This article is the second part of a series on start-up costs in clinical trials. It focuses on how to evaluate, challenge, negotiate, and protect the CRO or Sponsor from compliance risks.
Part 1 deals with what set-up fees are, what belongs here and what doesn’t.
Not knowing what a Start-up fee is supposed to cover, is why sponsors overpay without ever knowing it. This part is about closing that gap: how to evaluate a Start-up request on its merits, what to push back on, and how to write payment terms that protect the sponsor if the site never activates.
Why Start-up Costs Are So Hard to Benchmark
Start-up fees are among the most variable components of any clinical trial budget, and historical data from previous studies can sometimes mislead more than help. There are several compounding reasons for this:
Study complexity and protocol density. A protocol with 30 procedures per visit, two biopsy requirements, imaging and a complex dosing regimen creates significantly more Start-up work than a less complex study. Comparing Start-up costs across clinical trials without accounting for protocol density produces meaningless benchmarks.
Therapeutic area demands. Oncology studies, for example, tend to involve complex eligibility criteria, specialist training requirements, tumor specimen logistics, and imaging vendor setup. Take your TA into account when determining if something falls within fair market value.
Country-specific regulatory environments. Ex-US sites in particular vary dramatically in what Start-up regulatory work is required. Some countries require full Ministry of Health approval before a site can initiate – a process that may take months and involves dedicated documentation effort. Others operate on simpler ethics-only frameworks. As noted in another article, understanding country specifics is (and will continue being) the differentiator between good and great budget builders.
Sponsor-specific requirements. Some sponsors require vendor training on proprietary systems, site qualification assessments that go beyond standard feasibility, or specific document preparation formats that standard site procedures don’t match. All of that generates legitimate additional Start-up work that needs to be recognized as such when evaluating Start-up requests.
The practical implication of all this: Start-up fees should be scoped from first principles on each study, using the protocol, sponsor and the specific site’s context as the inputs. A cost category table provides useful structure, but the amounts within each category need to be derived from actual scope.
Red Flags in Start-up Cost Requests
Experience with site budget negotiations produces a fairly consistent set of warning signs – none of these automatically means a cost is illegitimate but all of them warrant scrutiny before approval.
High upfront fees disconnected from workload. A $35,000 Start-up fee for a “simple” study could be a mismatch between scope and cost.
Vague line items. “Site activation fee.” “Study readiness costs.” “Administrative preparation.” These aren’t specific enough to evaluate. If a site did not clearly describe what activities are being compensated, that’s the basis for follow-up questions.
Fees tied to internal staff hiring. A coordinator being brought on specifically for the study is a site operational decision. The cost of finding and onboarding that person is not a study Start-up cost.
Duplicating costs. The most common version: Start-up includes a “training” line, and the per-patient budget also includes SC time or PI time that implicitly covers training-adjacent activities. If training, or any other fees, appears in two places, one of them is wrong.
Advance Payments: When They’re Legitimate and When They’re Not
Some sites, particularly in certain regions, request partial or full Start-up payment before the study begins, before enrollment opens, sometimes before the CTA is even signed. As you can probably tell, this creates risks for the Sponsor that need to be addressed.
A legitimate advance payment request usually comes from sites that genuinely need early cash to cover out-of-pocket costs (regulatory filing fees, lab kit expenses, patient travel reimbursement float) before the trial is generating per-patient income. The request makes operational sense, the amount is traceable to specific anticipated costs, and the expectation is that it will be offset against future payments as the study progresses.
What is less legitimate is an advance payment that is simply the institution pulling forward future income, or that doesn’t come with any recourse mechanism in case the Start-up doesn’t complete. A study can be terminated before Start-up activities finalize or a site can fail initiation requirements. If the advance is non-refundable and untied to milestones, the Sponsor has paid for work that may never be verified as completed.
The principle that should govern advance payment decisions: payment should follow deliverables whenever possible. Where a meaningful advance is genuinely justified, the contractual language should tie it to specific milestones (SIV completion, site activation, first patient in) and include a clear refund mechanism if those milestones are not met.
Protecting the Sponsor Through Contract Language
The Start-up section of the payment schedule should include provisions that manage the key risks: advance payments with no deliverable tie, refund gaps if Start-up doesn’t complete, and vague acceptance of Start-up costs that haven’t been properly scoped.
Some language frameworks worth building into payment schedules:
Advance payment conditionality: Advance payments, where agreed, should be explicitly tied to a milestone – SIV completion, site activation, or first patient enrolled – and should specify that any portion not earned against that milestone is repayable within a defined timeframe.
Refund obligation if Start-up is not completed: If the study terminates or the site fails to activate after Start-up payment has been made, the payment schedule should specify what portion is refundable and under what conditions. Full non-refundability is not acceptable for Start-up costs tied to activities that haven’t yet occurred.
Activation-tied payment trigger: Where possible, the majority of Start-up payment should be triggered by site activation or first patient in rather than a calendar date or contract signature. This creates a clear deliverable link and protects the Sponsor against paying for a site that never opens.
The Case for an Overall Start-up Parameter
Even with all the line-item detail covered in Part 1, there is no standardised approach to start up fees. For this reason, I would suggest coming up with an overall Start-up cost parameter that defines the maximum total Start-up amount for a given study, regardless of how the individual lines are structured. Sites that request fees outside the standard list can still have those fees accepted, provided the total Start-up cost stays within that parameter.
The parameter doesn’t replace the need to understand and evaluate individual components – a Start-up section that hits the maximum through a combination of legitimate and illegitimate costs is still a problem, even if the total looks acceptable. But it does mean that the individual line-item review and the parameter check are both necessary: one without the other leaves a gap in the evaluation.
Start-up costs are one of the most frequently accepted-without-scrutiny sections of a site budget, and one of the areas where the gap between what sites request and what they’re actually entitled to is widest. Breaking the black box doesn’t mean challenging everything – it means understanding each component well enough to know what deserves a question and what doesn’t. That’s the difference between a budget analyst who processes Start-up costs and one who actually evaluates them.
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