Explore the ramifications of inflation and higher staff attrition on the clinical research industry based on IQVIA's recent whitepaper, 'The Impact Of High Inflation And The Great Resignation On Clinical Site Budgeting.'
Sharon Gordon, former Director of Cost Benchmarking and Site Contracts, Trial Design & Site Engagement, and Morgan King, Manager of Data Analytics and Services at IQVIA Technologies share findings on escalating site costs over the past three years, as well as IQVIA's data collection process and evolving benchmarking strategies. Tune in to hear how sites and sponsors can work together to navigate fair market value negotiations amidst rising costs.
Explore the ramifications of inflation and higher staff attrition on the clinical research industry based on IQVIA's recent whitepaper, 'The Impact Of High Inflation And The Great Resignation On Clinical Site Budgeting.'
Sharon Gordon, former Director of Cost Benchmarking and Site Contracts, Trial Design & Site Engagement, and Morgan King, Manager of Data Analytics and Services at IQVIA Technologies share findings on escalating site costs over the past three years, as well as IQVIA's data collection process and evolving benchmarking strategies. Tune in to hear how sites and sponsors can work together to navigate fair market value negotiations amidst rising costs.
Welcome and thank you for joining the Society for Clinical Research Sites for SCRS Talks. I'm Jimmy Bechtel, the Vice President of Site Engagement with the Society. SCRS Talks allows our partners and those that we work closely with to take a few minutes to address issues of industry concern, share exciting achievements, and learn more about our community. Today we have Sharon Gordon, the Director of In cost benchmarking and site contracts, trial design and site engagement with IQ via technologies and Morgan King, the senior manager in data analytics and services with IQ via technologies here to share with us some insights into a recently released white paper that IQ via published titled the. impact of high inflation and the great resignation on clinical site budgeting. Sharon and Morgan, it's great to have both of you here. We'd love to first start out with learning a little more about each of you. So Sharon, if you wouldn't mind starting us off
Sharon Gordon:sure. We'll do. And thanks, Jimmy. Thanks for having us with you. As you mentioned, I have been living and breathing site budget and contracts for 24 years now. I myself have negotiated for dozens of sponsors with hundreds of sites. Today I'm overseeing a team that develops and negotiates site budget and contracts in what we call an FSP model, a functional service provider model. So where sponsors are outsourcing different services in an a la carte form. Fashion. I'm also involved in the cost benchmarking aspect, which involves the grant plan product, which we'll hear be hearing more from Morgan about Morgan.
Anthony Morgan:Sure thing. Thanks again for having us. So, yep, I am the. Senior manager for data analytics team, and I've been with the group since 2017. I am kind of the data nerd of our group. I'll say me and my teammates we also live and breathe just data in general, from statistics to analytics. We oversee the management of the database. We ensure accuracy and data integrity. So those are our two chief and most important things that the data comes in and it's accurate. And then most of our days is tinkering. We're asking questions. It's basically like being an investigator. Like a private eye on our side. And so what we do, our goal is to provide analytics and glean all sorts of insights for both the internal and external teams so that we can hopefully get to a place of better decision analytics for both the sites and the sponsors.
Jimmy Bechtel:Wonderful. Thank you both. Really exciting to have this conversation with you around the concept of inflation and skyrocketing costs. We've seen this affect the entire pharmaceutical industry over the last couple of years, and I know your recently released white paper addresses and shares data on this topic specifically. So maybe you can start us off on around what IQVIA has seen in regards to site costs over the past three years and some of the trends and maybe speaking specifically to the results of your analysis that might have been particularly surprising in this space.
