Appendix 3: Summary of costing, contracting, and financing arrangements for clinical research in Scotland.
June 2021 C Weller
Costing in the UK is delivered through NHS R&D, based on a dialogue with sponsors and funders. NRS Central Management Team figures suggest a total Scottish commercial portfolio value of ~ £15-20m in new studies signed per year, although as realisation of this value is dependent on full recruitment to all studies, the actual income will be around £10-12m. Non-commercial income is not collated, but commercial studies (pre-COVID) comprised ~ 25% of the total portfolio.
The basis for engaging with the pharmaceutical industry was agreed in the early 2000s, as part of the Pharmaceutical Industry Competitiveness Taskforce (PICTF)
Commercial funders are expected to meet all costs over and above standard of care, and are normally expected to provide IMP for free.
Costs are derived using a standard tariff, comprising staff rates and procedures. Staff rates are based on Agenda for Change rates for nominal staff grades expected to carry out a given activity. Rates for standard procedures use rates derived on a survey of average rates, which are uplifted annually using the NHS England inflator value. There is a mechanism to add additional procedures not yet on the list.
This base cost is then increased by:
- An indirect cost multiplier (1.7) (staff costs only)
- A capacity building multiplier (1.2)
- A multiplier to take into account different organisational costs; England uses the regional Market Forces Factor (MFF), although this is technically only defined for English sites, Scotland uses a fixed figure of 1.2 for MFF to apply for all Scottish sites.
- Staff costs: base cost + 70% indirect costs + 20% capacity build +20% MFF for Scotland.
- Investigations: base cost (considered to already include any indirect costs) + 20% capacity build + 20% MFF.
Costs are captured using the Industry Costing Template (ICT). The sponsor is expected to complete the ICT. In Scotland, the agreed model is that a Generic Reviewer (GR) is identified who is expected to negotiate and agree a cost once for Scotland (subject to unavoidable local variation – however this should be very rare).
Negotiation should use the agreed rates, however there is often a need for discussion about the precise set of procedures and required staff time as specified in the protocol.
The UK wide ACoRD (Attributing the costs of health research) framework sets out the basis for identifying and attributing costs for non-commercial studies.
Under AcoRD study costs are classified as either "Research", "Support" or "Treatment" costs:
Funders should meet all research costs (with some limited exceptions for AMRC funders).
In Scotland, CSO meet SSCs (Study Support Costs), which are recorded by the lead Scottish R&D onto the NRS Finance System (https://www.nrsfinance.scot.nhs.uk/Administration), matched to study recruitment on ReDA, and returned to Boards annually in arrears as part of the CSO allocation model. Rates are set by CSO.
NHS organisations are expected to meet Treatment costs, which include the anticipated costs of delivering the intervention if the study intervention were to be adopted.
CSO operate a process to meet additional costs (netted against standard care costs) when they exceed certain thresholds – and similar systems operate in other UK nations. These are normally referred to as Excess Treatment Costs, or ETCs.
In practical terms, this applies to studies funded by organisations on the CSO funder list, NIHR list or which are eligible for extended review (this is a process that allows Investigator initiated research or projects funded by overseas charities or overseas governments to be added to the portfolio and thus be eligible for support and inclusion in activity metrics. )
The SOECAT (Schedule of Events Cost Attribution Template) was introduced UK wide in October 2018 to support collation of ETCs in England. Sponsors are expected to complete the SOECAT for each study as part of the funder application, and to then seek R&D signoff.
This is intended to help to ensure that all costs on studies are identified and properly attributed – particularly Research costs. It is not intended as a costing tool. Rates are included in the SOECAT, but these are intended solely for estimation of standard of care and Treatment Costs to enable estimation and central distribution of ETCs. Although payment of ETCs in Scotland does not follow the same model as England, the SOECAT can be used in an application.
There is no recognised standard tariff for non-commercial activities, but the CSO recommendation has been to use the standard Commercial rates (see above), less overhead and capacity building components.
Standard commercial contracts are negotiated and agreed UK-wide, by a group chaired by HRA, and including NHS and industry representation.
Trusts in England are contractually obliged to use the standard templates, but this is not the case in Scotland.
A number of variants are available to cover different options (CROs, Primary Care, etc).
Standard non-commercial contracts are also available, although there is more flexibility in their use. Simple contractual models are also provided to cover data protection issues when actively searching for patients in PICs (Patient Identification Centres).
Invoicing and disbursement
Invoicing and disbursement are largely matters internal to Boards, and the responsibility of Board Finance Directors.
Non-commercial income should be clearly identifiable and usable for the identified activity. While invoicing and appropriate disbursement can be problematic on multiple year studies, existing financial models are expected to be able to accommodate this.
For Commercial income, there are a number of issues:
- How to gather reliable information to invoice?
- How to ensure invoicing within defined timescales without loss of income?
- How to use overhead and capacity building components? Must these be used for the noted purpose, or can Boards be more flexible?
- How to handle income over multiple years?
Solutions are largely devolved to individual Boards, however the recent IFRS15 accounting regulations apply. These require income to be spent in the financial year in which it has been incurred, which potentially prevented saving and use of surplus funds, however current advice is for Boards to develop spending plans for saved capacity building funds, which is intended to reassure auditors.
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