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Income distribution from NIHR CRN Industry Portfolio Studies


Published: 14 May 2019

Version: 2.0 - July 2021

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Executive Summary

This document provides good practice and contract support for the distribution of income generated through the conduct of NIHR CRN Portfolio commercial-contract clinical research within NHS Organisations in England to incentivise research teams and grow research capacity.

The NIHR CRN supports the healthcare research system which yields real benefits for the NHS, its patients, the Life Sciences Industry, and investigators. Ensuring its success is dependent on consistent, fair and balanced funding flow arrangements.

The principles which underpin this model, and could also apply to non-NIHR CRN Portfolio studies, are:

  1. Departments and individuals are recognised and incentivised for their contribution
  2. All relevant costs incurred are recovered from the Commercial Sponsor
  3. Commercial research affords opportunities to fund additional research or research related activities
  4. Income from commercial research can be distributed and carried over in line with the finance control procedures of individual NHS Organisations.
  5. Involvement of the Local CRN in NHS Organisations research planning
  6. Overly onerous itemisation and invoicing of study costs are avoided where possible.

The model proposed has been developed and refined from the observed good practice and feedback on the initial NIHR CRN Income Distribution Model released in April 2011.

This Contract Implementation Information is intended to prompt local discussions and consideration of an income management structure to support investigators, NHS service support departments and NIHR CRN research infrastructure.

cument is intended to prompt local discussions and consideration of an income management structure to support investigators, NHS service support departments and NIHR CRN research infrastructure.


The NIHR CRN supports the fair and balanced distribution of income from NIHR CRN Portfolio commercial research alongside the provision of incentives where possible.

The Department of Health and Social Care (DHSC) considers the support and delivery of industry funded and sponsored research to be a priority. Therefore, it is crucial that all stakeholders are incentivised to participate in industry sponsored research as reflected in this document.

Income from industry sponsored research on the NIHR CRN Portfolio has historically been managed in a wide variety of ways. While this document does not provide prescriptive guidance on how income should be distributed, it is expected that appropriate local systems are in place to allow funding flows from NIHR CRN Portfolio commercial research to support investigator incentives and the local infrastructure provided by Local CRNs.

This support document applies to NHS Organisations providing acute, mental health and tertiary services.


The NIHR CRN has specific objectives to support commercial research within the NHS, reflecting the importance and benefits of commercial research which include:

  • Access to novel compounds, new practices and procedures
  • Access to well-managed and monitored clinical trials for investigators and patients
  • Access to large-scale international clinical trials
  • Income generation for NHS Organisations
  • Wealth generation for the UK economy.

As part of the NHS England Standard Contract with NHS providers, the National Directive on Commercial Contract Research Studies sets out the requirements providers need to adhere to for commercial contract research, which includes the mandated use of the standard costing methodology (the NIHR interactive Costing Tool) from 1 October 2018. Since its launch in 2008, the interactive Costing Tool has provided companies and NHS Organisations with a single consistent approach to calculating commercial trial costs which is both clear and transparent for negotiating and establishing a price for research within the NHS.

The Income Distribution model described in this Contract Support Document is based on the NIHR CRN interactive Costing Tool cost methodology to support the redistribution of commercial contract income for NIHR CRN Portfolio studies.

The Interactive Costing Tool (iCT)

The new web-based interactive Costing Tool (iCT) provides a clear standard methodology to calculate consistent and transparent prices for the resource associated with delivering each commercial contract study to support the both the Life-Sciences Industry and the NHS to help minimise set-up time related to cost agreement.

The methodology identifies Agenda for Change rates for specific bands of NHS staff time representing the direct costs. Any indirect costs (including overheads) are covered by the indirect cost and capacity building elements. Prices for investigations and costs for departments supporting research are also included. These values are all localised with the National Tariff Market Force’s Factor (MFF) for the NHS Organisation in which the research takes place. This document outlines good practice for appropriate funding flow of these elements to participating departments and supports the establishment of suitable local arrangements.

Further information and support regarding the interactive Costing Tool and the development of its cost structure and values are available on the NIHR website.

