When you sign a CRO contract, most of the negotiation goes into the service fees: rates, units and the cost of monitoring. The pass-through costs get a line in the budget and an estimate. Then the trial starts, and that line turns out to be a third of the bill.
That share isn’t a guess. On ICON’s Q3 2026 earnings call, the CFO put pass-throughs “somewhere in the low thirties” percent of revenue (ICON Q3 2026 call). At Medpace, reimbursed out-of-pocket expenses were $287.3 million of $716.0 million revenue in the same quarter, or 40% (Medpace Q3 2026 results). At IQVIA the pass-through part grew faster than the rest: R&D Solutions revenue rose 8.7% in the quarter, but only 6.8% without reimbursed expenses (IQVIA Q3 2026 results).
This article explains why pass-throughs escape the control the rest of the budget gets, which categories to watch and what evidence to ask your CRO for. At the end you get a grader that scores any CRO proposal on transparency.
What counts as a pass-through cost
Pass-through costs are costs the CRO pays on your behalf and bills on, without a margin or with a small handling fee. They are your costs, routed through the CRO’s books. The usual categories and the evidence to ask for:
Category and what drives the cost | Ask for |
|---|---|
Investigator grants and site fees Visits per patient, procedures, screen failures, country | Site budgets per site, payments earned vs paid, holdbacks |
Central and specialty labs Samples per visit, kit shipments, re-tests | The lab’s invoices with kit and sample counts |
Imaging and central reading Scans per patient, reads per timepoint | Read counts by timepoint vs plan |
Patient travel and stipends Visits, distance, reimbursement policy | Payments per patient visit and the policy per country |
IMP logistics and couriers Depots, shipments, temperature control | Shipment logs and vendor invoices |
Translations and printing Countries, languages, amendments | Word counts and quotes per document version |
Investigator meetings Attendees, venue, travel | Attendee list and final invoice |
Third-party technology such as IRT and ePRO Licenses, devices, study duration | Vendor contract and invoices |
Together these lines make up a third or more of the bill, yet proposals often give them a fraction of the detail the service fees get.
Why pass-throughs escape control
They arrive late. Invoices from sites, labs and vendors reach the CRO first. The CRO checks and collects them and bills you afterwards, so a visit done in March can reach your invoice months later. Until it does, your budget shows money as unspent that is already committed. One finance leader traces surprise bills from CROs to a lack of clarity and proactive planning (BioXconomy, Apr 2026).
They rest on estimates. Much of CRO accounting runs on estimates of progress. ICON’s restatement shows how far those can drift. The company overstated revenue by $65 million in 2023 and $93 million in 2024, through errors tied to cost-to-complete estimates and manual adjustments (Yahoo Finance, Jun 2026). The errors were mainly about timing, and they were not about pass-throughs specifically. But if a CRO’s own estimates can drift that far, a sponsor budget negotiated against them can too (Clinical Trial Vanguard, Jun 2026). Pass-throughs are where estimates are hardest to check from the outside.
They move. ICON raised its 2026 revenue guidance by about $150 million at the midpoint, reflecting higher pass-through activity than it had assumed. Its CEO summed it up on the same call: “Passthrough volatility is what it is” (ICON Q3 2026 call). If pass-throughs can move a CRO’s annual guidance, they can move your quarterly cash plan.
Nobody owns them. For the CRO, pass-throughs are revenue with almost no margin, by Bourne Partners’ estimate (Bourne Partners, Oct 2025). That cuts both ways. There is little reason to inflate them, and little reason to spend scarce project time controlling them. Even investors don’t get a consistent number, because listed CROs don’t disclose pass-throughs in a comparable way. So the job of control falls to you.
The reconciliation rhythm that works
Many contracts reconcile pass-throughs at study close. By then the money is spent and the questions are hard to answer. A better rhythm has four beats:
Monthly: accrue by activity. Estimate each category from the activity data (visits, samples, scans, shipments) times the unit cost, not from the invoices that happened to arrive. Compare with invoices as they come in.
Quarterly: true up with the CRO. Earned, invoiced and paid per category, with every open item listed and an owner on each side.
At every amendment: re-forecast first. Model which pass-throughs the amendment changes before you sign the change order, not after.
At close-out: confirm, don’t discover. If the quarterly true-ups worked, the final reconciliation holds no surprises.
What to ask for in a CRO proposal
Twelve yes-or-no questions show how transparent a proposal is:
Are pass-through costs shown separately from service fees?
Does each pass-through category have a unit basis, such as cost per visit, sample, scan or shipment?
Are the assumptions behind each unit count stated (patients, visits, countries, screen-failure rate)?
Are handling fees on pass-throughs stated, and at what percentage?
Is there a defined trigger for when a change in pass-throughs needs a change order?
Will the CRO report pass-through activity monthly, in units per category?
Is the invoicing frequency defined, with a maximum lag for third-party costs?
Are investigator payments reported per site as earned, paid and held back?
Is the percent-complete method for the service fees disclosed?
Is there a quarterly reconciliation with a named owner on each side?
Are vendor contracts and invoices for the major categories available on request?
Is it defined what happens to unspent pass-through funds and advances at close-out?
Score one point for each yes. 10 to 12 means a transparent proposal. 6 to 9 means you negotiate the gaps before signing. 5 or fewer means you should expect surprises.
Question five matters more than it looks. Fixed-price contracts transfer risk to the CRO, which can lead to padded prices or to change orders that recover costs nobody planned for (Applied Clinical Trials, Jun 2026). A clear trigger keeps that conversation factual.
Transparency is a selling point for CROs
None of this is an accusation. Most CROs manage pass-throughs carefully, and many of these questions come up in good bid defences anyway. A CRO that can answer yes to most of them has an argument that a lower price can’t beat: the sponsor’s finance team can plan with its numbers. For sponsors without a procurement department, that makes a CRO easier to choose and easier to keep.
How Trialytix helps
In Trialytix, CRO fees and external costs such as labs, imaging and patient travel sit in the same clinical trial budget, with their planned dates. CRO and vendor invoices are tracked against that plan. So your monthly accrual starts from the plan and the activity, not from whichever invoice arrived last. And when an amendment changes the visit schedule, you model the new budget as a new version before you sign the change order. See invoice tracking in the Sponsor Suite
