Clinical Trial (Industry-Sponsored) Research Agreements and Payments

Introduction

The University handles industry-sponsored clinical trials differently from other types of sponsored projects for several reasons. The sponsor negotiates the rate they will reimburse the researcher for each patient in the study. This rate is often governed by industry norms rather than actual costs of doing the research. In addition, the actual number of dollars received from the sponsor may vary greatly from the proposed amount because the number of participants recruited for the study could vary from the estimated number. Therefore, the University handles these types of sponsored projects as follows.

Submitting the Proposed Agreement to Sponsored Projects Administration (SPA)

All proposed industry-sponsored clinical trial agreements must be processed through established procedures, regardless of any tentative understanding between the principal investigator (PI) and the sponsor. These procedures include fulfilling all compliance requirements, completing a Proposal Routing Form (PRF), and obtaining department head, dean, and administrative/compliance approvals. Review by the department head, dean, and administrative personnel is essential to ensuring that the University can provide the space and resources needed to conduct the project. The PI may not enroll patients until the contract is executed and Institutional Review Board (IRB) approval has been obtained.

SPA recognizes that these types of agreements may need to be approved quickly so the PI may use the following expedited procedures.

1. Department submits the preliminary documents to SPA.

   The PRF is prepared and must only be signed by the PI.

   If obtaining an ink signature: Click on "do not route electronically," click the "submit" button (beneath the Comment box), print a PDF copy, and have the PI sign the Approvals and Certifications section.

   If obtaining electronic signatures: In the "approval chain" section, enter the PI's Internet ID and your dept administrator if appropriate then click "submit." Then send a copy of the PRF , the draft contract and protocol, and a draft budget to [email protected].

   Note: If work needs to begin and expenses (not related to patient enrollment) must be incurred before the contract is fully negotiated and signed, the PI must complete a Preaward/Advance Account Request Form, have it signed, and send it to SPA for account setup.

2. SPA reviews the contract and will work with the sponsor to finalize acceptable language.

   The grant administrator will take special care to ensure adequacy of payment terms for the work to be done and in defining the schedule and acceptance for deliverables.

3. Department completes protocol and budgetary negotiations and submits documents to SPA.

   Once the PI completes negotiation on the protocol, finalizes budgets, etc., route a final updated PRF). Add a comment in the mailing instructions section indicating that this contract was already submitted to SPA for pre-review.

   Then submit it to the department and college for review and approval, and send the contract, finalized budget, and protocol for final processing to SPA.

4. SPA completes final review and processes contract.

   Note: SPA will not approve the contract until it receives the fully signed PRF, finalized budgets, protocol, and if relevant, updated contract.

Charging Start-Up Costs

In these types of projects, a substantial amount of work is put into planning the project and developing the protocol that is used in the proposal. When the contract is negotiated, the University asks for start-up costs so that the sponsor agrees to pay these expenses before any case report forms or invoices are submitted. These start-up costs include work on meeting regulatory requirements and attending investigator's meetings. They can be charged to the project when the PI establishes a preaward account to charge the start-up costs.

If the project accountant or research coordinator is unable to process project expenses because the project start date does not include the date of service for the expense, that person should follow the most appropriate path:

• If start-up costs are included in the approved budget: If the sponsor-approved final budget reflects planned start-up costs that will be incurred prior to the effective date of the agreement, SPA will generate a revised Notice of Grant Award (NOGA). The NOGA will retain the project start and end dates as detailed in the agreement, but SPA will add a clarification comment to the NOGA (e.g., "This revised NOGA recognizes allowable budgeted start-up costs incurred between ______ [date of first pre-award expense] and the Effective Date of the clinical trial agreement."). SPA will then change the program dates to reflect the date of first pre-award expense, and a note of "start-up date" will be added to the program comments field.
• If start-up costs are not included in the approved budget: If start-up expenses are incurred but were not included in the sponsor-approved final budget, the PI will be required to send a letter or e-mail to SPA to certify that the costs were reasonable, allocable, and directly related to start-up activities for the clinical trial. The PI is then required to get the approval of their department head, or their dean if the PI is the department head. A revised NOGA will then be generated by SPA. The NOGA will have the project start and end dates as detailed in the agreement, but SPA will add a clarification comment to the NOGA (e.g., "This revised NOGA recognizes allowable but non-budgeted start-up costs incurred between ______ [date of first pre-award expense] and the Effective Date of the clinical trial agreement. The PI has certified these costs as reasonable, allocable, and directly related to start-up activities for the project."). SPA will then change the program dates to reflect the date of first pre-award expense.

Allocating Costs

PIs must charge costs appropriately. Researchers who receive funding from multiple sources need to be aware of the additional risks this situation presents to the institution. To ensure that costs are properly allocated, when a new project starts using shared resources, the PI should meet with the appropriate department personnel to determine how supplies, personnel, and other costs will be allocated or re-allocated to each project. They must document what resources are shared and how allocations changed. For example, if a piece of equipment was shared by two projects and now will be used by three projects, the document must show that allocations changed from 50% to 33% for each project. This documentation can be in the form of a note and must be in all three project files for audit purposes.

Invoicing and Receiving Sponsor Payments

Payment benchmarks for clinical trial studies vary greatly. PIs and/or study coordinators should meet with the unit administrator or accountant at the beginning of the project to review the specific payment benchmarks for their individual study. Sponsored Financial Reporting (SFR) will automatically invoice for any non-refundable start-up payment due upon contract execution. In addition, whenever a benchmark has been met, the unit administrator or accountant must send a message to [email protected] in SFR. SFR will book a receivable and send out an invoice for payment. The message must contain the following information:

• EFS (Enterprise Financial System) contract number
• Sponsor
• Sponsor account number
• Principal investigator
• What benchmarks have been met (e.g., number of patients who had case report forms submitted)
• Anticipated payment

Oversight

As with any sponsored project, the PI is responsible for reviewing the sponsored project account on a monthly basis to ensure that expenses are being charged correctly and the project is progressing at an expected pace.

On a regular basis, SFR will monitor invoice activity. If the sponsored project has had no invoices or payments during the past quarter, SFR will follow up with the PI and unit administrator.