Study reveals potential opportunity for sponsors to reduce costs

Cutting Edge InformationJan 13 2010

A recent study by Cutting Edge Information focusing on compensation levels for clinical investigators reveals a potential opportunity for sponsors to reduce costs.

The report, "Managing Clinical Investigator Compensation," (http://www.cuttingedgeinfo.com/investigator-compensation/) shows that during Phase 3b development, surveyed companies budget an average of $32,513 for principal investigator compensation. Yet investigators receive an average of only $13,436 for running a Phase 3b study, 59% less than budgeted.

The significant differences between these amounts -- what's budgeted and what's received -- emphasize cost-saving opportunities for drug and device manufacturers. Benchmarks based on Cutting Edge Information's research validate the notion that sponsors have more negotiating room with CROs and other sites than they may have previously believed.

The biggest concern in investigator compensation, however, may be mounting public scrutiny. Drug companies are already facing a public relations scenario in which payments to physicians for promotional or educational activities have come under frequent fire.

Still, oversight may be inevitable, according to many industry stakeholders. In an environment of ever-tightening regulation and oversight, companies need to be proactive in employing processes seeking to protect them against future regulatory scrutiny. This situation presents companies with an entirely new set of challenges.

For example, relationships between investigators and companies can take many forms, including contact through investigator-initiated trials, CROs and academic institutions. Trying to address these nuances is a challenge. To protect themselves, companies are considering a fair-market value (FMV) approach to investigator compensation.

"Through our research, we found teams thinking of applying FMV protocol to the clinical side," said Jordan Stone, senior research analyst and lead author of the report. "Determining a market price for investigators based on a set of criteria both holds down costs and eliminates the risk of future investigation."

Cutting Edge Information's clinical development report, "Managing Clinical Investigator Compensation," takes an in-depth look at ways to improve the cost effectiveness of investigator compensation while ensuring compliance. The report is developed from surveys from over 50 companies across 13 different therapeutic areas. It includes compensation data collected from clinical investigators as well as pharmaceutical, biotechnology and medical device companies. A complimentary report brochure is available for download at http://www.cuttingedgeinfo.com/investigator-compensation/?download.