Clinical Trial Agreement Negotiations

There are opportunities to make the negotiation process more efficient and reduce timelines
Jun 01, 2012
By Applied Clinical Trials Editors
Volume 21, Issue 6

Managing clinical trial agreements with hospitals and investigators can be quite a challenge, especially when dealing with a large multi-country study. Many different parties are involved in the process and you have to deal with a variety of laws and regulations, languages, cultures, social and historical backgrounds, and different local or even regional customs.

Lack of knowledge and experience in the above-mentioned areas may result in a substantial delay in the contract management process and, as it appears, in the overall clinical trial process.

In surveys conducted by CenterWatch, investigational sites indicated that contract negotiations were considered to be among the top delaying factors when performing a clinical trial, both in Europe and the United States.1 Interestingly enough, when asked in the CenterWatch survey about solutions to avoid delays, none of the participating sites mentions improvement of the contract management process, which could be perceived as a "necessary evil" rather than an opportunity for process improvement and eventually for an increase of quality and reduction of costs.

Since there is not much data available on the general experience on and understanding of this topic from the clinical research industry (i.e., pharmaceutical companies, biotech companies, and contract research organizations), a survey was conducted by Salvius Legal and Applied Clinical Trials to gain insight into the industry.

Although budget negotiations are related to the contract negotiations with the sites, and thus fall in the category of potential delaying factors in the clinical research process, the focus of the survey and this article shall remain limited to the actual contract negotiation of the legal terms.

The survey

The survey was conducted by sending an e-mail to subscribers of Applied Clinical Trials inviting them to fill out the questionnaire online, which resulted in 534 completed questionnaires. The respondents consist of a well-balanced mix of representatives, mostly from the clinical departments of companies ranging from small to very large CROs, pharmaceutical, biotech, and other companies or organizations.

Half of the companies and organizations are located in a single country, the other half in more than one country; however, 65% of the respondents operate in multiple countries across the globe. The group of respondents consists overall of a very solid representation of parties in the industry dealing with clinical trial agreements at an international level.

Site contracting: a perspective

Given the current economic situation and cost developments in the industry, it seems only appropriate to start with a short reflection on the relationship between clinical trial agreements and costs. Clinical trial agreements potentially influence the costs of a sponsor of a clinical trial in several ways. First, a poorly drafted and/or negotiated agreement can create legal risk exposure, which in turn could result in unexpected financial liabilities. Second, inefficiencies in the negotiation process can result in unnecessary additional costs associated with extra man-hours. Third, and possibly most serious, troublesome contract negotiations may delay a clinical trial and, in effect, delay the marketing of the investigational drug, resulting in severe loss of profit for a sponsor.

Clinical trial agreements are generally considered low-risk agreements, presumably because parties operate in a strongly regulated environment and the framework and requirements regarding the performance of the clinical trial are for a large part set in the protocol. In addition, parties have a scientific and ethical reputation to uphold, and therefore are not very likely to agree to terms that may jeopardize such reputation.

However, site agreements in which reimbursement clauses were not properly drafted do exist. Consequently, hospitals were able to claim costs that are not a reasonable responsibility of the sponsor to reimburse. Additionally, and often even more damaging, poorly drafted agreements may result in inadequate confidentiality and intellectual property clauses. If, for instance, a hospital is under no obligation to ensure that its study staff comply with the confidentiality obligations in the agreement or transfer any rights to the study data and inventions potentially arising from the trial to the sponsor, a serious impact on the sponsor's competitive edge could result in a considerable loss of profit.

The above should be put into perspective: If there is an opportunity in the agreement to "sabotage" a clinical study, it does not mean that this will actually happen. Investigators and hospitals are usually not focused on finding openings in the agreement to the disadvantage of the sponsor. Also, if there is a breach or problem, the parties will usually be more interested in settling in good faith, in order to avoid negative publicity or the risk that future collaboration will be severely jeopardized.

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