The Movement Towards Holistic Solutions: Clinical Trials
Clinical trials, also commonly known as research studies, are an integral part of the medical research process, aimed at evaluating potential medical, surgical or behavioral therapies. These trials play an important role in advancing science and developing new treatments for various conditions all over the world.
Despite how far clinical trials have come, they remain extremely complicated to organize and facilitate, and involve many stakeholders – often located across multiple countries.
Due to this, the management of payments throughout clinical trials can be equally complex. Whether sponsor organizations manage the payments process internally, using a payments provider, or rely on a Clinical Research Organization (CRO), they often underestimate the costs of paying all stakeholders and the logistical challenges of ensuring all participants are paid in a timely and organized manner.
Trial Participants and Payments
Payments required for clinical trials can be broken down into three categories:
Investigator compensation, which involves paying the doctor or other party overseeing the trial, typically comprises about half of the per trial cost. This includes payment for the principal investigator(s), site location(s) and other related costs.
Overhead costs, which include payments for CT scans or other medical procedures, transport of investigational drugs, payments to study participants, lab fees and procedure costs.
Administrative costs, which include site payments, expenses related to protocol feasibility or patients and investigator meetings, and/or office supplies.
Accounting for all of these payment possibilities usually requires a mix of a direct payment channel and an indirect payment channel, depending on the study and how sponsors choose to compensate the participants. Participant payments are still often distributed by cash or cheque, which can present a host of problems for the trial sponsor or CRO.
Challenges Impacting Clinical Trial Payments
The most common challenges can include any one of four issues, or more often, a combination of these issues.
While clinical trial payments processes have come a long way, and many sponsors or CROs now disseminate payments electronically, there are still instances where payments are made by mailing a paper cheque. In such instances, clinical investigators and even study participants may be stuck waiting for these payments due to international mails and varying banking requirements for the negotiation of foreign-originated cheques.
Further, some payments are subject to holdbacks and are distributed only when certain milestones are reached (such as site invitation, investigator training, and first patient visits). Thus payout cycles can last several months, potentially leaving trial sites at a financial deficit. Waiting for paper cheques can exacerbate these delays.
2. Lack of collaboration
Sites send invoices to sponsors or CROs for the services they render, but communications and payments are rarely handled directly. Payments go through several layers of email communication between sites and sponsors or CROs in reconciling discrepancies. This not only adds to further delays in payments, but also to overhead costs in terms of the manual effort being expended.
3. Disconnected systems & manual data capture
In addition to the lack of collaboration noted above, a lot of the data around payments is received and reconciled manually from various systems at sites, sponsors or CROs – which are seldom connected or interfaced. This process is even more complicated by the fact that many sites use their own software for recording patient visits, procedures and costs. They then transfer all of the data they record into the sponsor’s or CRO’s software, leading to potential errors in the process.
Additionally, there is often no way to track payment status, due to multiple systems being involved. This leads to miscommunication, which negatively impacts the relationship between sites and sponsors.
4. FX volatility and risk management
In the case of international trials, the sponsors and the various clinical sites might be functioning from different regions or countries, leading to the use of multiple currencies and thus variable exchange rates. Because of this, many sponsors choose to pay all invoices and/or participants in a single currency – which may be foreign to many of the sites. This means that each site is required to calculate exchange rates, imposing an additional burden on the recipients in the payments process.
Additionally, payments in a non-local currency may take longer to disseminate once they reach their destination. Variations in exchange rates and local transaction fees can lead to inaccurate site payments.
The most efficient way for many payers to navigate both these issues is to offer local currency pay-outs for each site. The payer thus has greater control and visibility into costs, and the local sites have a lower risk of receiving an inaccurate payment due to currency conversion and unexpected administrative fees.
A movement towards streamlined processes
Clinical trials play an important role in continuing to advance science and developing important treatments. However, the process for paying key stakeholders, from investigators to participants, remains unnecessarily complicated and burdensome for many trials.
A holistic payments solution can provide greater transparency by offering visibility into all stakeholder payments, allowing the sponsor and all other parties a more complete and accurate view of both the trial costs and the various payments needed. This can streamline the payment process for the trial itself, and also allow for more efficient budgeting for future trials.
Partnering with a cross border payments provider, such as Corpay, can help a clinical trial achieve a holistic payments solution that fits each trial’s needs. Corpay, moreover, has the banking footprint to deliver funds in country by leveraging more efficient local payment rails. A holistic solution can then also lead to faster delivery of payments to participants and other stakeholders, wherever they may be.