Pass-through costs, including investigator grants, site fees, laboratory kits, ethics review fees and participant reimbursement, can equal or exceed the CRO's service fees. Yet in many studies no one clearly owns forecasting, approving and reconciling them. The fix is to manage pass-through costs as a budget in their own right, with an owner, a forecast and a regular reconciliation.
What counts as pass-through costs?
Per-participant and startup payments to sites, close-out fees, ethics committee fees, central laboratory kits and shipping, participant travel and stipends, translations, couriers, investigator meeting costs and, depending on the contract, monitor travel. They are "passed through" because the CRO pays them on the sponsor's behalf, usually at cost.
Why do pass-through costs go wrong?
They are often estimated loosely in proposals, sometimes deliberately conservatively, sometimes optimistically. They may be tracked outside the main budget reports. Administrative fees or markups are not always transparent. Variances stay hidden until a quarterly invoice arrives. And site payment delays create relationship problems that no budget report shows.
Who should own pass-through costs?
Ownership works best as a partnership between sponsor finance, sponsor clinical operations and a named manager at the CRO. The contract should define how estimates are built, who approves spending above thresholds, how often costs are reported, how advances are reconciled, what administrative fees apply and what backup documentation is provided.
How do you forecast them?
Use drivers rather than lump sums. Multiply active sites by startup fees. Multiply enrolled participants by per-visit costs and expected visit completion. Account for screen failures, which often carry their own payments. Estimate participant travel based on the population and geography. Then update the forecast monthly with actuals so finance sees the real trajectory, not the proposal's assumptions.
How should site payments be managed?
Sites remember who pays on time. Decide who pays sites, whether the CRO or a dedicated payment provider, how often, how invoiceable items are handled and whether any holdbacks apply. Track the age of outstanding site payments as an oversight metric. A site that waits months for payment will quietly deprioritize your study.
How often should you reconcile?
At least quarterly, comparing advances against actual spend, and in full at study close-out. Reconciliation is where errors, duplicate payments and unspent advances surface. Leaving it to the end of the study turns a routine task into an archaeological dig.
What is the payoff?
Accurate pass-through management gives finance a reliable forecast, protects site relationships and removes one of the most common sources of end-of-study surprises. For an emerging biotech watching its runway closely, that predictability is worth a great deal.
Questions about how clinical trial budgets work? Browse ABRA's frequently asked questions.
