Inside the Bid: What Sponsors Need to Know About CRO Pricing, Pressure & Proposals

Well, same to you — great having you. I think this is going to be a very unique conversation for anyone familiar with each of our work.

Kieran @ Seuss+ (01:14)
Yeah, I often have conversations with investors or biotech leaders who are flabbergasted by the big numbers, by the lack of clarity around how they're built. That's why I think today's a great day to talk specifically about proposals created by CROs — they're a majority, a big percentage of the expenditure of a fund for a stage biotech company's clinical development. They're looking to execute, to gather data, to prove safety, to prove efficacy, to prove scalability, and to get approved to bring it to the patients so many of these biotech leaders are passionate about. Many of these small biotechs are owned, founded, and managed by individuals who, earlier in their careers, became passionate about a disease or indication area — often for very personal reasons, or reasons intrinsic to their own motivation. So when we start talking business, money, and clarity on what something is going to cost, it becomes very difficult, because you want to achieve something and the finances just aren't as clear.

It's like going into a supermarket — you know eggs are going to cost roughly X. Maybe not the best example given what's happening with egg prices right now, but it's true — we're comfortable with the standard, the mundane, the idea that something costs something. And I think the challenge we see is that in this space it's unclear, it's not transparent, and it's often kept in a gray zone. So that's what I love about this conversation — I'd love to ask you some questions.

Yeah — I'll just say, the price of eggs is out of your control, which makes it frustrating, and that can be a similar feeling for folks, especially in small and medium-sized biotechs, where this might be their first year or first few years getting accustomed to this. They feel like working with a CRO, and their pricing and budgeting, is out of their control, and that they just have to accept what's given to them. To some extent that's true — but to some extent, you can influence how those things change, or how you scope it. So it's not quite as dire as the price of eggs, where you just show up and pay whatever's at the register.

Kieran @ Seuss+ (03:48)
Yeah, and I agree — I think the proposal moment is the first time we start talking about money, and what something will cost based on assumptions. And as those assumptions change, sometimes the unit costs are influenced too. There's a volatility to some of this — at the beginning, we're agreeing on goalposts: what do we need to achieve, what numbers are we aligning to — patient numbers, site numbers, locations — things that influence cost but aren't always clear at proposal stage.

But I'd love to ask you this first: from your perspective, what are the most common misunderstandings or misconceptions that sponsors or small biotechs have about CRO pricing — what they're seeing in a proposal or a bid grid?

Yeah, I think there's a conception that CRO budgets are rigid and very standardized. In reality, pretty much every CRO has a different platform for its pricing — especially among the larger CROs, but really any CRO — no two CROs' pricing tools look the same. There may be a couple out there that have bought into some of the common platforms, which I won't name, but the overwhelming majority of CRO pricing is done in Microsoft Excel, and will be for many years, is my estimation. So maybe they're on the same application from that standpoint, but they've all built their own customized, configurable tools. Full disclosure — that's part of what I build for a living, and I've never built two that look the same. There's no "Joel White CRO pricing tool" where I just plug a CRO's numbers into a tool that looks like everyone else's. That's because no two CROs are the same, even if they can feel commoditized in a lot of ways.

To get back to your question — a CRO's tool will have standard rates for the people they charge to the project, standard hours for most tasks, and for things like technology and licensing there will be standard pricing, which tends to be more rigid. But every full proposal is heavily customized for every opportunity — maybe not so much at the ballpark stage. If you're in fundraising mode and send a one-pager asking for a rough price, you'll probably get a pretty standardized output, because the CRO isn't going to spend too much time on it. But if you send a real phase two study to a group of CROs, they'll go away with their teams and analyze it in depth — and especially the less detail you provide in your RFP, if you send it to four CROs, you'll get four very different sets of internal conversations. They'll heavily customize their tools to produce their budgets — and we're just talking about the pricing side. They'll all have different strategies, and they'll resource the work from different areas. Where they plan to resource a phase two study in the RFP you send them will probably be different than what they do next week for an RFP from another biotech. So the key point is that there's a lot of intense customization by every CRO for every real RFP — it's not just plugging in 50 sites and 10 months and having the price pop out and get zipped off to you.

