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Writer's pictureBurdock Group Consultants

Rx for Claim Substantiation (Part III) – Budgeting –

In Part I and II of this series on claim substantiation, we addressed the fact that a health claim has two essential components: a substance and a disease or health-related condition. The health claim can be made for a food, food ingredient or dietary supplement ingredient provided that the claim is substantiated by clinical data.

The previous two articles emphasized that the single most important component of the scientific evidence necessary for substantiation of a claim is the clinical data, the soundness of which is the product of careful planning. Following selection of the most sensible/practical effect to be studied that would substantiate the health claim, the cost of the clinical study represents the biggest concern for the sponsor. Clinical studies are expensive to run and are likely to become even more expensive if a well-detailed protocol and realistic budget are not meticulously planned at the outset.

Once the protocol is fully developed, several study sites (i.e., clinical research organizations (CROs)) should be approached for bids. Selection of a CRO to conduct your study is based, in addition to cost on the protocol’s difficulty, the number of subjects necessary to attain statistical significance, length of time for the study, the necessary tasks required and the skill level and number of personnel involved. It is important to realize that the proposed budget is only a suggested budget and the sponsor should be prepared for requests by the CRO for additional funding after the contract has been signed.

The budget development for a clinical trial has to address four cost aspects: (1) known, (2) hidden, (3) overhead and (4) miscellaneous.

Known Costs

Examples of known costs for a clinical trial include, but not limited to:

  1. Subject/patient costs that include screening, compensation (i.e., lost time from work), transportation and parking.

  1. Settings-related costs include that of an inpatient vs outpatient setting for the clinical trial and of a single vs multi-center run trial.

  1. Professional costs include review of the protocol by the principal investigator (PI), patient examination and medical history intake and evaluation, administration of treatment, review and interpretation of the diagnostic tests, possible use of the pharmacy and statistical analysis.

  1. Procedure-related costs include collecting specimens for analysis (i.e., blood, sputum, and urine), performing various diagnostic tests (i.e., electrocardiogram, and x-rays), analysis of laboratory samples (i.e., blood, urine, and stool), processing and/or shipping specimens for analysis.

  1. Material costs include blood collection tubes, syringes, gloves, sterilization equipment, biohazard equipment (i.e., special sharps containers, masks, and gowns), labels and possibly a special storage facility.

  1. Administrative costs include advertising for subject recruitment, preparation of patient charts, chart and notes dictation and typing, developing, printing and completion of case report forms (CRF), informed consent and adverse event forms, copy of medical records and special shipping (e.g., courier services to specialized laboratories), and data storage.

  1. Institutional Review Board (IRB) costs include, but are not limited to the initial review and approval of the protocol, review and approval of the informed consent and adverse event forms, assessment of the investigators’ qualifications, periodic updating on the clinical trial progression and additional reviews if changes in protocol occur.

Hidden Costs

Identifying hidden costs for the clinical trial is a more complex process and requires experience:

  1. Advertising & enrollment costs

  2. Slow enrollment occasionally seen if the exclusion criteria in the protocol are too stringent.

  3. Unexpected advertising costs & extended enrollment are seen if the initial enrollment did not produce the necessary number of subjects to be screened.

  4. Screening failures are subjects that passed the initial screening, but for one reason or another cannot be part of the study.

  1. Additional labs might be required during the trial if there is a change in protocol or, if there were unexpected mishaps (e.g., specimens from a certain blood drawing were lost in shipment).

  1. Frequent, updating, conference calls and/or meetings requested by the sponsor.

  1. Frequent and lengthy sponsor visits.

  1. Personnel turnover at the study site might require replacement and additional training.

  2. Protocol amendments necessitate additional time on the part of the PI for development and the IRB for review and approval, likely causing unexpected delays in running the clinical trial.

  1. Adverse events can occur during the clinical trial. In these situations, the sponsor is expected to cover all the costs for hospitalization and/or medications required to improve the condition of the subject, as medical insurance will not cover for such events.

Overhead Costs

The overhead costs encompass all the administrative charges for that particular study site and include office space, furniture, special medical and laboratory equipment, computers, electric and telephone, various licenses, insurance, legal fees (consent forms), compliance and accreditation certificates (e.g., OSHA[1] and CLIA[2]), and personnel training. Overhead costs vary from site-to-site and may represent anywhere from 20 to 40 percent of the study budget.

Miscellaneous/Unanticipated Costs

These costs might include travel expenses, additional statistical analysis, or special presentations requested by the sponsor.

Conclusion

Experience in budget development can avoid pit falls that might lead to cost increases. The budgetary experience is intertwined with the clinical expertise applied to the meticulous up-front planning process and development of a clinically feasible study protocol. However, while cost containment is considered essential in today’s economy, it should never compromise the quality of the clinical study affecting the overall outcome.

[1] OSHA – Occupation Safety and Health Administration

[2] CLIA – Clinical Laboratory Improvement Amendments

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