Budgeting and Contracting Best Practices for Research Sites

It’s a no-brainer: To grow your business, you need to negotiate and collect the funds you deserve for work performed. Part of the process is understanding the true costs of your work prior to budget negotiation. This includes all direct and indirect costs, and typically includes:

• Personnel costs: salaries, overtime, training, and additional staffing if needed.
• Facility costs: not only facility space, maintenance, utilities and equipment, but also any additional space or modifications needed for the study.
• Procedure costs: electrocardiograms (ECGs), blood draws, IV infusions, radiology, ophthalmology, and other specialized assessments.
• Supplies and materials: study-specific items like lab kits, diagnostic tools, medication storage, dry ice, and office supplies.
• Participant costs: in-person recruitment practices, advertising, screening, travel reimbursements, stipends, and engagement.
• Technology costs: fees for site-owned platforms such as a clinical trial management system (CTMS), eRegulatory management system, eSource platform, or any other specialized digital solution used during the trial.
• Regulatory costs: fees for institutional review board (IRB) approvals, data privacy compliance, and audits.
• Contingency costs: unexpected expenses such as protocol amendments, additional patient recruitment efforts, or other unanticipated expenses and delays.

In addition to covering your costs, here are several strategies to ensure you’re prepared for negotiation:

• Ensure you fully understand the protocol, including all visits, procedures, tests, and specialized staff or equipment needed. Carefully outline the time and resources needed for each step. It is often helpful to bring in any staff with specialized skills during this step to make sure nothing is overlooked.
• Leverage historical data and benchmarks to identify past challenges related to recruitment, timelines, and resources. The more you can learn from previous trials, the more confidently you can negotiate your next one.
• Plan for the future by ensuring you are taking the overall study timeline into consideration. Longer trials typically incur higher costs due to increased staffing needs, extended participant engagement, ongoing data management, and sustained regulatory compliance efforts. In addition, make sure to account for inflation for salaries, procedure costs, and other material resources you need to conduct the trial.
• Prepare a detailed justification for each cost in the budget. Be ready to explain why each cost is necessary and how it contributes to a successfully executed study. Sponsors are more likely to agree to a budget when they understand the rationale behind each expense.
• Ensure the company is the signer, not the investigator. While a principal investigator (PI) as signer can work for a single site, as that site grows and potentially expands to include new sites, this can result in issues. Employing the company as the signer can improve timelines and establishes the company as the owner of the financial and ongoing business development relationship with the sponsor.

In addition to following the guidance above, you should be flexible in your negotiation. Find areas where you may be able to adjust, such as reducing or reallocating specific administrative costs. Understanding your bottom line and your ability to make concessions will help you negotiate a budget designed to cover your costs without compromising quality.

When negotiating terms, you should request 0% withholding or holdback to make sure you are quickly getting paid for your work. Especially in cases where a portion of the funds are dependent on closeout visits, holdbacks can result in waiting years to be reimbursed. In addition, you should request Net 30 payment terms. You are paying your team and incurring expenses for materials to conduct your research throughout the trial, and so you should be collecting funds from the sponsor as quickly as possible for the work you have performed.

Lastly, payment should be made upon “work complete” (e.g., visit data is entered into an electronic data capture [EDC] system, not reliant on a monitor review) to make sure you are in control of payment timelines, without the need to wait for action from the sponsor.

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