Kieran @ Seuss+ (07:37)
I think that also explains something — we have a lot of conversations, especially with teams under time pressure, in a rush, saying, "could they turn this around in X, Y, Z amount of time — in a few days, get us a complete budget or a complete proposal?" Having also been on the CRO side, I think that's the thing — even if the team wants to, or the company is under pressure to rush that moment, it's genuinely complex and tailored, and based on a huge number of assumptions at that moment. So yeah, I agree that's the case.

Yes. And that's why some biotechs wish CROs were on more of a common platform — just like there are common outsourcing platforms biotechs and pharmas can use, where you'd say, "CRO, put your budget in here." Well, why can't my CRO just use that pricing system too? It's the gazillion assumptions you're talking about — different CROs have different assumptions, and the more you force them into your assumptions, the more you're going to get budgets back that change in unexpected ways throughout the life cycle of the project.

Kieran @ Seuss+ (08:50)
Yeah, so it's a balance between giving rigidity so we have comparability at an initial stage — at least, because at the RFP stage we're choosing between CROs, and identifying which are financially unachievable, because that is the case sometimes, this just isn't a viable outcome — and which are potentially, there's also a clear sense of who's underpricing to get in and—

—force it.

Kieran @ Seuss+ (09:19)
—and therefore the risk of change orders is higher.

Of course. That's the nature of our industry, and other industries — we're not alone in this. You get this sense sometimes that clinical research is a hundred percent unique in this way, but look at any industry with long-term projects — large office construction, airplane construction — it's a world of change orders, because long-term projects with people providing services, that's just the case. It's not the case in software — you buy a platform for three years, you can fix that in. But when you're talking about—

Kieran @ Seuss+ (09:58)
—which has its own overpricing issues, by the way.

—things are constantly changing, where it's highly regulated, and those regulations change, administrations change. Your initial assumptions — most of which are contracted before you even have a final protocol that guides the study, and the protocol will often change throughout — you're going to have change orders. Few change orders are pleasant, but they're a fact of life.

Kieran @ Seuss+ (10:39)
Sometimes they just are.

You've got to be smart on your outsourcing. To expect a five-year oncology trial to have zero change orders — that's naive.

Kieran @ Seuss+ (10:53)
Is naive. And I think in certain cases — yes, there's bad behavior on both sides. I do see that, less-than-professional handling, or handling without integrity — that's there too. But there's also a lot of forgetting with change orders and scope changes. It's also about remembering what we agreed. If we're reviewing what's being spent or done, then—

—it's on a scale, right? Yeah.

Kieran @ Seuss+ (11:25)
—there are going to be changes. Some things fluctuate, and because we changed something six months ago, now we're seeing an impact on our budget. I think the problem is often that it's not signaled in time, it's not agreed upfront, and so it comes out in hindsight, when everyone's already annoyed — "we already did the work." "Yeah, but I didn't know what you were doing." It's like going to a restaurant and they've fed you all kinds of side dishes — in Italy you get a plate of bread, and as a naive tourist you eat it, and then suddenly it's on your bill. The amount of conversations tourists have about that is almost comical — it's bread, and the cost isn't even that high, but it's the feeling of unfairness that's so loud. And I think that's one of the issues we definitely see in this process.

There's a human, emotional reaction to this. You're relying on someone you'd call a partner at that stage to use their expertise and experience and tell you what you're going to need to do it. And then, along the way, that trust and partnership erodes to the point of, "well, those assumptions all changed," or "it's taking us a lot longer to do source data verification" — but the source data is still the same as it was when we signed the work order, post-proposal. What do you mean it took longer? There's an accountability that ends up sitting, interestingly, in the hands of whoever is paying, later on.