Anthony Morgan:Yeah, absolutely. So I'll just kick us off. So in general, to no one's surprise, we've definitely seen that the cost have increased from a pre to a post pandemic market. The trends that we definitely noticed when we had our webinar in November of last year have absolutely continued as we expected. We saw that everything specifically from personnel time to you know, once again, we say we're not necessarily surprised because when you ever you have inflation of any sort and global inflation, like we had which was the highest in the last 2 years, specifically when we think about the United States, but even globally it will affect, the amount of money that people are putting out to just live their lives. So it does make sense that we did see personnel time increase because, of course, people will more than likely ask for higher salaries. And it also makes sense that, you know. It's going to cost more to keep the lights on because all of that trickles down. So when we see higher overheads, we see higher site cost all of that data that we were able to extract, we, we saw the trend that exactly speaks to that. We expected that very quickly through time, we were going to see that people were going to just ask for more money specifically for those two things. Now, what I also wanted to call out was that. These costs that we were talking about, right? That happened on the line item. You'll hear me use that term kind of interchangeably, like procedural costs or line items. Basically, the line items that go into a clinical trial, they will affect the cost per patient amount. So the amount that's paid per patient or even the cost per visit. So once again, it does trickle down when you are paying a little bit more for. Each of those line items and the same quantity or the same quantities being used, you're going to see that what could be a large change on a procedural level may not always translate to a higher CPV or CPP as we refer to it as our acronyms cost per patient. But sometimes it does, and it really does depend on how you're negotiating and what line items you're using, how much of them that you're using. So once again, to no one's surprise the pre to post pandemic market, we've seen an increase
Jimmy Bechtel:thanks, Morgan. I think those are some really important insights and some some valuable data. Like you said, to no surprise. I think there's some some valuable takeaways from that around the increase in cost. And I know we'll talk a little bit about what might. The backbone be around those increasing costs, but we know that sponsors need reliable data to negotiate those fair market value budgets and then get to that CPP as you had mentioned at that cost per patient. So, what and how does IQ via collect this data and how do they determine those benchmarks or how has that maybe benchmarking process changed a little bit as a result of some of the data that you've been able to collect?
Anthony Morgan:Yeah, absolutely. Just one more thing I wanted to add to the last question before we move on to is that also from what we've seen of these increases where we have, we have higher personnel times and invoicables, particularly we've noticed that the costs have gone up to around 50 percent and this is pretty much globally. Sometimes it's a little lower, but for the most part, what we've seen is. That there's around 50 percent doesn't mean that you should always add 50 percent onto your cost per patient or even your line items. But that is something that we've noticed. Another thing I just wanted to call before we move on to is that the way that our data works that we'll get into in just a few moments is that sometimes when we're receiving higher cost new costs that are coming in fresh costs are coming. We usually restrict everything to about 2 years. We don't always see that with something like the 50th percentile, also called the median. That that is always going to change. Sometimes we will see that when we are seeing higher costs come in, they will live around the 75th or the 90th percentiles before it actually kind of trickles back down. Some of that old data is graduating out and some of that new data is coming in. So. Now I will jump into how we how we do what we do. So for the most part,, it's a pretty straightforward process. We do receive these negotiated budgets from the clients. And then we enter them into our database. We have a database entry, our data entry team that enters everything in for us. There is a rigorous Both data verification and data validation process. So we're double checking the data that we're entering in, making sure that it makes sense. We do have teams that we utilize, like our coding specialists that look at some of the things that don't really necessarily might not make sense to us. So we say, should that have been the code that they used? Or should they have used something else? Or maybe we do have to reach back out to the client and just double check How they might have performed their trial just to make sure that everything makes sense to what we've seen in the past. Once that is completed the data is aggregated and we review it across multiple conditions that includes the TA, that includes the specific country that also includes the specific phase. we look at and aggregate across all of these different lines to see if We're seeing kind of the same thing across everything. And then we might need to just call out that there isn't too much of a variance, or sometimes we do. A lot of clinical trials are performed in the therapeutic area oncology. So it tends to dominate when, whenever we look at the cost. So we do want to make sure that we break out so that clients that are performing different types of trials also, you know, aren't being flooded with oncology. So that everything's a little bit more equalized. Typically in our tool, we'll aggregate on, The 25th, 50th, 75th, 90th and 100th percentiles but we can do some of the in between percentiles as well and we do incorporate a myriad of global and formalized publicly available price lists as well. So we use the NIHR from the United Kingdom or the Ministry of Health just to name a few we also integrate and we've been doing a much larger and more expansive job of this quite recently. And we integrate global economic indicators to better make comparisons between countries and what we expect using, you know, gross domestic product, population, total healthcare expenditure, power purchase parity and We always, always, always focus and request from our clients to get the best data available, which is usually on the most granular level. So this is when we receive the line items and the scheduling visits and the allocations. Because when we have that type of data, when we have that level of data, which I like to refer to as a great data, we can literally glean the most impactful insights for the clients.
