Samuel Whitaker’s Post

Does anyone have a good explanation for why the CTA is so broken down so granular? Why not just have passthrough expenses billed and then have SCs, and PIs etc bill their time…like basically any other professional services function?

The disconnect that I often stuggle with is that the "fair market value" concept gets applied universally across all site payments, instead of only to the payments going directly to the physicians or for work the physicians directly complete. In the context of FMV, the sponsor treats all of the payments as if they are to the PI even though that isn't the corporate structure of a significant number of sites these days. There has been quite a bit of rumbling over the last couple of years about the inequity between rates that central recruiters are paid to "only" refer patients vs what sites are paid to both recruit and conduct the study. I've seen studies where the central recruiting firm was paid the same rate for each randomized patient they referred as the site was to both recruit and see throughout the study. I think that the true fair market value is what the sponsors are willing to pay when there aren't regulations to hide behind.

The principal law that supports Fair Market Value is the Anti-Kickback Statute, which is designed to prevent pharma and device companies from paying physicians to prescribe their products to patients covered by Medicare and other U.S. government programs. To learn more about FMV, see https://www.appliedclinicaltrialsonline.com/view/when-fmvs-collide-coming-to-terms-with-fair-market-value. The Site Council has a toolkit that sites can use to combat misuse of FMV as a negotiation tactic.

The bigger question I have with using “fair market value” tactics during negotiation is that there is no transparency of this mysterious database of FMV. What if my facility cost, staff cost and overhead exceeds the alleged FMV? Regulatory concerns wouldn’t apply, all sites cost different amounts depending on locale, staff and faculty experience, etc. I’ve seen this topic come up from Daniel. Personally, I think transparency would do wonders. But, is there a FMV database?!

Jessica Dolfi -- And.. go.

What even is fair market value in this instance?

This emphasis happened around the time of the Sunshine Act, requiring public disclosure of payments to physicians. The intention was more for post-marketing activities, but it carries over into drug development activities as well. https://www.policymed.com/2011/12/developing-fair-market-value-for-physician-payments.html

When do we apply “fair market value” to drug pricing? Do unto thee, But not unto me.

The term is largely a theoretical notion in finance of a price established by negotiation between two parties having equal information. There is also legal opinion defining "fair price," though the applicability of this standard has long been an issue of legal debate. There are also government regulations defining "fair and reasonable price," which is the standard for most government procuremen The bottom line is that there is not a "fair market" for drugs. Government-granted monopolies related to patents or various incentive programs represent the antithesis of a fair market. The lack of transparancy surrounding industry's costs and the machinations of drug pricing also create asymetrical information.

Thanks for raising this topic. The concept of fair market value in clinical trials is a contentious one. The thresholds vary so widely between sponsors and even within sponsors. The ranges are extremely broad and frequently manipulated. The process of negotiating budgets may include breakdowns that are largely based on the protocol table of procedures, but neglect to pay for some of the sites’ most expensive and time consuming tasks.