Direct Costs – NHS Staff Time

National hourly rates are calculated for the agreed NHS staff bands using the highest salary in the relevant Agenda for Change band which are adjusted to incorporate the NHS employer contributions for National Insurance and Pension. This is a standardised representation of the direct cost to an employing NHS organisation and is used to calculate the template values for all procedures or tasks that are related to staff time.

Ideally these direct costs should be reimbursed to the department where the staff member is employed to compensate for the work performed.

For commercial studies involving University staff, an agreement should be in place between the relevant NHS Organisation and University to agree suitable distribution of the NHS Staff Time costs or the mechanism to be applied to accommodate alternative cost approaches, e.g. Application of Full Economic Costing (FEC), based on the NIHR CRN interactive Costing Tool (further information regarding the involvement of Universities in commercial.

Indirect Costs (Overheads)

A standard rate of 70%, added only to the NHS staff time direct costs, provides a representative value for the indirect costs when conducting a commercial trial which are not already covered by the direct costs (i.e. the real cost of carrying out a research activity). These indirect costs include physical aspects such as heating, lighting, building maintenance, and security; as well as the support functions required to deliver a clinical trial such as finance, general administration, human resources, information systems and corporate management (e.g. corporate oversight offered by the CEO, the finance director, R&D director and others to ensure efficiency and cost savings within the organisation/unit). This includes the corporate responsibility to drive research and find efficiencies to incentivise the individuals and services involved in delivering research. This element has a direct impact on the sustainability of the individual research activity and the research environment as a whole.

The distribution of the indirect cost element varies between NHS Organisations: some retain the full amount to cover their indirect costs, while others divide it between the NHS Organisation, the Investigator/Research team and the R&D Department in varying proportions. Being open, realistic and accountable about indirect costs and their distribution builds a trusting and mutually beneficial relationship between research partners and requires strong managerial and financial systems to deliver. Not all indirect costs are incurred within Directorates: some central charges may need to be made and the distribution model in place should recognise this.

Capacity Building

A capacity building rate of 20%, which is added to both direct staff time costs and investigations, should be considered as a ‘system optimisation’ which is designed to build sustainable research and innovation capacity to the benefit of all research partners. The successful utilisation of this element requires significant commitment and resources from all research partners.

This element is separate from the 70% indirect costs to enable it to be easily ring-fenced for maintaining, strengthening, and adapting and growing sustainable research capacity over the long-term. It is supported by the Health Service Guidelines (HSG) 97-32 ‘Responsibilities for meeting patient care costs associated with research and development in the NHS’, which acknowledges that NHS income derived from commercial contract studies is raised through NHS Income Generation powers for ‘improving the health service’.

Market Forces Factor

NHS England publish a Market Forces Factor tariff which provides an adjustment value to accommodate the unavoidable cost differences of providing healthcare across the country. In the interactive Costing Tool it is applied to localise the national rates for the location in which the research is being conducted.

For funding flow, this factor should be applied to each element of the cost methodology to provide a true reflection of the cost for that location (e.g. NHS staff time including MFF; indirect costs including MFF; and Capacity Building including MFF). Ideally, this should not be treated as a separate element but an integral part of each cost complement.

Per Patient Costs (including additional itemised costs)

The ‘per patient budget’ and the ‘additional itemised cost’ sections (the latter being where trial related costs that may not directly correlate with patient numbers or visits are included) applies all these aspects to two different cost calculations:

Procedures costs = NHS staff time (direct costs) + 70% indirect costs + 20% capacity building + MFF

Investigation costs = NHS direct costs for investigations¹ + 20% capacity building + MFF

Note that NHS direct costs for investigations are already inclusive of the NHS Organisation’s indirect costs and operating overhead.

Set-up and Other trial related costs

The pre-trial and ongoing related study costs are managed through the use of set-up management and close down fees and separate costs which are assigned to the relevant department. The interactive Costing Tool uses recommended fees based on national averages to provide a list of potentially applicable fees depending on the study requirements.

