting, treating, and caring for patients.
All that churn can cause people working at those sites to look elsewhere, siphoning off the best talent and interrupting continuity. CROs and sponsors, meanwhile, struggle with laborious and inefficient processes that cost everyone time and effort. And if executing payments is this trying, how much harder is the more difficult job of forecasting those payments over the life of a trial?
There’s a lot at stake here — investigator payments account for about half of a typical study’s cost — so companies are adopting new approaches to making and forecasting payments. Some show great promise in improving these processes.
Thousands of transactions
Clinical trials are remarkably complicated undertakings. Thousands of interdependent actions and transactions revolve around the biggest variable of all: sick people who have volunteered to take part in a large experiment with a very uncertain outcome. It’s a welcoming environment for new service offerings that ensure more timely and accurate site payments, automating the process to reduce manual effort and tame complexities that include currency exchange, regulatory data reporting such as the U.S.-mandated Sunshine Act, financial reporting across borders, contracting party issues, and value-added taxes.
Getting such payment processes to work as promised — ensuring that sites get paid on time and realizing a major reduction in administrative effort — is key to selling such a service. Making it a standalone product that’s available to any sponsor, regardless of which CRO is managing the trial, would be ideal.
Even more challenging is streamlining the task of investigator payment forecasting. This is especially important to small pharma and biotech companies, which often live on a precarious financial edge. Most are thinly staffed and have minimal infrastructure, often pressing scientists and clinical operations staff into critical financial and administrative roles. Some are so small that the entire enterprise hinges on a single compound. And all face unrelenting pressure from investors to reach their next product milestone.
And it’s not just investors who get impatient. Key opinion leaders in the investigator community won’t hesitate to talk about a negative experience they’ve encountered with a sponsor or CRO, so it pays to maintain a positive reputation within the drug development community.
Situational and financial awareness
Clearly these companies need to maintain a high degree of situational and financial awareness — but how? Most are limited by manual, spreadsheet-based processes that offer little ability to forecast how investigator payments are spent — and we’re talking about a lot of money. While site payments consume about half of the average clinical trial’s cost, that share increases when we’re working in longer and more complicated studies focused on cancer and rare diseases, the indications where these small pioneers specialize.
To compound things, clinical trials are not linear events, but evolve constantly. The most carefully engineered projection often is little better than an educated guess, so CROS need a tool that helps quickly update financial projections for their clients. But our industry has a generally poor track record in managing trial data, spreading this important role throughout the CRO and sponsor organizations and making little effort to consolidate maintenance and administration of the information.
When the data becomes overwhelming, the default response has been to manage it by adding people, but that’s an ineffective answer to a problem that requires an automated solution that can manage thousands of moving parts. What’s needed is a tool that helps trial participants see what’s happening in the moment and adjust quickly when things change — speeding the creation of trial forecasts, improving forecast accuracy, and flagging forecast variances while maintaining site and CRO investigator budgets in real time and in one place.
Better cash management
Sponsors and CROs must be able to regularly monitor trial expenses based on factors such as patient enrollment, number of sites, enrollment timing, individual site performance, and activity costs by site. Optimally, expense forecasting is based on actual numbers that are updated continually, preventing over- or under-requesting of funds and improving cash management overall. These companies need a data system that enables all parties to make better decisions faster, strengthening CRO-sponsor relationships, retaining and motivating the highest-enrolling, best-performing sites and ultimately producing smoother-running trials that help get valuable new products to market faster.
Small companies won’t be the only ones to benefit. Such investigator payment and forecasting service offerings can be scaled to fit the needs of large pharma companies, some of which have shown significant interest in such offerings.
All clinical trials are data factories. That wealth of information can overwhelm, or it can be managed for optimum visibility and maximum productivity, facilitating productive CRO-sponsor relationships and helping speed introduction of life-changing treatments. We see a great market for innovative planning and payment management solutions and great potential to expand their application as the need for specialized clinical research services continues to grow.