Many organizations face financial strain as they are asked to support investigator-initiated clinical trials with little or no budget or to absorb hidden costs arising in sponsor studies. Practical strategies are needed to identify and manage this risk at sites, using tools to evaluate feasibility, recover costs, and make decisions at the portfolio level. This will enable continued innovation, while building mission-driven research efforts that are likely to gain funding in the future.
“Demands to ‘do more with less’ are increasing with the dramatic changes we’re seeing in the research funding climate,” says Shannon Chism, Education and Research Consulting Senior Director at Huron Consulting Group. “Indirect costs were often used to reinvest and cover costs in the past but have recently seen a sharp reduction.”
While there is often a tradition of investing in junior researchers’ projects, this involves costs to the organization—time, equipment, overheads, and potentially the need for a study coordinator or research associate, notes Chism. Organizations may no longer be able to make the same level of investment. They must now consider feasibility, including factors such as whether a cost-share is appropriate, or perhaps the division can cover the cost of research. If central coordinator support is needed, a decision is needed on how the salary will be distributed.
The Perils and Pitfalls of Managing Unfunded and Underfunded Studies
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“This assessment of feasibility is similar to that recommended for all studies,” explains Chism. “Feasibility confirms that the organization has operational capacity to carry out the study, taking into account all extra internal costs. We recommend carrying out feasibility on any unfunded or underfunded investigator-initiated proposals, including a more detailed analysis of internal costs to determine financial feasibility.” This involves three key steps:
- Feasibility screening: This step is carried out by the office of clinical trials based on a checklist, leading to approval or rejection of the study. The ability to distribute the costs of centralized services and cost recovery are considered. Costs of ancillary services needed to support studies, such as blood draws and radiology, are also considered. One question that is often neglected is “What is the break-even point?” This determines how much can be invested across the fiscal year without risking a deficit.
- Cost recovery: In a centralized clinical trials unit, costs are charged back at a standard recharge rate or at salary. Typically, organizations rely on recovering as much of these costs as possible and do not spend more than 5% to 8% of their operating or salary budgets on unfunded research.
- Assessment of the funding gap: Another element is to have conversations with faculty leaders to ensure that everyone fully understands the size of the funding gap that needs to be filled.
Compliance is also an important consideration. Internal monitoring of unfunded studies is essential to ensure patient safety, with appropriate documentation and audit-readiness.
“These elements can inform honest discussions with institutional leaders and investigators about the true costs of ‘just getting it done,’” concludes Chism.
Edited by Jill Dawson
