Clinical trials often involve complex, high-value contracts that require reconciliation as the trial nears its conclusion. With varied payment structures and contract terms, it’s crucial to understand your obligations to ensure that the final reconciliation is transparent, accurate, and fair for both parties.

Know Your Contract

Understand the Payment Structure

• Unit-based: Vendor bills monthly for work completed.
• Time and Materials: Vendor bills monthly for hours worked and associated costs.
• Milestone-based: Vendor bills a percentage of the contract value upon reaching key milestones (e.g., Last Site Activated, Last Patient In, Database Lock).

Considerations for Early Trial Termination

Minimize Carrying Costs: Immediately stop unnecessary activities (like meetings) after trial cancellation to avoid additional billing.

Blended Line Items: Review blended line items that include multiple activities to ensure they match actual trial activities.

• Monthly management units that require varying levels of effort throughout the trial are impacted most by this
  • Project Management
  • Clinical Team Management
  • Meeting/Teleconference line items
    • Usually include varying attendees required throughout the trial timeline
• Other common line items impacted
  • Regulatory submissions
  • ICF related units
  • Database Migrations
  • Protocol Amendments
    • Minor vs. Major

Milestone Contracts: If milestones were not met, ensure vendors report actual work completed, not just based on invoices.

Additional Considerations

• Upfront Retainers: Track retainer balances in invoices and understand when they are drawn down and replenished. See the “Managing Upfront Payments” resource for details.
• Bonus/Penalty Clauses: Be clear about any contract clauses that could affect final costs or result in credits.
• Inflation Clauses: Clarify how inflation adjustments are calculated, especially if the trial timeline shifts.

Reconciliation Overview

The reconciliation process is the same across payment structures:

Total Cost Incurred −Total Amount Paid = Final Reconciliation Value

• Total Cost Incurred: The final contract value determined by the vendor and agreed upon by the sponsor.
• Total Amount Paid: All payments made to the vendor to date.

Documents to Request for Reconciliation

To confirm Total Costs Incurred, request:

• Final Budget with a detailed line item breakdown.
• Unit Tracker showing completed tasks by month.
• Record of all pass-through transactions and site payments made by the vendor.
• Site Listings: Includes recruitment, activation, and deactivation dates to validate site-related budget items.
• Final EDC Reports:
  • Subject Visits Summary: Confirms patient visits by site.
  • Invoiceable Reports: Verifies invoiceable activities.
  • Final Visit Report: Tracks patient activity and final visits, useful in early trial shutdowns.
  • Monitoring Visit Listings: Compares completed visits to the budget.
• Independent Expense Estimates: Use real trial data to assess the reasonableness of the final contract value.

To confirm Total Invoices Paid, request:

• Vendor-provided invoicing summary of all invoices sent and received payments.
• Internal invoicing summary of all payments made to the vendor.

Software Tools

• Clinical Trial Finance and Accounting Software: Newly adopted technologies that utilize real clinical trial data in tandem with all of the vendor contracts to produce a defensible estimate of trial spend in relation to the contracted terms. This provides a reasonability check against the final contract value the vendor is requiring.
• Investigator Grants Payment Software: Provide more clarity into what is being invoiced from each site and enable a more streamlined payment process.‍
• Automated Invoicing Software: Some ERPs are equipped to support automated invoicing with your vendor to provide transparency and alignment of all transactions, enabling a clear understanding across parties of the invoicing position per contract.

Benefits to Software Tools

• Automated workflows enable swift decision making and ease of scaling
• Utilize defensible clinical trial data to support calculations

Final Reconciliation Documentation

Once the final contract value and payments are agreed upon, memorialize the agreement in a final change order or closeout letter.

• A Final Change Order strikes the old contract and replaces it with the final budget.
• A Closeout Letter documents the final contract value rendered by the vendor.

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