Yeah, so — Kieran, the first question you asked me was what are some of the misconceptions. Well, what's not a misconception? What does have a large basis in reality is that CROs can be very irresponsible with change orders — and not always even intentionally. I talk about these pricing tools, and some of them are set up in a way that can fail the customer. I've written about "mixed units" before. Plenty of units aren't mixed, and are perfectly straightforward — for a monitoring visit, the CRO's assumption might be, to price that visit we'll assume X hours per visit, and then, unless there's some odd geography factor, the unit price will stay relatively constant through a change order. But then you'll get other units where the actual build has multiple drivers that are rarely transparent to the sponsor. So you could have a unit like your clinical database design — the customer sees a unit that says "$120,000," and thinks, great, that's my fixed price for the trial. There's a small comment off to the side that says this is based on 32 unique CRFs and a six-week build timeline, and so on — but underneath the hood of the pricing tool, yes, there's a one-time fixed effort, but there's also a price per unique CRF, and they might have the edit checks embedded into that unit too. You're never going to know at study outset exactly how many edit checks you'll ultimately need, especially when you can have thousands of them now. If you estimate 1,011 edit checks, it's not going to end up being exactly 1,011. Those are the kinds of things you need to split off into their own unit — so that if it's $5 a check, and you end up doing 1,000 instead of 1,011, or 1,050, you can see that the actual count changed, but at least your unit price didn't. So when I talk about mixed units, the goal, as much as possible, is to have a one-to-one relationship between how you construct your price internally and how you present the unit to the customer. That's why. It's almost impossible to do that a hundred percent, but there's always dramatic room for improvement — that's what my benchmarking work is about. So it's not a misconception that the basis for the pricing seems to shift — it's because there's often a mixed story underneath the hood.

Kieran @ Seuss+ (15:53)
Yep. And it's interesting — once it's in whatever system they're using, it becomes "the truth." I sometimes smile, because I look back at myself 20 years ago, in discussions with clients, saying, "this isn't what my spreadsheet is telling me, but I'm happy to get on the barricades to defend — this is what it needs to be." A lot of the time, people don't actually know what's behind it, what's under the hood, but they feel very adamant about defending what's on paper or what's coming out of the system. And the challenge is that we end up having human discussions, arguments, and friction, when really there's a financial mechanism behind it. The first thing in a proposal is deciding which of these—

—system.

Kieran @ Seuss+ (16:51)
—we don't want to fall in love with, because we can't afford it. It's like looking for a car — we may want to drive... okay, name a favorite one, don't name an Aston Martin — we may want to drive a beautiful car, but we can afford a secondhand Volkswagen Polo, or a Lada. It'll still get you to your destination, just with a higher risk it'll break down, or you get left on the way. But those are decisions — and some of those decisions get made upfront by a sponsor saying, "I really can't, even though I may want—"

—that Bentley.

Kieran @ Seuss+ (17:32)
—Rolls-Royce. An outsourcing manager from Eli Lilly once said to me — this was many years ago, back when I was working at ICON — "we are happy to pay for the Rolls-Royce, as long as it is the Rolls-Royce. We are not happy to pay for the Rolls-Royce and get the Lada." That stuck with me, because that's exactly this process. At the proposal stage, our sponsors, our small biotechs, are highly dependent on the reliability, integrity, and experience a CRO brings to pricing something. There are lots of tools out there — we work with some of them, and we have our own data — to say, "this seems a little off." And it's interesting to see the indignation: "what do you mean? That's what it costs." Well, I guess that's what your tool says it costs, but it's interesting that your tool is saying that, because it seems really off. It becomes a human interaction. I think that's actually a fun part of this — there's a reason we choose between different CROs or vendors, because they distinguish themselves in different ways, and one of those is cost. But one of the ways the relationship gets badly damaged is when that's not transparent, not managed like it's part of the business, and instead becomes this whole contract-negotiation thing — "we need to now talk about money." Because what we're paying for needs to be delivered the way it was agreed, and we will pay for that. It's when that becomes gray that we get so much friction, and trust breaks down to the point of real, rescued disaster in a lot of ways.

What's great about this conversation is that I think we'll have a large mix of people listening — from the CRO and larger service-provider side, and from the outsourcing, biopharma side. And I hope there's a takeaway here: if you're a CRO, you need to constantly make yourself as easy to do business with over the long term as possible, and transparency in pricing matters. That doesn't mean you should, or need to, hand your pricing tool over to the sponsor, or give them a demo of it, or adopt whatever system they're asking you to price everything in. It doesn't mean you have to do those things. But it does mean that — maybe in version one, the sponsor is just looking at the total price — but as the relationship goes on, you can really damage things by constantly changing your pricing for things they couldn't reasonably expect.

