Robbing Peter to Pay Paul: Financing Clinical Trial Follow-Up
Authors: David M. Dilts
Journal: Journal of Clinical Oncology (2012)

In the financial arena, there is a well-known difference between the income statement and the cash flow statement. An income statement provides a financial snapshot of the expected fiscal performance of an organization in a period, whereas a cash flow statement captures the movement of funds in and out of an organization. In a unique piece of research, Seow et al identify the cash flow aspects of clinical research. Specifically, they highlight two important issues with respect to National Cancer Institute (NCI) cooperative group clinical trials: first, that there is a major cost of patient follow-up in such trials that is not being adequately covered by current trial reimbursement, and second, sites may cover this funds shortage by opening new trials, in essence using new trial funds to pay for old trial follow-up. It is well known that cooperative group trials do not cover the total cost of their clinical trials. Until recently, the normal per-case reimbursement was $2,000, which had not changed in nearly a decade, but the actual cost per case ranged from $5,000 to $6,000. One result of this is that one third of 509 sites surveyed by the American Society of Clinical Oncology in 2010 reported that they would limit enrollment to cooperative group trials. Recently it was reported that the NCI intends to develop a plan to increase reimbursement to $4,000 for high performance academic and community sites that enroll a large number of patients to help offset the additional costs that result from increased accruals and large patient follow-up burden. This would be an excellent step in the right direction but ultimately requires either an increase in the NCI budget or a reallocation of scarce, existing NCI resources. Expansion in any US federal agency budget is problematic given that the US Congress has difficulty approving even continuing budget appropriations until the very last moment. If we assume that the NCI budget can be enhanced and that trial reimbursement will increase to a more realistic level, then there is the question of what will be the most likely use of these additional funds. In today’s oncology clinical research environment, there is appropriate pressure to fully characterize study patients, that is, to increase the degree and intensity of tissue collection and molecular testing of those patients who are enrolled onto clinical trials. Such collection and testing will provide important biomarker information for better understanding about treatment effectiveness for specific types of patients. However, collecting such information can be expensive; thus, it is possible that the increased funding could be used for important assessment testing rather than being saved for follow-up costs. As shown by Seow et al, up-front revenues should be saved but are often spent before patient follow-up. If follow-up is not completed, this will limit the value of the initial patient characterization. Perhaps it is time to consider more closely following the pharmaceutical industry model of progress payments. A pay-for-performance system does not give a single blanket payment per enrollee but gives staged payments on the basis of patients’ achievement of specific milestones. From a site perspective, this would allow for a better match with the timing of expenses incurred and reimbursement for those expenses. This would help prevent a site from opening new studies to help pay for the costs of follow-up in previous studies, as shown in Figure 2 in the article by Soew et al. Additionally, it might help to govern the use of any increased funding for a different aspect of the trial. If we assume a status-quo NCI budget or, more realistically, a budget decrease, then it will be increasingly important to select and prioritize trials correctly, which was one of the overarching goals in the 2010 Institute of Medicine report on the NCI Clinical Trials Cooperative Group Program. Sites should be more selective about which trials they open, and cooperative groups should be more selective about which studies to activate. This will mean fewer clinical trials, but such studies should be high-priority, major-impact trials that use innovative concepts and trial designs that enable achievement in a timely manner. Fewer, better characterized studies that are designed to answer important fundamental questions would be the best use of limited resources. In part, it is hoped that the existing merger efforts by multiple cooperative groups will lead to some degree of this prioritization. In an ideal world, there should be a clinical trial for every patient. Unfortunately, that is not the case. In an era of declining budgets, it is important to understand that sites cannot continue to cross-subsidize the follow-up cost outflows of old trials with the reimbursement inflows from the start-up phases of new trials because this only increases the delayed costs. Using financial parlance: this is taking on more new debt to pay off old debt. Or, as delightfully highlighted in the I Love Lucy episode “The Million Dollar Idea,” Lucy and Ethel go into business selling salad dressing, and when Ricky inquires about the economics of it, Lucy replies, “Maybe there is no profit on each individual jar, but we’ll make it up on volume,” to which Ricky replies, “I didn’t figure shipping, mailing, insurance, taxes, or overhead.” Clearly, it is time for all concerned to stop trying to make it up in volume and to understand and fully support the total costs of key clinical trials. JOURNAL OF CLINICAL ONCOLOGY E D I T O R I A L VOLUME 30 NUMBER 13 MAY 1 2012