5 Tips for Effective Budget Negotiations

Negotiating clinical trial budgets is often a lengthy back-and-forth process between the institution and sponsor/CRO. Consequently, this process can greatly delay study start-up. Here are five tips for more effective and efficient budget negotiations:

  1. Prioritize negotiations on non-negotiable items. Focus your negotiation efforts on institutional budget requirements and patient care items that will not be covered by the patient’s insurance. A common non-negotiable item is study start-up. Many institutions have a threshold dollar amount for start-up that must be obtained to move forward with the study. For this reason, focus heavily on negotiating for the full start-up amount. This may mean not spending as much time negotiating other fees like IND safety reports. It is also important to focus on items not covered by the patient’s insurance. For example, if an angiogram is non-covered in the study situation, focus the per-patient budget negotiations on making sure the angiogram is covered by the sponsor.
  2. Use the coverage analysis as a negotiating tool. Institutions and sponsors typically differ in their interpretation of items that are billable to the patient. If the institution determines that most items cannot be billed to the patient in the coverage analysis, this has a significant impact on the budget. It’s possible that the per-patient total could double or even triple because of different interpretations of standard of care. Most sponsors and CROs will ask why the item cannot be billed to the patient. Reference the coverage analysis when explaining why the item needs to be sponsor-paid. The argument used for why the item is not billed to the patient can also be used as a negotiation argument. Quoting limiting Medicare rules always makes a strong case for why the sponsor should cover the cost of the item.
  3.  Show a sense of urgency when you work with the sponsor or CRO. If they know that you are motivated to the get the budget negotiations done quickly, then they are more likely to respond faster and help you expedite the process. Communicate your timelines with the sponsor or CRO right away. If they do not expect the negotiations can be completed in that timeframe, then this can be communicated to others working on other areas of study start-up. Following up with the sponsor regularly also shows a sense of urgency. Check in with them at least once a week, and respond to edits as quickly as possible. If there are significant edits, it is a good idea to pick up the phone and talk through the edits, which leads into my next tip. . .
  4. Call the sponsor or CRO. Writing out explanations via email can take hours depending on the number of edits. The same edits can usually be discussed within a half hour over the phone. It is not uncommon for more than one person at the institution and sponsor or CRO to review the budget edits. By having a phone call, everyone who is involved in the budget negotiations can be present. This often prevents double review by both parties. After the phone call, it is important to follow-up with the sponsor or CRO via email to document items that were discussed, especially if you agreed to keep certain fees in the budget or agreed on a dollar amount.
  5. Have fee documentation ready. Many sponsors will request letterhead documentation for site fees, especially administrative fees. It can be beneficial to develop a documentation template that can be used across multiple studies. You may need more than one template if different departments have different fees and others have separate templates for observational and interventional studies. Having a standard documentation form is a major efficiency and helps make sure costs are covered. If you save the documentation as a PDF that can be sent with every budget, you no longer need to re-write the fees and justification for every study. Documentation is also frequently required for the sponsor to cover certain fees or dollars amount.

After negotiations have been finalized and the budget is ready to go into the contract, complete a careful review of the budget. Make sure the payment terms were reviewed, the billing designations match the coverage analysis, and that all your edits were incorporated. Typically, budget negotiations have several comments and edits, so they can look pretty messy by the time you finish negotiating. Review the cleaned-up version closely to make sure all the changes were incorporated. Once this is complete, you are ready to finalize the budget.