And on the vendor-management side, which you're the expert in, not me — if I were on that side, that's something I'd hold CROs really tightly accountable for. If I'm paying for 10 units of something at $500 a unit, and then you tell me the unit is now $550, that's something I could not reasonably have expected. That's a legitimate pushback — all the years I was in-house, that was always the hardest thing to explain, and it's a lot of what brought me to how I approach this today. It's typically one of the first things you just adjust, because you think, "well, I don't have a good reason to dig my feet in on that," so you move it back to $500. But the best thing to do is avoid that confrontation from the beginning — and I don't mean you should just roll over, I mean set up your tools and your finances so you don't need to change that from $500 to $550.

Kieran @ Seuss+ (21:07)
Yeah. We are seeing evolution, at least within small biotech and pharma, toward an inclination to have control, transparency, visibility, and management of that. And it's interesting, because I hear from quite a lot of CROs, "we never have this issue with any other biotech clients" — and I always think, that just can't be true, because a lot of what we do is really digging into the finance side, and—

It's hard for me to hear that, because CROs hate it when a biopharma says, "we've never seen that from a CRO," about things you know they see every week. So for me to hear you say CROs are saying that makes me very, very sad.

Kieran @ Seuss+ (21:44)
No! — yesterday. That's not even long ago — yesterday. But I think that's actually part of the problem — I will stand a hundred percent on a barricade for any CRO or vendor, to say to any one of my clients, "you asked for it," or "you managed it this way, therefore you pay for it, you changed scope, it is what it is," or "the way you've managed this is unfair." I think that's why Sabina and I have always said Seuss+ doesn't live on the sponsor side or the vendor side — it's how we make sure everyone is driving to execution together. The article I just finished this morning is "Execution Is Sexy," because I'm so happy we're starting to pay attention to what's been the mundane — the scary parts, the contracts — and part of that is also the finance side. I think that's a super important part of maintaining trust, transparency, and integrity. I agree with you — I think there's a lot more variability than we assume; as soon as it's in an Excel sheet, we all think that's just what the number is. But it's very important — this is one of the pillars trust is built on.

I'd love if you'd give some advice to our sponsors, to the smaller biotech and pharma — how can they be more strategic in budgeting, or in requesting and getting that information, in the proposal stage? I know how our clients do it, and I'm not concerned about our own process — I'd love to hear from you, if you were advising any other biotech, how they could best be more strategic, to avoid friction and stay in control of those numbers upfront.

All right, so you're asking how to get more accurate and durable quotes and budgets in the earlier stages? I'd say, geared especially toward smaller and medium-sized biotechs — if you're sending something to CROs just for fundraising purposes, just say so. You're never really going to get in trouble for saying that. It's when you don't say it, and CROs have to guess at your actual motive, that you get thrown to the bottom of the pile, and you'll just get a generic ballpark output. But if you say, "look, we're in our fundraising stage right now, and we expect this to become a real opportunity over this timeline," you're still just going to get a ballpark budget back, because that's really all it should be at that stage — you don't know your sites, your countries, maybe you have a good idea on patients, but nothing is final, everything is preliminary. Still, you'll get a much better, more thoughtful ballpark than if you hadn't said anything. Whereas if you say, "we've got this amazing program starting in 12 months," that's the first cue that this isn't serious, and it almost feels like you're trying to sell yourself to the CROs responding to you, when really being upfront is what gets you the most accurate quote possible. CROs are pretty good at reading into that — especially over roughly the last 12 months, where it's become well known just how much the quality of RFPs — air quotes — has deteriorated among smaller biotechs, with a lot of them really being fundraising exercises.

Kieran @ Seuss+ (25:26)
It has?

Yes. So at the ballpark stage — whether you're a small biotech fundraising, or a larger pharma preparing next year's budget and not ready to send a real RFP yet — if you're fundraising or budgeting, just say so. If a CRO really wants to work with you, they'll engage. You're not going to get a beautiful proposal with a full study strategy and a detailed, line-item budget that'll still hold up six months later, but you'll get a much better output.