Sharon Gordon:I can just add there so, you know, when we're talking about aggregating that data and and slicing it by percentile. So, just keeping in mind that that 50th percentile means that 50 percent of the budgets were higher. 50 percent were lower. It's not an absolute dollar amount, so that median can shift based on what's being negotiated, so that can, from an absolute cost, can shift higher as costs are going up and then would likewise shift lower as costs may be decreasing.
Jimmy Bechtel:Thanks for that clarification. In addition, they're sharing and Morgan really insightful. I think it's important for us, especially at the site level to dispel maybe some myths or and give insight into how that's done at the sponsor and CRO level, because oftentimes we don't and what you don't understand sometimes is a challenge to make sense of. So understanding where that's coming from and how you approach that I think is valuable for for our listeners there. So. Are CROs also then negotiating their contracts with sponsors for these increases and maybe shed some light onto what that acceptance has looked like as, as we're negotiating as you all rather are negotiating those, those agreements and those contracts.
Sharon Gordon:I'll take that one. Thanks. Yeah, it's, it's not so much that CROs need to renegotiate their contracts. There's very few contracts between CROs and, and And sponsors that that are risk based where a sponsor might say, you know, here's a million dollars. If you come in under budget, you keep that. If you're over budget, you absorb that. Almost always the sponsor owns that grant spend. So, you know, the way that we try to, and advising clients. If we see they're coming in with a really low budget, we can share with them to say, this is a really low budget. You're going to really gum up the works and and you're not going to be properly compensating sites. So we'll try to, you know, quote unquote, negotiate it from that perspective in in advising them.
Jimmy Bechtel:Thanks, Sharon. That's an interesting perspective. And again, I'll go to the same point there. One that I don't think a lot of the sites might understand. So I think it's important then kind of a takeaway for our conversation here that our sites, when they're in the dynamic of working with the CRO, that they're advocating for themselves with you in partnership with you to let you know, so that when you are all having those conversations, as you had mentioned with this, with the sponsors, then you can approach them with the reasonable expectations based on the site information. So thank you for sharing that. I think that's a valuable insight. As sites continue to take on more technology and vendors and their trials, how can sponsors and CROs help support site with the vendor issues? And Maybe bringing it back to our topic at hand here. Also, how do we accurately and appropriately account for that in the budgets that we're negotiating?
Sharon Gordon:Yeah. And I, and I think that's, what we would be speaking about more is if you do have issues with your vendors, and even not necessarily issues, but how do you make sure that you're being compensated for the training. My recommendation is just, making sure, you know what your costs are and that you do account for those different items that if you are neat for a given trial, you've got 3 different platforms. You have 3 different trainings that, you know, who needs to attend those trainings, probably you'll have a blended rate for any given role and know what that cost is and know what that time commitment is. And there are going to be unknowns as well. You may have an instance where, you know, the platform is not working and you're sitting with a help desk and you're also as a site, you have certain time requirements that you're being held to. And if you're sitting on a call with a help desk, trying to resolve something. Those times are slipping and then you may incur even greater costs if you need to go to overtime or so forth, things like that. So, make sure that that you are accounting for those things that can happen for. Most sponsors aren't going to want to provide a blank check and just allow you to invoice for anything that comes up. But. Having those conversations on these are costs that that are very real to me and and you're able to quantify those and justify those, you know, as we were saying on that prior question, that it really is a partnership. And if we can help you get to, yes, we can do that more easily with that quantification and that justification.
Anthony Morgan:Yeah, 100%. I'm going to piggyback off sharing here. I definitely believe that the key here is always good communication. And I say that and I'll give an example in a moment, but, you know, I'm going to channel Jen Hill, who was our co presenter from the webinar. And she said, clear is kind. Right? And she was referencing the negotiation with sites. And it was really interesting when we were speaking to her because When we were asking questions like what's the best way and we are always getting these questions, right? What's the best way to negotiate with sites? What is the best way? She had such a much more empathetic and kind of human approach. She's like, I just get on the phone with them, you know from my side of things from the data when I'm collecting the data and we're reviewing the data and seeing what were the line items use what the procedural descriptions. I do ask myself sometimes because you can tell that there are. Clearly times where it's very, very spelled out that maybe the site must have asked 1000 questions regarding like what was expected. What was here? And then sometimes it is a little bit more general, and it's a little bit more vague. And we will reach out to the sponsors then and kind of get that clarity. But ultimately, it seems like everyone from Any side of the field that they're standing on needs to get that clarity needs to understand what exactly is happening here. So when we ask the question once again, you know, how can we support the sites? I think from the sponsors perspective, it's just to be as clear as possible to be as transparent and as open as possible. And for the sites to feel that they have the foundation to ask as many questions as possible, because at the end of the day, you know, everyone is trying to ensure that we're getting these trials done on time, efficiently, and everyone's being fairly compensated for their work.