Recommended Model for Income Distribution from NIHR CRN Portfolio Commercial Studies

The recommended model was initially developed from good practice and has since been refined using implementation feedback. It is offered for consideration and to inform local funding flow decisions for NIHR CRN Portfolio commercial studies

The implementation of an income distribution model may take several forms:

  • A Local CRN wide model adopted by the host and all participating NHS Organisations
  • NHS Organisation specific models adapted as required to enable implementation within the host and participating NHS Organisations
  • A combination of a Local CRN wide model with specific NHS Organisations adapting the Local CRN model as required to enable implementation within that NHS Organisation.

Prior to any recommendations, an initial review of income distribution arrangements within the Local CRN Host organisation and participating organisations should be conducted to understand the current position. This review may identify a common approach which is already in place which can be expanded as required. If successful income distribution processes and operational arrangements already exist locally, these should be reviewed to ensure all relevant NIHR CRN recommended model principles of good practice are or can be appropriately accommodated through adaptation.

Recovery of NIHR CRN staff costs

There is no expectation that CRN funding used to support commercial contract research will be reimbursed to the LCRN central budget, and LCRN Managers should not seek to recover this funding

Local knowledge and judgement are key components in the decisions to apply the NIHR CRN staff cost recovery aspect of this model.

Distribution of the 70% indirect cost element added to direct costs in the Industry Costing Template

The wide reach of tasks covered by the 70% indirect costs component supports the splitting of this value to enable representative but practical distribution to the relevant parties involved in delivering the commercial research and may vary for each NHS organisation.

The NIHR CRN Income Distribution model recommended approach is:

  1. Half of the indirect cost element stays with the NHS Organisation to cover the indirect costs which enable the NHS Organisation to carry out the underlying operations of conducting research and contribute to any variability between the negotiated prices where required. Additionally, this percentage may be used to supplement or incentivise individual NHS Organisation departments, as per local agreements.
  2. Half of the indirect cost element is designated for the Principal Investigator and provides a method to incentivise participation in commercial research. This amount should be allocated to a commercial research cost centre or similar supervised research account within the NHS Organisation finance system, through which the Principal Investigator has a decision making capacity in the use of the funds in line with the NHS Organisation practices and finance control procedures.

The “equal split” approach is the recommended approach, however local arrangements may support different splits to be used and agreed locally to suit each NHS Organisation’s needs. These percentages should be developed and agreed based on the NHS Organisation’s methods for recovering indirect costs and the degree of efficiencies and savings that are realised to make available as incentives. The alternative split should be evidenced with supporting data from NIHR CRN Portfolio commercial studies to demonstrate the involvement or requirement for the proposed proportion of income. The implication of agreeing alternative approaches to the equal split recommended in this model should be considered for each NHS Organisation individually, e.g. the impact of reducing the percentage available to the Investigator and team. The following table shows examples of some alternative splits in use at NHS Organisations:

Examples of income distribution splits in use across the NHS

Split 1

  • 50% to PI
  • 25% to Clinical Division
  • 25% to R&D

Split 2

  • 65% to PI
  • 20% to add to staff costs
  • 15% to R&D

Split 3

  • 70% to PI
  • 30% to NHS Organisation

Split 4

  • 75% to PI
  • 25% to NHS Organisation

Split 5

  • 36% to PI
  • 32% to Clinical Division
  • 32% to R&D to fund commercial trial support costs

Split 6

  • 80% to the department
  • 20% to R&D

NOTE: The distribution split of the indirect cost element assumes that all direct staff costs and the cost of investigations are paid direct to the NHS Organisation as per the arrangements of the relevant model Clinical Agreement and where these costs are incurred by support departments or external providers; the costs are paid or passed through as per local agreement.

Distribution of the 20% Capacity Building Element within the Industry Costing Template

The previous version of this model recommended that the Capacity Building element was pooled from all Local CRN Partner Organisations and held under the control and management of the Local Network Board (removing instances where this element has been used as a surrogate for Network staff costs). In practice, this was not found to be applied and was instead retained by the NHS Organisation where the money was generated, which is reflected in this revised model.

The intended use of the Capacity Building element within the NHS organisation should be clearly documented to support and evidence its reinvestment in research in line with the overarching intention to ‘improve the health service’. It is recommended for the NHS Organisation to involve the Local CRN in defining the application of this element and ensure consideration and inclusion of the wider research community needs and national research ambitions.