At the RFP stage itself, I can't put it down to just one factor, but one thing that always stood out to me — probably the best example I've seen of an RFP that controlled future scope change and stayed a durable budget — was, and I don't know if they still do this, back in the day, Gilead used to send RFPs that were basically draft contracts, typically alongside a final protocol. I mention their name because they should be proud of it. As a CRO, you were essentially filling out a contract — sending back a draft contract. It wasn't necessarily signature-ready, and maybe the "final" protocol wasn't truly final, but you always felt, as a CRO, that when you got that RFP, it was serious business, and they always followed through on the sponsor side. So you did what you were supposed to — you came to the bid defense, you knew you were one of two, three, or four CROs, and that got cut down further for the bid defense. You always knew that when you got an RFP from them, it was game time, and you needed to put your best foot forward on price in version one.

Kieran @ Seuss+ (27:09)
You were actually in the game — you could count the potential percentage.

And I'll just use that as an example of probably the best I've seen it done, because it made everything more serious. On constructing an RFP itself, I think your audience would probably be best served hearing that from you.

Kieran @ Seuss+ (27:38)
I'd love to hear — outside the complaints about rigidity and the amount of information we ask for, because that's what we use to compare — we're always very driving on this. Before we even send an RFP, we spend all our time clarifying, driving as much precision as possible, and limiting the list of CROs as much as we can. I think one misconception, or one sense you get from a small biotech, or generally from a pharma sponsor, is: "yes, we're going to give you an RFP, you're involved" — but there's actually a currency that everyone who receives it has to pay. We see certain CROs that actually gatekeep at the front door — "no, we're not going to spend time on this, or this, or this" — and I love that, I really compliment it.

It's called the triage process.

Kieran @ Seuss+ (28:37)
So MedPace does that, PSI does that, and a few others too. And what I love about it is—

All the bigs do it — all the bigs have a triage process, as they should.

Kieran @ Seuss+ (28:47)
—and it gives us confidence that this is something they're going to take seriously, and that what they do with it will bring the right strategic thinking to the table to make those assumptions. Because, in essence, that process — we may not know everything exactly; even the number of CRF pages is largely determined together with the CRO, and it's a huge cost driver, because it rolls into so much else. Often it's way past the proposal phase, because we're then defining the CRF, and the pages, and the CRO is making assumptions based on what we expect compared to other comparable studies. But there's a seriousness and a respect that needs to be given to every vendor for the time they spend on proposals. Because when you're tailoring — and you said it yourself earlier, that one of the misconceptions is that pricing is standardized — the bid sheets and the pricing cost a lot of time to get right. What I'd love is for us to bring that same level of effort and time to what's given in a bid sheet, because when CRO vendors are working with us there's definitely real effort, and I appreciate that — but there's also accountability attached to it, later, when we're saying, "explain to me how this unit price changed in three months due to inflation — I'm not quite understanding that," or, "we kind of figured it might be" — no, no, no, this is one page, the page is the same, the page was the same three months ago as it is today, tell me again. And the amount of non-accountability, or what I call CYA — cover your — we spend like it wasn't my fault, and if I was involved—

—I'll just leave that.

Kieran @ Seuss+ (30:43)
—"let me show you all the documentation for why it's not my fault," or "the contract wasn't clear enough" — no, for goodness' sake, you told me this was going to cost this much, this is what's in my pocketbook, why would you think there's an unlimited source? I'd love it if the amount of respect, time, and effort it takes to put together a good bid grid at the beginning came with a responsibility to actually stick to it as much as possible. And I'm always wondering whether small biotechs are arguing for the wrong things. So when there's friction on the line, do you think sponsors are actually challenging bad forecasting? Because a lot of the time I hear, "it was more effort" — and when it's a unit price, I think, well, that's an interesting response — I have a unit, why am I paying for effort? It's one or the other. I understand it from a CRO perspective, I've worked there — but from a client's perspective, it's still the same number of units. Where do you think sponsors should be looking, in terms of what they're missing, what needs to be clarified more strictly upfront, in order to drive that accountability? Because no one loves these conversations — what I laughingly call the "boss fights" at the end, where all the executives huddle around going, "how much, who's taking what percentage of this accountability pie?" No one loves it, no one thinks it's fun.

