Historic Investigator Payments Help Pharma Companies Justify Clinical Trial Costs

RESEARCH TRIANGLE PARK, NC--(Marketwired - December 18, 2015) - An important component to the fair market value (FMV) calculation for pass-through costs is previous payments made to clinical study sites, according to a recent study on clinical investigator payment benchmarks by primary intelligence provider Cutting Edge Information. Previous payments include a company's own detailed documentation of payment data, publicly available reimbursement rates from government insurers such as Medicare and staff experience with clinical trial budgeting. Historic payments do not constitute FMV for clinical trial pass-through costs in isolation but instead add to the case established by current industry benchmarks.

Companies of all sizes benefit from documenting clinical expenditures. Larger pharmaceutical companies often have clinical databases containing payment information stretching decades. These extensive databases prove invaluable come budget time -- offering historic payments across multiple countries, sites and individual investigators. But even small companies can benefit from a clinical costs database. One small biotech firm started recording clinical payment data five years ago and has already documented physician payments in 26 different countries.

U.S. trial managers should also reference Medicare reimbursement rates to inform budgeting at the procedural level. These historic payments are free to access and represent what the U.S. government is willing to pay for an exhaustive list of medical procedures.

"Most interviewed executives agree that Medicare rates should be inflated to meet the fair market value of private physician practices," said Natalie DeMasi, senior analyst at Cutting Edge Information. "The reimbursement groups we studied found that a 30- to 40 percent mark-up on Medicare rates generally constituted FMV for private investigator sites."

Clinical Investigator FMV and Compensation Benchmarks Structuring Contracts and Planning Investigator Meetings, available at http://www.cuttingedgeinfo.com/research/clinical-development/investigator-compensation/, examines payment structures and processes surrounding clinical investigator compensation. It explores popular strategies and tactics used to pay investigators, as well as the different ways that companies contract with investigators. The report also examines common milestone payments, the number of payments made to clinical investigators and the ranges and averages of direct costs that investigators often pass through to sponsors.

The study provides a valuable resource for clinical development managers, directors and vice presidents to stay informed on the latest trends around determining clinical investigator FMV. This report will also help executives:

• Build comprehensive clinical trial budgets
• Determine FMV calculation processes to develop defensible compensation rates
• Structure investigator contracts
• Plan for likely pass-through/direct costs from clinical trial sites
• Plan and prepare for upcoming investigator meetings

For more information on Cutting Edge Information's pharmaceutical clinical investigator research and FMV services, please visit www.cuttingedgeinfo.com.