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Home Back Issues No 25: Fair Market Value May Be Safe Harbor : Is Per-Patient Payment for Study a Conflict of Interest?

Apr 12

No 25: Fair Market Value May Be Safe Harbor : Is Per-Patient Payment for Study a Conflict of Interest?

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Fair Market Value May Be Safe Harbor

Is Per-Patient Payment for Study a Conflict of Interest?

Reader Question: Is it a conflict of interest if a physician is paid to conduct a study (e.g., $1,500 a subject, or even $5,000 a subject)? Does the amount matter?

Expert Comments:

Many commercial sponsors of clinical trials like to pay physicians on a per-patient basis for the costs of conducting a trial. Paying for their time and effort does not per se pose an insurmountable conflict of interest (COI), but when the payment amounts are out of kilter with the value of services, COI and kickback issues can arise.

Whenever you get a per-patient proposal from a sponsor, try to remember these three little words: fair market value (FMV).

The Food and Drug Administration’s (FDA) financial-disclosure requirements don’t mandate disclosing payments by sponsors to investigators for conducting a trial, but they do prohibit compensation tied to outcome — such as a bonus for a favorable study result. [See 21 CFR Part 54].

Federal regulators also recognize that financial relationships between sponsors and investigators may influence an investigator’s judgment. In fact, the Office for Human Research Protections (OHRP) urges institutions, institutional review boards (IRBs) and investigators to consider the following question when evaluating a clinical trial for COI issues:

Will the investigator “[receive payment per participant or incentive payments, and are those payments reasonable?” — OHRP Financial Relationships and Interests in Research Involving Human Subjects: Guidance for Human Subjects Protection; emphasis added]

So, although per-participant payments aren’t prohibited explicitly, they can raise eyebrows. How to tell the good from the bad? You guessed it — FMV. Or, in the words of the Office of the Inspector General (OIG), “payments for research services should be fair market value for legitimate, reasonable and necessary services.” — OIG Compliance Program Guidance for Pharmaceutical Manufacturers

To apply this rule to a study, first get a handle on exactly what the per-participant fee covers — medical procedures, materials, administration? Next, list the reasonable, fair market value of each item required to do the study, including time estimates for each task multiplied by the regular hourly rate of the professional performing the job. Finally, add them up and compare them to the per-participant price offered.

If the offered price doesn’t cover your costs, then it’s back to the negotiating table. If it’s way too high, it might be tempting to rationalize the difference, but you’re better off compliance-wise to adjust the contract price downward. Even better, show the sponsor the budget you’ve built and draft your contract to base your compensation on materials/services actually provided at your budgeted rates. Then no one can question whether you’ve met the FMV test.

Comments by Kristin H. West, JD, associate vice president and director, Office of Research Compliance, Emory University, Atlanta.

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Comments (7)
written by clatkin, April 20, 2010
This may be compliance. The issues of ethics are different. Any payment by commercial interest is a conflict of interest.
written by Ramon, April 20, 2010
It is always a conflict of interest to receive personal compensation for recruiting patients into a study. There is a reason why several studies presently recruit in third world countries or in countries where salaries are low. Likewise, it is a moral conflict that physicians bypass the negative outcome of the ethical committees in their own countries by testing devices in less advanced countries.
written by Anonymous, April 20, 2010
Payment per participant should be based on what is required per participant being enrolled and followed. Many studies are very tedious and require extensive blood work and the timing can be critical. The more complex the trial the more reimbursement should be given for the services required to enroll and follow each participant. As the PI shares the amount awarded per paticipant the trial should be scrutinized to evaluate the payment.
written by Brad, April 20, 2010
Conflict of interest is about whether those involved have something to gain that may affect study results, not whether or not to participate in a study as an investigator. If simple participation were a conflict then every investigator would be in conflict of interest because they all get some form of salary (directly or for their staff) and materials expenses. When interpreting conflict of interest you have to look at whether an incentive is being paid to include/exclude specific groups of participants that may skew results, and whether those implementing treatments and thos interpreting results could be influenced by the reimbursement for their time.
written by fgrannis, April 20, 2010
It is definitely a major potential source of conflict of interest. This type of payment for accrual into a research study is a major factor in academic success in modern medicine. The more patients you can accrue into a research study, the more money you bring into the academic institution to pay for the support system for performance of clinical research. The more accrual a clinical reseacher brings into the system the more credit he/she receives from investigational research groups and drug/device companies. In the long run, high accrual means academic promotion, committee positions on national organizations, publications, speakers bureaus and the perquisites that go with, i.e. travel, lecture fees, fine hotels, restaurants and the like. To me the major ethical question is whether IRBs should demand that the patient be told that the investigating physician is receiving this money. I believe that the answer is yes.
written by Anonymous, April 21, 2010
This could be addressed by the following: pay an up front portion that is based upon the work of getting the study organized, processing the contract, paying the departmental fee to the central administration; pay a substantially lesser portion per patient studied (whose clinical history suggests a likelihood of potential enrollment), a small amount per patient actually enrolled, then pay a final "completion fee" for completing all paperwork and submitting. This way the incentive is not simply on the patient being enrolled but the study center is paid for work performed. At the same time there is no blanket payment just because a patient was looked at. As to the issue of ethics, do not make a personal reward to the PI but pay the institution employing the PI. These will create safeguards for ethical conduct (no guarantees). Recognize the difference between rigid rules and good guidelines and safety. There is a difference between careless expenditure and well-considered payment.
written by fyurasek, May 11, 2010
Transparency will solve most issues. That way all parties have options. Hired guns, ronin, go to the highest bidder. Reseach, draw conclusions based on evidence, and let the chips fall where they may. Let intelligent people then to make their own minds.

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