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

Proper negotiations

Notwithstanding the above, 9% of the respondents of the survey indicated that their respective companies have been in a situation where damages were caused to their company or other parties involved in the clinical trial because the contents of the site agreement were not properly negotiated and over 6% indicated that their company has been involved in a legal suit or action in which the contents of the clinical trial agreement was considered crucial for settling the suit or claim. Although it is clear that serious issues arising from poorly drafted site agreements are rather an exception than the rule, the results of the survey indicate that these exceptions should not be neglected.

Inefficiencies in the site contracting process have an influence on the costs of a clinical trial as well. Insufficient training, poor communication skills, and unclear processes can all result in drawn out communications between the parties or a duplication of work. Too many hours spent on a task and unnecessary delays are the result.

Figure 1
As mentioned, sites experience the contract negotiations as a top delaying factor. From the survey it appears that industry representatives also perceive it as the most important cause of delay in the clinical trial process (Figure 1). Most of the respondents indicated that contract negotiations usually take more than six weeks, but a large part also indicated longer than 12 weeks, and some even more than four months. Whether the contract negotiation period actually causes a delay will ultimately depend on how long other clinical trial start-up activities are taking, since contract negotiations usually run in parallel. However, it clearly is the perception and experience of the parties involved that this part of the clinical trial process takes longer than it should.

So why doesn't this part of the clinical trial process get the attention it deserves? Maybe the required experience and skills—legal, operational, and organizational—are often underestimated. In order to ensure good quality, consistent, and quick site contract negotiations, it is important to put in place clear processes, good-quality documents, and well-trained and experienced staff with solid communication and organizational skills. Contract negotiations will always be a part of the process that most operational staff consider as inconvenient but necessary, and even the best contracts management team cannot prevent negotiations taking a certain amount of time. However, negotiation times can be reduced by following the right approach and acknowledging what is required to achieve this.

When looking at costs associated with delays of a clinical trial, it becomes even more urgent to consider whether your company is taking sufficient action to avoid such delays. Everybody working in the industry is aware of the enormous costs of developing a new drug. Costs for delay of a clinical drug trial are estimated to be on average $1.3 million per day.2

Being aware of this fact makes it easy to conclude that each day saved on contract negotiation time, may save a pharmaceutical or biotech company substantial amounts of money.

Reasons for delays

Country- and industry-specific knowledge. Delays often occur because of a lack of knowledge on applicable local laws and regulations, as indicated by the respondents of the survey. There are situations where lawyers insisted on trying to negotiate certain clauses in the agreement that were an exact copy of what was stated in the law or that would be overruled by imperative local legislation.

The different cultural backgrounds and local customs are also factors to be taken into consideration for the planning and approach of the negotiations: it is for instance helpful to know that in the months of July and August, it can be very difficult to progress negotiations in a majority of the countries of Southern Europe, because of the long vacation period.

Besides the local specifics, a contract manager should also be fully aware of the actual clinical trial process and the differing risks involved with different types of trials. Such awareness is necessary so that a proper risk assessment can be made and a pragmatic approach applied. If a certain situation is very unlikely to occur in a clinical trial, and even if it occurs, presents minor disadvantages, it is not necessary to insist on language that deals with the situation. