A Financial Coming of Age for Clinical Trial Investigators

Cost constraints on the pharmaceutical industry have forced the industry to negotiate for lower “bottom line” costs for the conduct of clinical trials from clinical trial investigators and from contract research organizations (CROs). Although the bottom line is certainly under pressure, negotiations over the payment terms for these clinical trials have also intensified. The pharmaceutical industry has traditionally negotiated to pay investigators and CROs after their performance on a study has been documented, while lately investigators and CROs are requesting payment schedules that provide for more payments on an accelerated basis.

This article looks at a common Phase III clinical trial scenario and attempts to: 1. mathematically quantify the investigator's percentage-of-completion for the study on a monthly basis, and 2. contrast this figure with the actual percentage of clinical trial budget paid. By comparing the calculated amount of work done versus the actual budget paid, this article hopes to determine whether current clinical trial payment schedules favor the investigator/CRO, favor the sponsor, or are relatively neutral.