This is from an article that is linked towards the end of the "Failure to Pay Rent - Eviction" thread. Go read the full article, but here is an interesting highlight that references Romark's poor financial stability. Can this company even make payroll?
CEO of Romark, Marc Ayers, held a teleconference on April 8th, 2021 to discuss the lack of payment, for work rendered on a Romark COVID study, to study sites within the XXX study site network. There are many other study sites, working for Romark on this COVID study, but they were not invited to this teleconference. The main purpose of this teleconference was to reassure study sites they would be paid for their work on this COVID study. However, this has been an ongoing promise, by Romark, to ALL study sites working on this study for the last six months. It has been a continuous mantra of Romark executives and representatives, study sites will be paid within the next three to four weeks. Marc Ayers continued with the mantra and espoused this same time line to those attending the teleconference. One individual from a study site asked, “why is this time any different than all the other previous promises?” Marc Ayers response, “all the previous promises of payment were in good faith but external financing fell through and financing has now been secured from other sources and all XXX study sites will be made whole within three to four weeks’ time.” A follow up question was asked, will study sites not in the XXX site network be paid? Marc Ayers initially hesitated to respond but after a bit of stuttering, assured those in attendance that all study sites would be paid what they were owed.
Whether any sites get paid when the dust settles is almost beside the point. There are a few take away lessons from this situation that all Sites can implement if ever needed:
1.) Understand the study sponsor’s financial situation as best as you can: Thankfully, most study sponsors are publicly traded companies. This means that they have access to the public markets and do not typically rely on private investors to finance their clinical trial costs. In the 2008 Great Recession, there have been a few situations where many public biotech companies lost market cap, got delisted from the stock exchanges and went bankrupt. Although even during that time this was not a common occurrence, this did end up putting some Sites out of business. Sites should be extra cautious when dealing with a non-publicly traded study sponsor as trials are unbelievably expensive, and financial planning should not be an afterthought as it apparently was in the case of Romark. If unsure about the company’s financial stability, a simple Dun & Bradstreet check would suffice. Running Romark through this check would yield a resounding “high risk” status. Even a simple Google search would have revealed an article stating the company could not pay rent for one of it’s facilities and was in the process of getting evicted.
2.) When dealing with extraordinarily late payments from study sponsors, a tactic of last resort for Sites has often been to “hold data hostage”. Sponsors pay sites ultimately for one thing: study data. Holding this until payment is received is one way of expediting the process. Other slightly less dramatic options have popularly been to restrict CRA access to conduct interim monitoring visits until overdue payments have been made to Site. It is important to understand that these tactics should never come as a substitute for attempts at effective communication between the Site management and sponsor or CRO study team. Soft skills still should be the default, and aggressive strategies should rarely, if ever, be utilized.
CEO of Romark, Marc Ayers, held a teleconference on April 8th, 2021 to discuss the lack of payment, for work rendered on a Romark COVID study, to study sites within the XXX study site network. There are many other study sites, working for Romark on this COVID study, but they were not invited to this teleconference. The main purpose of this teleconference was to reassure study sites they would be paid for their work on this COVID study. However, this has been an ongoing promise, by Romark, to ALL study sites working on this study for the last six months. It has been a continuous mantra of Romark executives and representatives, study sites will be paid within the next three to four weeks. Marc Ayers continued with the mantra and espoused this same time line to those attending the teleconference. One individual from a study site asked, “why is this time any different than all the other previous promises?” Marc Ayers response, “all the previous promises of payment were in good faith but external financing fell through and financing has now been secured from other sources and all XXX study sites will be made whole within three to four weeks’ time.” A follow up question was asked, will study sites not in the XXX site network be paid? Marc Ayers initially hesitated to respond but after a bit of stuttering, assured those in attendance that all study sites would be paid what they were owed.
Whether any sites get paid when the dust settles is almost beside the point. There are a few take away lessons from this situation that all Sites can implement if ever needed:
1.) Understand the study sponsor’s financial situation as best as you can: Thankfully, most study sponsors are publicly traded companies. This means that they have access to the public markets and do not typically rely on private investors to finance their clinical trial costs. In the 2008 Great Recession, there have been a few situations where many public biotech companies lost market cap, got delisted from the stock exchanges and went bankrupt. Although even during that time this was not a common occurrence, this did end up putting some Sites out of business. Sites should be extra cautious when dealing with a non-publicly traded study sponsor as trials are unbelievably expensive, and financial planning should not be an afterthought as it apparently was in the case of Romark. If unsure about the company’s financial stability, a simple Dun & Bradstreet check would suffice. Running Romark through this check would yield a resounding “high risk” status. Even a simple Google search would have revealed an article stating the company could not pay rent for one of it’s facilities and was in the process of getting evicted.
2.) When dealing with extraordinarily late payments from study sponsors, a tactic of last resort for Sites has often been to “hold data hostage”. Sponsors pay sites ultimately for one thing: study data. Holding this until payment is received is one way of expediting the process. Other slightly less dramatic options have popularly been to restrict CRA access to conduct interim monitoring visits until overdue payments have been made to Site. It is important to understand that these tactics should never come as a substitute for attempts at effective communication between the Site management and sponsor or CRO study team. Soft skills still should be the default, and aggressive strategies should rarely, if ever, be utilized.