What does it mean for NHS Pharmacy Services?
The new Industry Costing Template will:
- Provide a clear methodology to calculate consistent and transparent prices associated with industry-sponsored studies to support both industry and the NIHR Networks
- Ensure all NHS Trusts are fully reimbursed for any activities associated with industry studies
- Identify standard rates for staff time, overheads, capacity building, costs for departments supporting research and investigations, which are acceptable to all parties
- Be facilitated by the NIHR Networks to speed up the negotiation process for costing
- Focus costing negotiations around specific local site issues
- Support rapid identification of anticipated costs for pharmaceutical and biotech studies in secondary care
Over the last eighteen months, the NIHR Clinical Research Network Coordinating Centre has been leading on a Costing Project to develop a clear and transparent process which will provide industry and the NHS with a consistent method of costing industry contract research carried out within the NIHR Networks. This version of the Industry Costing Template is designed for contract trials of pharmaceutical and biotechnology products conducted in secondary care. Templates suitable for use in primary care and in studies of medical devices are under development and will be released in due course.
Frequently Asked Questions
Has there been any involvement of NHS Pharmacy services in developing this project? NHS Pharmacy Services have played a key role in developing this process. The NIHR CRN Costing Process is the result of 18 months collaborative work with NHS R&D Forum, NHS R&D Staff, NHS Pharmacy Services, DH, University/ academic sector, NIHR Clinical Research Networks, Industry and CROs. Pharmacy rates have been set following consultation and advice from Chief Pharmacists and Clinical Trials Pharmacists, supported by extensive benchmarking of retrospective and real time studies.
How have Pharmacy Services been calculated? The prices for pharmacy services have been calculated in the same way as all activities captured in the Industry Costing Template, focusing on the time required to conduct routine research-related Pharmacy activities. Pharmacy staff hourly rates (fixed at the top of Agenda for Change band 7) are used as the baseline for direct staff costs. This is an average rate so there will be times when activities are conducted by a more junior or a more senior staff member but the rate will remain the same. Charges for activities such as dispensing, for which average times can be estimated with reasonable accuracy, are calculated according to the planned number of patients’ dispensing episodes. Activities such as “set up and closedown” may vary considerably in complexity, therefore, average rates have been estimated and classified into three categories or bands which reflect the complexity of the work required. These range from a simple dispensing study to a complex study involving aseptic technique. The timing required for individual activities within these bands has been agreed within the working group, leading to three fixed prices for set up and closedown. The Pharmacy element of the Costing Template has been piloted using a number of retrospective studies, in order to ensure pharmacy costs are appropriate for the NHS and also for Industry.
The overhead rate is higher than the local Trust would usually charge. Will this push prices up and make us less competitive? No. It is essential to understand that a 70% overhead is only added to the
DIRECT STAFF COST NOT to a commercial price. Previous costing methods have traditionally added 30-40% overheads onto the Trust commercial rate, whereas the Industry Costing Template bases its calculations on the direct cost to the Trust. The overhead multiplier is only added to direct staff costs (i.e. salary and employers’ contributions). This rate has been chosen as a result of extensive benchmarking to select an appropriate multiplier which did not inflate prices.
When are the overheads added? The hourly staff rate of £49.15 includes a 70% overhead and 20% capacity building so no further costs should be added to the figures in the Industry Costing Template. This rate was used to calculate all banded pharmacy costs.
What will the capacity building rate be used for? A capacity building rate of 20% is automatically added to direct staff costs and investigation prices. The capacity building multiplier takes the cost and creates a transparent commercial price for activities. This funding should be ring fenced by NHS Trusts to support local research activities.
Who will complete the Industry Costing Template? The Industry Costing Template will be completed by the company (either sponsor or CRO) then checked by the appropriate Clinical Research Network Coordinating Centre for accuracy and completeness before it is sent to potential sites/ Trusts/ Pharmacy departments by the Local Research Network.
What happens if I disagree with the price of a study? NIHR CRN cannot set a fixed price for NHS Trusts. However the Industry Costing Template has been developed to facilitate local costing negotiations and agreement with sites. Once the study is adopted and the site is confirmed by the company, the Local Research Networks will provide their sites/Trusts with the Industry Costing Template, obtain any feedback or requests for amendments to the proposed costing and provide clear reasons for any changes.
Reasons for amendments might include:
- Insufficient staff time allocated for a particular activity
- A study specific activity missing from the template
- A local requirement to conduct aspects of the study out of hours (e.g. limited availability of equipment)
- A study-specific feature or activity of genuinely exceptional complexity which is not adequately recognised by the assumptions made in design of the tool
The new pharmacy prices have been developed in full consultation with the NHS pharmacy sector and are calculated in an explicit time-based way. If any necessary variance occurs then a solution can be reached quickly and easily between both parties. This will mean that negotiations will be focused on activity rather than prices and there should be no hidden extras.
Do we have to use the Costing Template for NIHR CRN Adopted studies? Yes, the Industry Costing Template will be an integral part of the NIHR CRN Industry Adoption Process in the NIHR Networks and will form the basis for any discussions around study fees. Using a standard process should aid negotiation and hopefully speed up the whole process.
Can we use the Industry Costing Template for studies which are not adopted by NIHR CRN?
Yes, the Industry Costing Template is freely available to download from the NIHR CRN CC website. You may even find that companies use the Industry Costing Template for those studies not adopted by the Network, in order to support local costing negotiations.
Is there any help or advice available about the NIHR CRN Costing Process?
An email address has been set up to answer any questions or difficulties you may be having
crncc.costinghelp@nihr.ac.uk or please call the NIHR CRN CC Industry team for further advice on 0113 343 0341
Is there any way I can feedback on what is or isn’t working within the Industry Costing Template?
The Industry Costing Template will be closely monitored over the first 12 months and amendments will be made when required. If you have any concerns, suggestions or points you would like us to investigate then please email us at
crncc.costingfeedback@nihr.ac.uk.
Last updated: 18 January 2010
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