Site Prices Are Skyrocketing – Here's Why & What You Can Do About It
By Ed Miseta, Chief Editor, Clinical Leader
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Pricing at clinical trial sites has increased dramatically over the last two years. In a recent outreach effort to my editorial advisory board, several members cited these rising costs as a concern. One stated costs increased because of the COVID pandemic but did not recover even after conditions seemed to normalize. She believes the higher costs may now be here to stay. Another noted site contracts are now a concern for all sponsor companies, and that price increases are even a concern for smaller CROs struggling with steadily rising study budgets.
Staffing shortages are certainly a major part of the problem, and seven of my board members specifically mentioned the ‘great resignation’ as a problem impacting their own companies as well as CROs and sites. The staffing shortages are creating delays and affecting timelines and site engagement for trials. This is forcing sponsor companies to find creative ways to mitigate the risks and address the problem. A big part of the problem is the skyrocketing cost of labor. One board member even noted clinical research coordinators (CRCs) are now seeing clinical research associate (CRA) rates.
“A huge issue we need to address is the salary disparity between study coordinators and CRAs,” said one board member. “Sites are losing staff at a staggering rate because the sponsor companies and CROs hire away their best study coordinators. This has a significant impact on the entire process as sites cannot compete with the higher salaries. These salary challenges are impacting clinical research more than any other issue.”
“We are running out of people with X-number of years of experience,” noted another board member. “How can sites and small companies train less experienced employees as well as people with limited to no experience? We need to figure out how to mentor and train inexperienced potential employees. We need to find creative ways to solve these problems and prevent them in the future.”
A Perfect Storm
Michael Harte, president of the Harte Group, is seeing clients experience the problem firsthand. He describes the problem as a perfect storm of factors coming together. Sites are finding it difficult to hire new employees, like most business across the country. Inflation is causing the price of most goods and services to increase. But Harte notes nursing salaries are also increasing very quickly.
“Many may have opted to leave the profession because of the pandemic,” he says. “Others who were in training may have seen what was going on in hospitals and opted for another career. There has also been a marked increase in the number of trials being conducted. New trials are starting at the same time delayed and postponed trials are finally getting back online. As a result, sites are seeing double the amount of work. If the amount of work is increasing and the number of sites is unchanged, this is a pure supply and demand situation that will lead to cost increases.”
If a site has more potential work than it can manage, how will it decide which studies to accept and which to turn away? Sites can certainly start raising prices and see which companies are willing to pay for the services. If every site does the same thing, an overall increase in the level of prices would be expected. The more likely thought process for sites is they can no longer afford to work on underfunded trials. Sites will need adequate resources to perform the required work.
Harte’s comments were seconded by Ian Wyglendowski, head of strategic clinical partnering for UCB, who is also struggling to deal with the problem. He notes that prices for certain tests and fees have increased two to three times or more. Those higher prices are impacting an industry that was already struggling to rein in the excessive cost of trials. But Wyglendowski is facing another challenge: Understanding if the higher quotes are standard across the industry.
“The market is driving up prices and that makes our job more difficult,” says Wyglendowski. “We look at these prices being quoted and ask if they are fair. When we get that quote that is two or three times higher, how do we know it is the right price? When prices are rising, how will sponsors know what they should be paying for certain services? I feel like many companies just don’t know anymore, and that makes budgeting a challenge. There is a fine balance between giving sites the payments they are asking for versus ensuring fair market value.”
Cost Tools Lag
The increase in prices cited by Wyglendowski sounds about right, according to Michael Harte, president of Harte Group. He says sponsors should take the data from estimated payment databases and multiply them by three to properly budget. If interest rates continue to rise, and people continue to leave the workforce, Harte believes that number may need to be increased to four.
There is a cost estimating tool, IQVIA GrantPlan, that helps companies forecast costs. GrantPlan is billed as a comprehensive and accurate benchmarking tool allowing sponsors and CROs to confidently forecast and budget their trial costs and determine the fair market value of site activities. By combining various sources of industry data, GrantPlan provides fair market values and itemized costs that enable users to forecast and budget across all phases and therapeutic areas.
