Are Bad Payouts Preventing Clinical Trial Market Growth?
Clinical trials—experiments conducted to determine the safety and efficacy of a particular medication or healthcare device—remain a central component of biomedical research. Forecasts predict that the clinical trials market will continue to expand at a steady rate through 2026, driven—amongst other factors—by demand for clinical research in emerging countries and the globalization of trials themselves.
Despite an optimistic outlook on future growth, though, there’s one issue that the clinical trials industry needs to address as soon as possible—and that’s payments.
But first, let’s set the scene for anyone unfamiliar with the clinical trial industry. Clinical studies are managed and financed by a trial sponsor (typically a pharmaceutical or device company) or outsourced by the sponsor to a contract research organization (CRO). The sponsor, either directly or through their CRO, is responsible for paying both the clinical investigator (the individual or organization that actually performs the study at their trial sites) as well as the trial subjects (the participants).Despite an optimistic outlook on future growth, though, there's one issue that the clinical trials industry needs to address as soon as possible—and that's payments. Click To Tweet
The common solutions for sending payments to both of these parties remain woefully out of date, and that poses big problems for sponsors and CROs.
The Trouble with Clinical Trial Payments
Individuals participating in a clinical trial will generally receive reimbursements for expenses incurred, in addition to a stipend that enables and encourages their ongoing participation in the study. Today, most of these payments are distributed either by cash or check, presenting a host of problems for the trial sponsor or CRO. Cash needs to be held on-site and creates the risk of fraud or theft. Checks are a notoriously slow, labor-intensive method of sending funds that offer little transparency and few reporting options—issues that are only amplified for organizations paying internationally.
Of course, these clinical trial payment methods cause frustrations for the trial subjects as well. Participants need to wait weeks, even months for their checks to be delivered, then potentially incur additional costs during deposit. Cash has the benefit of immediacy but lacks the security and traceability of electronic payment options. Neither of these solutions is likely to encourage trial subject retention.
Clinical investigators have payout problems of their own. As with participants, most of these research sites are stuck waiting to receive their payments from the sponsor or CRO by check. Additionally, clinical investigators are frequently subjected to funds holdbacks—money that will only be distributed once certain milestones in the study have been reached—and payout cycles that can last several months, potentially leaving sites at a financial deficit for an undeterminable period of time. Coupled with an opaque payout structure and limited support options, it becomes clear why the industry faces a high rate of investigator turnover.
Better Solutions for Research Remittance
Admittedly, clinical research faces some unique challenges in resolving its payment difficulties. The industry operates under significant regulatory oversight, particularly with regards to confidentiality and privacy. For example, the Health Insurance Portability and Accountability Act (HIPAA) in the United States establishes protections for certain personal and health information, indirectly placing restrictions on how payments can (and cannot) be distributed to trial subjects. Nonetheless, it’s clear that the status quo is not sustainable.
Demand for electronic payment solutions is growing sharply, both amongst clinical investigators and their participants. The reasons are obvious: faster delivery, greater transparency, improved security, to name a few. A prepaid card system could automate many of the manual processes that currently fall to site operators, enabling them to quickly load and issue compensation and reimbursements to trial subjects. Tracking cards by inventory number (rather than by cardholder name) would ensure participant anonymity and support compliance with applicable regulations. Best of all, clinical trial payment cycles could become more predictable for everyone involved.DYK? A prepaid card system could automate many of the manual processes that currently fall to clinical trial site operators. #clinicaltrials #payments Click To Tweet
Trial sponsors and CROs stand to benefit from a switch to modern payout solutions, too. Electronic payment solutions can help these organizations improve financial management and mitigate their financial risk. Greater visibility into the flow of funds can improve their control and accuracy over payments to research sites and participants. Brandable prepaid cards and payee experiences—in addition to a superior payment experience overall—can help establish loyalty and boost retention amongst clinical investigators and subjects alike. Working with a comprehensive payout provider like Hyperwallet, sponsors, and CROs can reap all of these benefits on a global scale with end-to-end, local-currency payments.
There’s plenty of opportunity for trial sponsors and CROs to seize on the globalization of the market and grow their businesses rapidly. But before they start looking for new problems to solve, it’s essential that they find a solution to their payment woes.
See how Hyperwallet is helping researchers streamline their clinical trial payments. Click here to download our guide.