Clinical trials have become increasingly complex, requiring a supporting infrastructure to ensure the conduct of research is compliant. This includes contract negotiation, coverage analyses to avoid erroneous participant billing, data systems to support compliance and participant payments, and oversight of the conduct of the clinical trial.
In a phased approach over several years to support this infrastructure, the indirect F&A for industry-sponsored studies has increased the rate from 27% to 30% with a target of 36%.
On December 1, 2019, all new contracts were negotiated with a 36% indirect rate and the Office of Clinical Research provided notice that all active trials should be renegotiated by December 1, 2021, from an indirect rate of 30% to 36%. Due to COVID-19 and other challenges, IU School of Medicine delayed implementation of the 36% target, but are now informing everyone that the 36% rate will be effective for all active studies as of October 1, 2022.
IU School of Medicine leaders are asking researchers to renegotiate their contracts before October 1, 2022. If not done at that time, the F&A rate will still be adjusted to charge 36% F&A, meaning study costs will be impacted, and any overdrafts will need to be covered through departmental/discretionary resources. Please see the FAQs below for further details, and check your email for more detailed information.
Thank you for your help in ensuring that IU School of Medicine can continue to support clinical research in an efficient and compliant manner.
Frequently Asked Questions
What is the best way to contact the sponsor?
The best way to contact a study sponsor is to reach out to the individual with whom the original contract and/or budget was negotiated. The sponsor can also be located in Kuali Coeus (KC) or by contacting the Office of Clinical Research by emailing OCR@iu.edu. It’s recommended that you provide the sponsor with the rate increase letter and request that any outstanding studies be brought into compliance.
If the sponsor agrees, what do I do?
Request that the sponsor provide a draft amendment (in Microsoft Word format) capturing the rate increase. This document will need to be routed to the OCR via KC for review and signature.
Do I need to change anything in the accounting system?
No, on October 1, all accounts will automatically update to the 36% rate.
What should I do if my study is in the close-out phase (i.e., all study events are done and awaiting final payment)?
If the account can be closed before October 1, 2022, no action is needed.
If the account remains open on or after October 1, 2022, then indirect costs will be assessed against residual balances at the university’s full indirect cost rates in effect at the time of the transfer of the residual balance. Sponsored projects that had previously been provided full or partial indirect cost waivers will still be assessed full indirect costs on any residual balances.
What if the sponsor refuses to provide more funds to cover the increased F&A? The project will still be assessed the full 36% indirect costs on expenses incurred on or after October 1, 2022.
What if the study budget is in deficit already?
If the study project is already in deficit status, then spending should stop, if possible. However, if spending does continue (increasing the deficit), then charges incurred on after October 1, 2022, will be assessed at the 36% rate.
You are encouraged to still contact the study sponsor. The sponsor may be more willing to increase funding if the costs exceeded the original application.
Does this affect the residuals that will go to my 2022 account?
Yes, according to IU Policy SPA-11-012, indirect costs will be assessed against residual balances at the university’s full indirect cost rates in effect at the time of the transfer of the residual balance. Sponsored projects that had previously been provided full or partial indirect cost waivers will still be assessed full indirect costs on any residual balances.
The views expressed in this content represent the perspective and opinions of the author and may or may not represent the position of Indiana University School of Medicine.
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