Unfortunately, when costs are rising, there can be a lag in databases that reflect current prices. Most databases that provide cost data will rely on contracts that have already been executed. When prices start to rise, it can take time for prices in the database to reflect the upward trend.
The situation puts pharma companies under pressure. Wyglendowski notes clinical operations executives need to get approvals to sign contracts with sites. Only then can sites begin recruiting patients.
“I think some pharma companies are likely taking a greater risk by agreeing to these higher costs,” he states. “They know some of these quotes push the boundaries of fair market values. I expect that some of the more conservative sponsor companies will negotiate harder and may drop some sites all together.”
Daniel Fox, CEO of the Clinical Research Payment Network and a clinical research site advocate, disagrees with what sponsor companies might consider to be fair market value. “Research is not in an inflation vacuum,” he states. “Therefore, these quotes are not inflated. I also don’t think there is anything fair about what sponsors consider to be ‘fair market value.’ I have yet to be presented with something sponsors claim to be FMV that actually pays the bills. I believe sites try their best to run lean and reduce costs, but budget offerings can often be unreasonably underfunded.”
Difficult Problems To Solve
Some of the issues leading to higher site costs will be difficult to solve. Inflation will not be easing anytime soon, nor will the challenge of hiring qualified employees.
Another problem is physician contracts. Harte notes many sites are being sought by hospitals or other health care institutions. Once they are under contract, they are no longer permitted to refer patients to stand-alone sites or physicians who practice under a different health system. That makes it difficult for physicians to refer patients for a trial, even when they know a potential treatment might exist for the patient. That will make the patient recruitment process longer and more expensive. Fox agrees, noting it is sad to see legal and financial barriers impacting or preventing patient care.
“Sponsor companies need better partnering opportunities with sites, physicians, and staffs to help alleviate this issue,” states Harte. “Pharma also needs to be more transparent with sites. We need to work together as a team. A lack of transparency with sites on the status of studies leaves them in the dark. Sponsors also need to be aware that sites are being hit with a lot of technologies. With short or limited staffs, site teams will tend to migrate to what is easy, such as recruiting systems and dashboards that attract the wrong patients.”
Still, the site cost issue is a difficult one. Harte has seen sponsors try everything from offering supplementary staff to online help and educational seminars. Thus far, none of these efforts have made an impact.
What Can Be Done?
Fox agrees that sponsor companies should get used to the higher prices, which are being driven by inflation and mandatory and competitive salary increases.
“The staffing and supply chain shortages are all pinching research and causing costs to skyrocket,” he says. “I do not expect these higher costs to go away. With a 7% inflation rate last year and higher increases likely to come, budgets will not improve anytime soon.”
Still, Fox notes when it comes to the need to reign in spiraling costs, sites feel the same as their sponsor partners. Future patients, and their access to needed medicines, depends on how research is implemented today. He does believe more effective trials are key to lowering clinical costs.
“To fight this inflation the industry should focus on ways to increase efficiency and reduce costs in the research model,” he says. “Simply put, the easier pharma can make life for sites, the less the trial will cost. Pharma needs to adopt a site-centric approach to accommodate sites and their needs. For example, I recently spoke to a site director in Texas who had to hire three full-time employees just to collect revenue from active contracts. The industry has become so non-compliant in its promises that sites must hire additional resources just to fight for the money they have already earned. They also shoulder millions in debt that they are not structured to accommodate simply because of unpaid bills. These stressors create financial risk and add to the increasing clinical research costs.”
Fox has one additional suggestion: Stop outsourcing per trial and allow sites the opportunity to develop their own research logistics. Every vendor and new technology that a sponsor company brings into a site, which is specific to their trial, will force sites to invent processes to operate. Every portal, training, retraining, certification, and new software product will increase the cost of a trial. A concerted effort by the industry to reduce these burdens on the site will impact overall site costs.