Regardless of Local CRN involvement, it is best practice for NHS Organisations to have some form of expenditure plan for the capacity building element with supporting accounting processes to manage and evidence the distribution. This could be incorporated into existing reports or plans to minimise duplication. For example, the expenditure plan may include:

  • an aggregate expenditure for large-scale, long-term resource and infrastructure projects (e.g. funding additional staff posts, building resource in research constrained departments or services)
  • small-scale department or unit specific plans as part of an open local competition/application process (e.g. development of training programmes, part funding of department specific research posts, “buying-out” or reserving “blocks” of research time in departments and units)
  • a mixture of both.

In the event that consensus cannot be reached locally on the best use of Capacity Building income, the funds should be distributed back to the NHS Organisation service support departments and clinical units in the exact amounts that they each generated through their involvement in commercial contract studies.

Control of the funds

Feedback to date has shown an income distribution model is most effective when all income values are transparent to all departments involved through good local accounting allocations, clear distribution rule application and central NHS Organisation oversight (e.g. by the R&D Department). While income is distributed back to individual departments to support engagement in commercial research, the use of this income should be managed and monitored through spending plans which are reviewed and approved centrally by the NHS Organisation. This approach ensures an integrated approach to research development across the NHS Organisation. Consideration may be needed to distinguish NIHR CRN Portfolio studies from non-portfolio studies if using different approaches for income distribution.

Carryover of funds

In line any formal financial advice sought by the NHS organisation, local agreements should be used to manage the carryover of funds generated from commercial contract research, which may be key to raising the profile of research within the NHS Organisation.


Staff time

  • Staff time hourly rates distributed to the department where the staff member is employed to cover the cost of their involvement in the research

70% indirect costs

  • Half (or other agreed value) collected and collated for allocation to the NHS Organisation for indirect cost coverage i.e. the real costs of conducting research

  • Half (or other agreed value) collected and collated for allocation to the Principal Investigator managed account as financial incentive to reinvest in further research

20% capacity building

  • Collected, collated and reinvested by the NHS Organisation, in consultation with the Local Clinical Research Network, to build sustainable research and innovation capacity to the benefit of all research partners

Investigation Costs

Template value

  • Distributed to the service support department where the investigation was conducted to cover the cost of their involvement in research

20% capacity building

  • Collected, collated and reinvested by the NHS Organisation, in consultation with the Local Clinical Research Network, to build sustainable research and innovation capacity to the benefit of all research partners

Pharmacy Costs

Staff time

  • Staff time hourly rates distributed to the department where the staff member is employed to cover the cost of their involvement in the research

70% indirect costs

  • Collected and collated for allocation to the NHS Organisation Pharmacy for indirect cost coverage i.e. the real costs of conducting research within the Pharmacy

20% capacity building

  • Collected, collated and reinvested by the NHS Organisation, in consultation with the Local Clinical Research Network, to build sustainable research and innovation capacity to the benefit of all research partners

Set-up, Management and Close-down costs

Department/ task fee

  • Template value: Distributed to the department where the set-up task was performed/ costs incurred, e.g. R&D, service support department, Clinical Research Facility or Primary Care Patient Identification Centre to cover the cost of their involvement in the research

Practicalities of Implementation

The following information has been compiled from local network feedback regarding the initial model release in April 2011.

Communication – discussion is key to implementation

Who should be involved?
  • Getting the right people to discuss the guidance has been a big barrier to implementation and making the change happen, e.g. R&D staff may be receptive to the discussions, but Finance staff engagement may be needed to implement.

  • Involve team members from NHS Organisation management, service support departments and R&D Offices to support open discussions.

  • Involve the Speciality Leads, the Local CRN Executive Group and Board as well as the finance leads in the Trusts. The Executive team can help to endorse the model for application across the NHS Organisations.

  • Involve the investigator in discussions. Making investigators aware of the potential distribution principles can further support implementation and give support to the splitting of the indirect cost element, but care should be taken not to raise expectations and create conflict between the investigator and R&D.