Jimmy Bechtel:It's a great sentiment, Morgan, and thank you for your insights as well, Sharon. I think that Approaching these conversations and the negotiations and the process around executing this clinical trials with the mentality of partnership that we're in this together, and that we are all simply trying to, like you said, Morgan, get to a place where everyone is appropriately compensated for the work and the time that they're putting in is a great place from a cultural standpoint to approach those conversations and really the entire enterprise of budget and contract negotiation. So again, thank you for that. For that perspective, you both talked a little bit about this concept of percentile. So maybe shed some light, pull the curtain back, I guess, on that concept of the percentiles and what's initially generally offered in that initial budget and maybe what a good site might be able to do And how they effectively get to that point where they're in that 90th percentile.
Anthony Morgan:Sure thing. I will jump right on in here. So most often than not from my experience, from what I see both in the negotiation and the forecast side is that a lot of sponsors are beginning their forecasts at the 50th percentile. Also referred to as the median. Now, from my experience this is an industry standard within clinical trials, but it's Also, pretty much a business standard for any sort of fair market value assessments across multiple industries. The example I always usually refer to is either Zillow or PayScale. For those of you who might be a little bit more familiar with PayScale, for example, you can go in as an employer or an employee and you Put in all of your information. Very similar to grant plan. I've worked this long. This is the job. This is where I'm working and it spits you out based off of what you're being paid with a visualization. If you are or not in fair market value. So when we're thinking about the median, it's important to remember that it's one also not an average. One of the things that I'm usually clarifying with clients most often is that the median is not the average. The median is the middle position of a list of costs. So statistically speaking, usually 9 times out of 10 right? Because it is an absolute middle point of all the costs we've seen. If you were to go out and budget with that, you should expect Back to that, half of your sites will probably reject it. So, you know, the example being 10 sites, five of them rejected, and that's still a good median. That's what we would call a good median. But we currently don't have an industry tool that looks at things like site performance. That is something I've talked about with the internal team a few times. It's something that. I don't necessarily think that there is a clear cut answer for because when a site is asking themselves, for example, and this is me working within the hypothetical, if I were a site, and I did not feel that the 50th was a good compensation that, you know, we'd want a little bit more I would probably lean into basically the breadth of my work. I would say, you know, I've always started trials on time. I've always ended them on time. I've always done things like had good data quality and recruitment. So once again, because there isn't any sort of like site Yelp at this time, you know, patent pending it's really hard to kind of command that. So basically sites will want to all, as you said earlier, they'll want to stick up for themselves. And if they don't feel like they're being compensated fairly, I do think that they can say, you know, we, we would like a little bit more and maybe here are the reasons why. But I'm always more dedicated to any sort of system that helps maintain fairness and equity. So I would be a fan of such a tool a site Yelp if you will. But that is my mind at this point, looking towards the future, the best way for both parties to kind of justify who's getting paid and how much I do believe in meritocracy. So if you're a site and you are the best in class, you're the the best in your game. You've been doing these types of trials, and you've been knocking out of the park for years. It does make sense that you would want to command a higher percentile. I can see the 50th being used for working with the site for the first time, but until we have something that's a little bit more standardized as far as performance analytics of sites are concerned, particularly when it comes to clinical trials, I think it will always be a little hard because then when you have situations where it's a sponsor working with a site. That it's a site that never worked before, you know, just like any of us in the year of 2023. If we're going to a new restaurant, if we're going anywhere, we usually look at reviews. So the best way for once again, sites if they feel that they want to command more than the 50th percentile, I say, once again, clear, honest communication is key here. You know, speak and have the conversation with the sponsor about why. But at the end of the day,, I would say the best solution for the future would be something that's more aligned with like site performance analytics.
