Overcoming the Challenges of Unexpected Project Costs

Cost control is a fundamental part of management in any industry. For the biopharmaceutical sector, however, it may even be critical: when a clinical trial’s costs begin to rise, it can put the entire project in jeopardy.

Naturally, a well-planned clinical trial rarely fails for a single reason: often, trial failure speaks of larger deficiencies during the initial planning and feasibility stages.

Out-of-budget costs often bring about additional change orders and therefore create further unexpected expenses. This “domino” effect can be prevented before the trial starts. Preparation, mitigation, and flexibility will make this possible.

Where do Unexpected Costs Come From?

The process to prevent unexpected project costs starts by identifying the specific bottlenecks where such costs may arise. The exact items that lead to inflating budgets may be unique for each trial, but often, they can be traced back to the same categories.

Changes to the trial protocol

Even minor changes to a clinical trial protocol can create a noticeable administrative burden.

How does this happen? At first glance, the adjustments will be limited to editing internal documents. Depending on the type of changes, some documentation for regulatory agencies may be resubmitted. In turn, this accrues the administrative costs for the trial. If there are any delays in obtaining the new approval, the trial launch may need to be postponed.

The full bill for any changes in the protocol is often hard to predict. It will depend mostly on the type of changes – with those that alter the trial duration being usually the hardest. Either way, it will be necessary to model the full scenario to calculate them.

Enrolment and recruitment

The patient recruitment process (from enrolment to retention) remains one of the main areas of concern for clinical trial managers.  Despite the attention it gets, it continues to be subjected to errors and wrong assumptions.

Most additional costs in this category appear after failing to meet the initial recruitment target. A study that does not have a sufficiently large number of suitable patients will most likely see its launch cancelled or postponed. To avoid this, managers often:

  • Extend the enrolment period
  • Redesign the recruitment strategy
  • Add new incentives for patient recruitment
  • Open up new additional sites, even in new countries

These strategies, while effective, will all lead to additional costs. However, the costs attached to the last one can be particularly significant. Any new sites opened in additional countries will require additional feasibility studies or risk compounding with the next category.

Lack of knowledge about study sites or countries

Multi-country clinical trials often pose risks when it comes to mismanagement and cost control. This is because many managers fail to see the full picture of a country, and therefore calculate the expected site costs based on the wrong assumptions.

These misunderstandings often relate to the local regulatory demands, supply chains, and the way the local healthcare system operates.

Logistical and supply chain problems

Closely tied to regional knowledge is the issue of logistical management. Once again, knowledge of the local conditions and regulations will probably be the strongest prevention strategy.

Most excess costs in this category appear during the importation of medical supplies and investigational medicinal products (IMPs). To calculate custom fees and storage costs, it will be necessary to have a realistic knowledge of the duties and deadlines that can be expected.

In many countries, this can differ significantly from the official information: for example, a customs procedure that can take “3 to 5 days” actually takes closer to 7, on average; or the “reference” cost of depots and warehouses not accounting for temperature control.

Staff turnover and burnout

Replacing staff in the middle of an ongoing trial will lower the team’s overall productivity. This is particularly noticeable during the “handover” stage, where a departing employee must take additional hours to prepare for the arrival of a new staff member. The new staff member will also need to be trained, and offered additional guidance during their onboarding process.

If the departing staff member had a supervisory or high-responsibility position, the costs and timelines for this process will be further affected.

Missed deadlines

Any of the reasons listed above create direct additional costs, but can also delay the work performed and cause missed deadlines. In turn, these will lead to additional work hours billed, and – in critical cases – to negotiating extended leases for sites and equipment, or even to resubmitting key documents.

What to Do About Unforeseen Costs?

Cost control tactics will need to involve two key strategies: prevention and mitigation.

It should be understood that there are no preventative tactics that can eliminate the risk of unforeseen costs. However, the early planning stage should still seek to minimize them wherever possible and attempt to formulate the most accurate cost predictions possible.

In this sense, two tools will be key:

  • Clinical trial feasibility studies. This is the best opportunity to identify the possible “weak spots” for a future clinical trial. Special attention should be paid to site feasibility and patient recruitment. These are closely tied together and often cause the largest cost escalations.
  • Scenario modelling. Based on the risks identified by feasibility studies, a series of possible scenarios should be described, and their full impact should then be followed until the trial’s theoretical conclusion. Then, the cost difference generated by each scenario should be calculated.

The predictions generated during scenario modelling will, in turn, form the basis for future mitigation strategies. If possible, additional contingency budgets should be earmarked from the start, and activated if any of the modelled scenarios arise. These adjustments may include cost control measures in order areas that don’t compromise the overall trial.

The Role of a CRO in Project Cost Management

Clinical Research Organizations can provide valuable help in the planning, risk assessment, and management of a clinical trial.

For multi-site and multi-country clinical trials, the biggest benefits can be provided by CROs with an established presence in the target country: they will have more in-depth knowledge of local characteristics, risks, and opportunities. This may also include:

  • Stronger ties with local suppliers and vendors
  • More accurate knowledge of regulatory procedures
  • More access to local Key Opinion Leaders
  • Larger established networks for patient recruitment

These assets will provide the basis for more accurate scenario modelling exercises, more thorough mitigation plans, and ultimately, a better chance of trial success.

About Author

Janis Brix is the CEO at Wigwam Digital – a growth agency for life science companies. Read more on wigwam.digital.

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