(Previous discussion continued)
Re: Clinical trial TDC indirect cost assessment Herbert B. Chermside 29 Jan 1998 11:15 EST

Re: Clinical trial TDC indirect cost assessment Herbert B. Chermside 29 Jan 1998 11:15 EST

I would recommend strongly that you not make modifications to the base for
TDC, although you could have "on" and "off" rates.

At VCU we have a separate indirect cost rate for clinical trials.  Actually
two rates.  20% TDC for on campus and 15% off campus, with off campus being
defined as involving a budget that includes rent for the space where the
study is conducted.

This rate was set as a compromise between what the market will bear  and an
attempt to collect as close to our "real" rate as possible.  Our on campus
research rate is 45% MTDC.  I found that there were two major problems with
applying that rate.  First, the number, "45", was shockingly greater than
"20".  I assure you, the psychological impact of the number prevents even
rational people from looking at what the base is.  Even if the total cost
of 45% x MTDC was less than 20% of TDC, the "20%" figure was preferred.
Second, if we used an MTDC rate, in which "patient care" is a modification,
there was extreme confusion within the institution as to what should be
excluded.  Officially, "patient care" is defined as a limited set of object
codes in the accounting system (which are costs that have indirects built
into them; mostly recharges of hospital or physician costs), but health
care professional could not grasp that.  They could not understand why a
lab test done in the hospital's clinical labs was "patient care", whild one
done by an outside lab (a service cost) was not.  We did an analysis of
several proposal budgets and found that 20% TDC was pretty close to 45%
MTDC (as calculated by the health professional -- remember, they are the
people who put together the budgets and have to "sell" them!).

Our best information at the time of setting this rate was that 20% TDC was
a common figure used by similar institutions, and one that pharmaceutical
houses would accept.  (Today, they might accept 25% or 30%, if everybody
moved in that direction.

I will still apply the 45% MTDC rate (VERY carefully examining to see that
the accounting definition of patient care is used) in a case in which there
is a lot of bed cost in our hospital.  However, space and other
considerations have dictated that clinical trials needing bed space are
more often done in space rented outside space, so the rate of 15% TDC with
rent a direct cost usually becomes cost-acceptable to the sponsor.

Chuck Chermside

At 09:00 AM 1/28/98 -0800, you wrote:
>     I'd like to hear from institutions that use the Total Direct
>     Cost base indirect cost rate for clinical trials.  The
>     question is, do you ever exclude certain cost items from the
>     base--contradicting the concept of TDC.
>     For example, in an in-patient trial with high bed costs
>     comprising a major portion of the budget, is the TDC
>     assessment on all cost items, even the bed costs (which are
>     burdened by the hospital)?
>     We are being told by a researcher that the drug companies
>     are protesting paying IC on the bed costs.  Any similar
>     experiences from my colleagues?
>     Christina Hansen, Director
>     University of California, Irvine
>     xxxxxx@uci.edu
Herbert B. Chermside, CRA
Director, Sponsored Programs Administration
Virginia Comonwealth University
PO BOX 980568
Richmond, VA  23298-0568
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