When should we discuss?
  • Support the initiation of local discussions with this document as guidance rather than a prescriptive process.
  • Local discussions should also take place within the Local CRN to compare and consider a common income distribution model to present to all partner NHS Organisations.
  • Frequent discussions and ongoing monitoring can raise the priority.
  • Give member trusts time and freedom to consider how the model could work for them.
What should we consider?

Be prepared to invest significant effort and dialogue to encourage NHS Organisations to be transparent with their funding models and costs. Education regarding the Industry Costing Templates and principle of the tool may be useful introduction to the discussions. Relate the benefits of the model to the audience. Compare the model to previous cost or distribution approaches e.g. one NHS Organisation enables consultants to receive 80% of the total per patient fee.

Adaptation – flexibility as required

When could flexibility be needed?
  • Hospital structure may dictate requirement for adoption of a locally agreed model, e.g. Large Teaching Hospital vs a District General Hospital, the involvement of a Clinical Research Facility (CRF), or use of University staff and/or facilities.
  • Depending on the level of commercial income, which may vary over time, affecting the priority of the model within a particular NHS Organisation.
  • Different numbers of studies may affect the format of the most appropriate model.
  • Complexity or the size of the study may require bespoke arrangements to ensure principles are applied proportionally.
  • Different approaches may be needed to accommodate the variety in types of researchers in the NHS Organisation e.g. some NHS Organisations have experienced that their academic researchers prefer to have the money ring fenced, whilst their NHS researchers want the infrastructure (i.e. ward space, theatre space, nurse, admin).
How could this be incorporated?
  • Create and document the local version of the distribution model.
  • If an NHS Organisation wide model cannot be agreed, an alternative is to use a per study approach to generate a study specific document to detail the local distribution for each study, which is signed off by R&D and PI once the study contract is signed off.
What should we consider?
  • Recognition of other incentives is important, e.g. access to CRN infrastructure or gaining pre-selected site status.

Agreement – consensus approach

How could we reach an agreement?
  • The local CRN could initially gather information regarding the income distribution status of all member NHS organisations. This could be used by the Local CRN along with this Contract Support Document to work towards a single common solution, if possible, with agreed areas for potential adaptation.
  • Ask each NHS Organisation R&D Department to confirm whether they are broadly in agreement with the proposed income distribution model.
  • Consult with R&D departments, NHS Organisation management and investigators of each Partner NHS Organisation to determine if the proposed model can support or improve existing arrangements.
  • Consult each NHS Organisation to generate an individual policy for their NHS Organisation. This could be the single common solution proposed by the Local CRN, if possible, or a variation as necessary. Without adequate consultation, it is unlikely a single agreement will be reached.
  • Approaches may be NHS Organisation wide or on a per study basis depending on what works best for each NHS Organisation.
  • Acquire high level policy sign off, e.g. NHS Organisation board approval.
What support is available?
  • Utilise support of the Local CRN as necessary for a consistent approach.
  • The Local CRN may be able to provide contacts in areas where a model has been successfully implemented.
  • Understand which Investigators have ‘research’ included in their job plans or descriptions or where this appears in the Directorate’s business plan to help leverage support for agreeing a funding model.
What should we consider?
  • Reaching consensus locally on use of monies may be difficult and a default position should be discussed for when this occurs e.g. if no decision can be reached the funds are transferred to the R&D department.
  • Consideration of the NHS Organisations local processes for managing commercial income from NIHR CRN portfolio research should be assessed to ensure the model is workable from a practical aspect.
  • The benefits of involving the Local CRN in the decision making for spending of capacity building income.
  • Ensure all departments are able to function effectively to support research as this has been identified as a stumbling block when looking to implement a model.
  • Investigate if the NHS Organisation are invoicing quickly and accurately for commercial income due.
  • Investigate if commercial income can be clearly identified as a separate income line by the NHS Organisation.
  • The recovery of network costs is an integral part of a transparent model to avoid duplication of funds and consideration should be given to recover this where possible, or offset where deemed more appropriate.
  • Avoid upsetting any current arrangements that were effective, find a way to incorporate them instead.

