The points below reiterate several concepts Brad and I discussed on his podcast, and adds other strategies to consider when finding ways to improve the financial performance of your clinical site, particular with respect to pricing, contract negotiations, and cash flow.

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Pricing

• Maintain a standard price list for as many fee/service items as possible, with flexibility to tailor your pricing and unit levels to each study's specific needs.

• Estimate the standard internal costs to perform those same services, documented in a way that allows you to compare your total fees against total costs for a gross profit estimate.

• Focus on pricing your services around the value they provide, instead of simply how much time it takes to perform those services. Otherwise you leave money on the table.

• Use cost as a way to ensure your final pricing is at least providing the minimal level of gross profit you're willing to earn.

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Contract Negotiations (focusing on financial elements)

• Enter the negotiation knowing that your counterparty (whether Sponsor or CRO) already has the funding in hand for your contract. This gives you significant leverage to negotiate payment terms favorable to you.

• Realize just how much is at stake in these negotiations- consistently poor outcomes in contract negotiations play a pivotal role in why many organizations underperform their financial goals.

• When faced with arguments like "[this] should cost less than [that] because [this] should take less time", counter with:

  • "our experience is that's not the case" (it can be that simple)

  • "actually, we typically see more data reviewed during remote versus onsite visits" (the value is in the data, not the time spent or location)

  • "I'm sorry but it's our policy to charge for the same for both versions of that [service]"

• When faced with arguments like "we've never paid that [fee] on other studies", or "other sites don't charge that [fee]", counter with:

  • "I can't speak for all studies, but we have this fee in place on other studies because of [value provided by the service, or effort involved]​"

  • "We are happy to roll this fee into [other fee] and increase that line item accordingly"

  • "Our experiences must differ because we know other sites commonly charge this fee as well, for [reason]. Thank you for understanding."

• If you hit an impasse, recognize you are likely not interacting with a decision maker (especially if negotiating with a CRO). Ask your counterpart who they would recommend get involved to resolve the impasse, and that you look forward to participating in the trial as soon as possible.

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Cash Flow

• Startup Fees should always be due upon signature of the contract. Invoice these within 24 hours and ask your counterpart to forward it directly to their Site Payments / A/P team for prompt upfront payment.

• When an invoice you've submitted has not been acknowledged by the payee, chase this confirmation weekly (more frequently towards due date) until a payment date is confirmed.

• Request payment electronically whenever possible.

• Keep templated forms on hand for escalating late payments. 

• Avoid quarterly payments in arrears. Insist on monthly payments.

• Avoid holdbacks wherever possible. Financially disciplined service providers (like the CRO you're negotiating with) get paid for services performed at the pricing agreed to, when the services are completed (and often in advance).

• As noted above, remember that your payee has already fully funded your payment, and has no legitimate excuse whatsoever to pay you late. 

• If you allow companies to consistently pay you late, you are disrespecting yourself and your organization.

• With inflation at 40-year highs, payment in 90 days costs you 2% of your purchasing power, and significant loss of time better spent elsewhere.

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