Sharon Gordon:And then if I can just springboard from that just quickly you know, keep in mind that a sponsor also has a compliance construct and policy. So, you know, they can't just automatically offer or pay whatever they want. So. When you're putting your strategy together, try to put something together that that helps them pass this from a compliance test. And know your cost, if your costs are covered, maybe you don't need to be paid at the 90th. If it meets your needs, it meets your needs, but if it doesn't know why communicate that, and that helps the sponsor, then sometimes they're going to a compliance group and they have to, They have to justify and they have to document why they are you know, potentially exceeding a certain cost.
Jimmy Bechtel:That's great and valuable, again, valuable insights for those that are listening here and what they can do to try to. Position themselves as best as possible. I would agree that quality pay for quality work is really what it boils down to for the research sites. And if you're doing a good job, and they're consistently enrolling and doing what you can, you're open, you're communicative, you're reasonable, then that would make sense that those are the sites that you're. Potentially a little bit more apt to opening up broader negotiations and getting them into that higher percentile to continue that, that concept there. We're nearing the end of our time here. So I did want to leave us with one final question which I think is a very important one. And that's really what advice you have for sites and maybe other industry partners to better navigate the complicated landscape of the challenges we're seeing with inflation and the pressures as well as, Staff attrition and how that ultimately affects our budgets and contracts and maybe tie that with how the industry can adapt to some of what we're doing.
Sharon Gordon:So I'll start with that. Morgan, I'm sure you'll have some things to add, but I mean, we we've already been talking about communication and that's very important. And then. That quantifying making sure you've got the numbers to back up what you need. Numbers speak very loudly. So know what your cost space is and have that documentation ready. If you work with a given client, a lot of times, maybe they're open to rate cards and once you get that rate card communication going, if there are some of those fees that can be really difficult to get approved because they've not been approved before, you know, kind of allows you to blaze that trail and get some of those things in place. So that can be a helpful tool as well. Morgan, anything to add to that?
Anthony Morgan:Yeah, absolutely. So I love this question because I'm a bit of a futurist and I'm always looking for a technological solution for anything. So one of the things I wanted to call out is As far as the industry is concerned and how we can help the industry to adapt, I definitely think the solve here is going to always be a technological one. And as you know, we're in the perfect place, right? We offer this technological solution. So some of the things that my team is working on from the comments and concerns even before we had the webinar is how we can integrate and look at things differently. And Like I said, clean more insights off of the data that we do have in house. So, for example, one of the big enhancements that we made even after the webinar is that we have a new method for how we're incorporating global inflation so that it better reflects and even more quickly reflects when inflation is becoming a little bit more volatile so that we can show that the data is showing like changing and transforming a little bit faster. We also started to look into the treasure trove of forecasted data that we have in house and we're asking more questions so that when we see things that are kind of incongruent between what's being negotiated and what's being forecasted, we can start digging a little bit deeper in the data and say, okay, well, we're seeing that, yes, this might've been the negotiated trend, but why is this the forecasted trend and how can we maybe start to get into a place of possibly predictive analytics which we know. Some of our clients might be interested in the idea here. Once again, being that the. The communication is key that we want to communicate to not just the sponsors that, you know, we're working for, but the industry as a whole, that at the end of the day, we see that there's a lot of questions that we do see that there's a couple of issues and our team is working to actively try to solve as many problems as possible, as well as trying to solve some of them before they even are problems. I am a big fan of being more so proactive than reactive, so we're always trying to. Keep our finger on the temperature of what's happening in an industry so that we can say this is coming down the pipeline. People are probably going to have some questions. Let's be prepared with an answer. So that's how we're trying to help from our side on the data side with helping the industry to adapt. Because if we can kind of have not just good tools but good insights, we think it will definitely quell some anxieties when things are a little turbulent.
Jimmy Bechtel:Thank you, Sharon. Thank you, Morgan. I think those are tremendously valuable insights. I appreciate you being transparent with the process around what we're doing here and give a little bit of insight to our primarily site listeners here on what this looks like and how we address some of the challenges with with inflation and staffing challenges and those increased pressures from a budgetary standpoint. So again, thank you both for being here and sharing those insights with us. It was great to have you and great to talk with you today.
Anthony Morgan:Thank you so much for having us.
Sharon Gordon:Thanks, Jimmy.
Jimmy Bechtel:For all the listeners, make sure that you register for upcoming summits being held throughout the year by visiting the summit page on our website, myscrs. org. While you're on our website, be sure to also check out other publications and resources built for the community in the publications section. We appreciate your participation in listening to today's program and look forward to having you join us for more great content coming out very soon. Thanks again for listening.