Processes – embed the principles agreed

How can we embed income distribution?
  • Following local agreement, the model should be translated into real financial accounting and allocation through the NHS Organisation’s budget management, invoice and credit control systems.
  • Encouraging the NHS Organisation’s departments to work together rather than individually in silos e.g. avoiding departments invoicing sponsors individually.
  • Engaging R&D finance resource helps to build stability and find effective solutions.
  • Promote a balance between local recovery of costs while aiming to avoid onerous itemisation and invoicing of study costs.
  • Ensure the data systems to support tracking of income are available to the NHS Organisation.
  • Implement requirement for the NHS Organisation to report to their own Board and Local CRN with information regarding how the capacity building element has been invested locally or the plans for the expenditure.
  • While a standard format for the model clinical trial agreements financial appendix content is being developed nationally, encourage costs display within this to support of the income distribution model. This should be achieved with minimal impact on the Sponsor, i.e. an internal process.
  • Perform an analysis of the resources being used currently on all the commercial studies that are actively recruiting (from financial, operational and workforce development perspective) to determine their effectiveness. Understand their funding streams to help evidence further improvements, which could be made when supported by a robust income distribution model.
What benefit can we promote?
  • Recognition of the contribution each stakeholder makes to the health research system.
  • Improving research income management benefits all stakeholders.
  • One NHS Organisation puts all the Industry income into one pooled holding account where investigators can make applications for funds to support research they wish to carry out.
  • Reinforce the need to ensure that public funding is not subsidising commercial activity and how the model could support this.
Capacity building funds could be used to:
  • support clinicians write grants or support clinical study groups to increase studies led by local clinicians
  • support Patient, Public Involvement and Engagement (PPIE) members who are key to recruitment
  • support dedicated areas, e.g. ambulance service trust study used the capacity building to support the paramedics get involved in research
  • distribute by directorate e.g. imaging department hires mobile MRI units to avoid delays for the procedures or pharmacy use it to support increase in staffing levels.
What should we consider?
  • Reluctance or capacity restraints may create challenges when considering individual study costing and capacity planning.
  • Encouragement of self-sufficiency ie looking at commercial income to support future studies rather than the CRN initially which frees up funds to support for other research.
  • Support NHS Organisations to have a clear idea of their commercial income and ability to account for all elements of this by putting local finance teams in contact across the Local CRN or with other Local CRNs to understand how this could be achieved.
  • and moved the region away from reliance on CRN funding and enabled portfolio growth.

NIHR CRN Portfolio studies involving other institutions

University Staff

The NHS Organisation and the University should establish arrangements within their local Memorandum of Understanding or service level agreements to recover costs incurred through the involvement in commercial contract studies, which may also include honorary employment contracts where appropriate.

Universities should not recover additional indirect costs to those in the interactive Costing Tool where the research is taking place on NHS premises, for example applying a University overhead value on top of the costing template total.

Reconciling any discrepancies in staff time costs identified in the interactive Costing Tool, for example in line with Full Economic Costing, should be done in accordance with the local agreements referenced above between the NHS Organisation and the University. The University cost recovered should not exceed those agreed by the NHS Organisation with the Sponsor for the University staff.

Clinical Research Facilities and resources

CRFs and NIHR infrastructure are key assets in the clinical research environment. If any activity or review is led by the CRF then the money should flow through to these units and departments where and when the activity has occurred. This should be agreed locally between the CRF and the R&D departments during set-up and should not impact on the Sponsor discussions.

Individual cost centres may need to be created to allocate the funds accordingly and the requirements should be discussed with the CRF to ensure this is fit for purpose.

Feedback from an Income Distribution Survey through the UKCRF group in 2013 demonstrated the majority of respondents would be keen to allocate the costs to the CRF on a visit-by-visit basis, i.e. visit one takes place in out-patients clinic and visit one in the CRF. Consequently visit one costs go to outpatients department (for further distribution as per the NHS Organisation’s income distribution model for task splits) and visit two costs go to the CRF.