A few thoughts on that. First, a brief comment on something you said earlier — I've pointed out to my CRO friends that the two CROs you mentioned with a tighter triage process just happen to be probably the two top-performing CROs financially over the past few years. I'll just leave it at that.

Kieran @ Seuss+ (32:56)
We'll leave it at that — but yeah, I did mention them for a reason.

There's profit in filtering the good from the not-so-good. Okay — but to your question about bad forecasting versus legitimate change: first, if you're a small biotech and you're having a tough time figuring that out, there are people out there — including the person you're speaking to now — who are experts, who've seen hundreds, probably thousands, of these situations, and can advise you. Don't do it alone if you feel like you can't get to the bottom of whether a large change order is valid or not. And I say that because part of why these things get so charged and emotional is that, especially for smaller biotechs, one or two studies could be the large majority of their corporate spend in a given year. So you should be charged up about reviewing a change order, because a change order is a change to your business — a change to your corporate budget. If you're publicly traded, it might have to be disclosed to your investors. It could cause you to raise dilutive capital, issue additional shares, or tank your stock price.

Kieran @ Seuss+ (34:17)
—or, more emotionally, fire your internal staff, because you can't carry it all.

Fire your internal staff, or be the founder who loves the business but no longer has majority control, and the board removes you. That's never a fun feeling. So these things matter — and for any CRO out there working primarily with small biotech, you have to understand the stakes are immense for your customers. That is something quite unique about this industry — for service providers, your customers are typically a group of companies with no revenue of their own, a hundred percent dependent on external financing, and the vast majority of what they spend is with companies like you. So any unexpected changes you make to their financials are far more impactful than a dollar change in the price of eggs is to an individual.

Going back to the beginning of our conversation — you have to take it seriously. On bad forecasting versus genuine change: I always encourage CROs to document and explain any change they're making, whether it's to the number of units on a given item or something else, because at the end of the day a CRO budget is the sum of the tasks, the units, the services being performed. If you're changing a unit from 10 units at $500 — $5,000 total — to 15 units, maybe the unit price stays the same, maybe it doesn't — you need to explain why the number of units changed, why the unit price changed, and that explains the total change. Same for a pass-through line item — why did the vendor budget change, why did the grants change. To this day, there's still a huge gap in how well, or whether at all, CROs actually describe what's in their change orders at the line-item level. It's not sufficient to say, "here's your change order, based on these three bullet points" — you need to provide line-item detail. That serves two purposes: one, it anticipates questions from the client side and helps avoid a lot of back-and-forth; and two, it helps you find your own errors — unanticipated changes you didn't mean to charge through to a sponsor. Like I said, the vast majority of CRO budgets are in Microsoft Excel, and these are files with errors baked in. There's a statistic that something like 99% of complex Excel workbooks have an error — it's absolutely true, I do this for a living.

Kieran @ Seuss+ (37:01)
Yes — and error-ridden invoices as well. No — we should say something about this, Joel — I think one of the things I see a definite difference in, with any vendor, but particularly CROs who are aware of this weakness or this challenge — if we think about it, okay, there's a change in scope, and when things happen the way they should, at least from a Seuss+ perspective, it's: "this is a change, something is causing a requirement to change," and it can be — we need to change a biomarker, or add a specific biomarker, or we actually need new patients, or it could be all kinds of things — it didn't go the way we expected, which is just clinical development, no one's done it in exactly this format before, so there are always going to need to be adaptable pieces. The problem is that the adapting happens entirely in hindsight — "yeah, we overspent on this, overspent on that, overspent on this," and since you're now making a change as a sponsor, we're going to add all of this other stuff too, because we've just measured that we're way behind. Reconciliation becomes a nightmare, because we're always picking things up in hindsight. The difference I see with actual partner vendors — be it partner CROs or vendor CROs — is that there's accountability, a "yep, there's a mistake there, how do we fix this" attitude, and they're checking for the mistakes before they go out, rather than, "I finally got it from the contracts manager, I'm just going to send it through" — leaving it to the sponsor to do the homework of catching the mistakes, catching the issues, catching the questions before they come back. It becomes a "get the client to do your work" kind of thing, and that creates so much frustration and overwhelm. At the end of the day, the system still financially works that way in a lot of cases — but I'm seeing change, which makes me happy.

