Fair Market Value Assessments a Crucial Part of Evaluating Investigator-Initiated Trial Proposals

RESEARCH TRIANGLE PARK, NC--(Marketwired - February 25, 2015) - Compliance is a critical concern for investigator-initiated trial (IIT) management teams. In today's regulatory environment, the benefits of an IIT can easily be overshadowed -- and the company's reputation ruined -- if the public believes the funding was excessive. For this reason, it is crucial for IIT teams to ensure that IIT budgets, especially investigator payments, are set at fair market value (FMV).

According to pharmaceutical intelligence provider Cutting Edge Information, IIT teams conduct a thorough FMV assessment of proposed budgets when reviewing IIT submissions. However, "The first step toward a quality FMV review actually occurs before the investigator submits the proposal," explained Ryan McGuire, head of research at Cutting Edge Information. "Teams must effectively communicate the need for an itemized budget to be accompanied with each proposal. Once the investigator submits an itemized budget, the IIT team can cross-reference each activity in the trial protocol against internal and third-party FMV databases."

According to Cutting Edge Information's newest report, "Investigator-Initiated Trial Management: Expedite Approval Timelines and Establish Compliant Funding Practices," 13% of teams reject an IIT proposal if the budget fails the FMV assessment or is otherwise unacceptable to the evaluation committee. Another 43% of teams will agree to fund only parts of the proposed budget.

One line-item that teams typically evaluate is staffing overhead. The FMV budget for staffing overhead will vary greatly based on the size and type of study because it is commonly calculated as a percentage of the overall IIT budget. As a result, overhead costs can quickly inflate IIT spending and teams may cap overhead expenses at 25% of all direct and pass-through costs. Publicly-stated overhead spending caps protect the company's reputation and discourage investigators from submitting excessive IIT budgets.

"Investigator-Initiated Trial Management: Expedite Approval Timelines and Establish Compliant Funding Practices", available at http://www.cuttingedgeinfo.com/research/medical-affairs/investigator-initiated-trials/, provides benchmarks of IIT team budgets and case studies of itemized budgets for approved IITs by therapeutic area. The report also examines the structure of proposal evaluation committees and IIT submissions evaluation criteria and performance metrics. Highlights from the report include:

• Percentage of IIT budget dedicated at the beginning of the fiscal year
• Processes for receiving IIT submissions and investigator updates
• Timeline metrics for the number of days it takes teams to evaluate submissions and negotiate clinical trial agreements (CTAs)
• The number of IIT submissions that teams receive, evaluate and approve for 2013, 2014 and 2015

For more information about "Investigator-Initiated Trial Management: Expedite Approval Timelines and Establish Compliant Funding Practices" and IIT budgets, please visit http://www.cuttingedgeinfo.com/research/medical-affairs/investigator-initiated-trials/.

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