The survey also showed that the NHS Organisation’s Finance department, R&D Office or CRF staff are all involved in supporting the invoicing for commercial contract studies against the contract and thus all relevant staff should be involved in the implementation discussions to fully understand the processes already established, and how they can work together.

Consideration may also need to be given to CRFs using the CRF intensity tool, in particular how this can be used to support income distribution.


The money generated from industry sponsored studies is a valuable source of income for NHS Organisations. This income can be used to encourage key research stakeholders to develop capacity for new commercial, collaborative and/or non-commercial research within the NHS Organisation and support future income generation.

This document recommends key principles and good practice for the distribution of income from industry sponsored studies to support local agreement of a suitable approach for each NHS Organisation.

The model proposed in this Contract Support Document is based on piloted cases and feedback.

The NIHR CRN aims to ensure that systems to manage and distribute commercial income work towards and achieve the strategic research priorities outlined by the Department of Health and Social Care. A critical part of achieving these objectives will be making sure that investigators and service support departments in the research system are sufficiently incentivised and reimbursed.

Frequently asked questions

This document recommends key principles and good practice for the distribution of income from industry sponsored studies to support local agreement of a suitable approach for each NHS Organisation.

The model proposed in this Contract Support Document is based on piloted cases and feedback.

The NIHR CRN aims to ensure that systems to manage and distribute commercial income work towards and achieve the strategic research priorities outlined by the Department of Health and Social Care. A critical part of achieving these objectives will be making sure that investigators and service support departments in the research system are sufficiently incentivised and reimbursed.

Why shouldn’t the NHS Organisation keep all the indirect costs?

The indirect cost element package is set within the NIHR CRN interactive Costing Tool at a level which captures these costs incurred by the NHS Organisation, but also ensures a margin for flexible financial management. Best practice has shown that there is capacity within this to incentivise investigators if the NHS Organisation also retains the direct costs and delivers an efficient service.

Do NHS Organisations have to use the Industry Costing Template?

Use of the Industry Costing Template format for display and agreement of costs is recommended for NIHR CRN portfolio industry studies. It is acknowledged that a single template and recommended values cannot reflect the range of research studies and requirements without adjustments. As each NHS Organisation is an individual legal entity and therefore responsible for its own finances, the values within the template are subject to variation where deemed necessary and with supporting justification.

Can our NHS Organisation change the distribution percentages?

The distribution percentages utilised in this model can be changed to any equivalent of the 70% indirect costs that works for your local arrangement as demonstrated in the examples provided in this support document.

Is there an expectation that some of the money should go to the NIHR CRN for management of the Feasibility and Eligibility Process?

Payment for the management of NIHR CRN Feasibility and Eligibility Process is a separate consideration to the practices outlined in this document. The funding to the NIHR CRN for provision of such cross-cutting Study Support Services is provided through the funding allocation from the Department of Health and Social Care.



  • Chief Executive Officer


  • Clinical Research Facility


  • Clinical Research Network


  • Department of Health and Social Care


  • Full Economic Costing


  • Income and Expenditure


  • Independent Sector Healthcare Providers


  • Local Clinical Research Network


  • Market Forces Factor


  • National Health Service


  • National Institute for Health and Care Research


  • Principle Investigator


  • Patient, Public Involvement and Engagement


  • Research and Delivery

Appendix 1: Resources for local CRNs supporting income distribution within partner organisations

Directions to the following supporting resources:

CRN Study Support Service Effective Study Start-up process provides a local mechanism ensuring each researcher on each study has a prompt to discuss income management for the study at their site and has an opportunity to influence the distribution.

Locate contractual requirements in the Performance and Operating Framework LCRN Minimum Financial Controls document requirement (Document CSP007 under Financial Management) to report of values for aggregate commercial income, invoices raised and outstanding debits.

Version Control

  • Version number: 1.1
  • Effective from date: 10 May 2022

Change(s) from Version 1.0:

  • 5. Recommended Model for Income Distribution from NIHR CRN Portfolio Commercial Studies - Recovery of NIHR CRN staff costs

  • Updated to reflect that there is no expectation that CRN funding used to support commercial contract research will be reimbursed to the LCRN central budget.


Laura Bousfield

Phillip Good