Yeah, and on the sponsor side too, as far as the math goes—

Kieran @ Seuss+ (39:08)
—but you've got a way to go.

Yep. Now, in terms of bad forecasting versus things that just happen — an example a CRO was telling me about last week: they expected a large oncology trial to have a 50% rate of SAEs. Nobody knows for sure — you can't just look at completed trials from five years ago, different standards of care, different everything. Doesn't matter if the standard of care was the same, doesn't matter if it was a carbon-copy protocol, doesn't matter if the protocol was from last year — it's never going to be exactly the same. Different patients, different people, different sites on the trial. So that 50% ended up being 100%. When they told me about it, I said, just make sure you're charging the same rate per SAE as in the original contract — that's enough to justify a change order that moves the number of SAEs from 100 to 200. It becomes a different story if that's combined with some odd, unexpected change in the unit price per SAE that the sponsor isn't expecting. The SAE rate going from an estimated 50% to an actual 100% — that's usually not bad forecasting, everyone knows it's an estimate. It's when other parts of your pricing change, without a clear explanation, that you start to get into trouble.

Kieran @ Seuss+ (40:32)
We get a lack of trust, lack of transparency, lack of control. And even with your example — one of the things I love about reading your posts and articles is that I'm always learning something, because you're looking at exactly this interaction — you work in the space where your clients, the vendors, the CROs, are interacting financially with my clients. So whenever I'm reading or listening, I think, "this is how Joel sees it," and it gives me real insight. But one of the things I find hugely frustrating, and hugely important — from the sponsor's point of view, but it should also matter to the CRO — is being able to signal these changes and trends as early as possible, so we start talking about the fact that it actually is a hundred percent, or that we're tracking not to 50 but to 100. What does that mean? We're going to have to do a change order, using the same cost, but flag that this was unexpected. Or, on the flip side, where are we actually tracking under?

The real control a CRO has over what they're spending and doing — I get it, it's complex. I've sat in a phase three bid defense that covered three studies, and I was watching the entire CRO team on the call — twenty-three people, and that wasn't even the sponsor side. I remember thinking, "this is running a multimillion-dollar company, set up entirely on the basis of a contract, a proposal." The complexity is enormous, and it takes a lot to manage. One of the things I'd love, and hope for in the future, is the next step in the evolution from the CRO side: being more in control of the budgets, the expenditure, being able to give that transparency, and to stop saying "it's under control, you're the only ones who are strong," when it actually isn't — because if we're always working in hindsight, and we know we're going to end up fighting over money spent that we didn't know about, then let's avoid that. Let's be in control of what's going on, and actually say, "hey, there's something happening here that's going to impact us financially, let's talk about it." Not a bad thing at all.

But Joel, I want to wrap up, because otherwise we could talk for hours — and actually, I'm going to use this moment to extend an invitation for another conversation in the future, because this has been so good. I'd love to have more chats with you on the podcast, so hopefully you'd be willing to rejoin me down the line.

I would — and I'd like to use this moment to hype up your newsletter, which is one of the very, very few out there focused on what you do: how to interact with and manage CROs, but also other service providers across the industry. There's very little else like it. I've always felt there was a huge opportunity for someone to do this, and I love that you, in particular, are doing it. So anyone here who isn't signed up to your newsletter — make that the first thing you do after this podcast.

Kieran @ Seuss+ (43:45)
Look at us! I'm so happy and proud of the team we've built over the last 14 years. We were probably way too early, back in 2012 — people would say, "that sounds interesting, sounds valid," but we spent a lot of years just driving awareness. I'm really excited now about the appetite, the understanding, of why this matters. So Joel, thank you for that — I look forward to the future, and to keep learning from each other, and hope to have you back on the podcast someday.

Same here.

Kieran @ Seuss+ (44:20)
Thank you, everyone, for joining, and have a wonderful day. Bye.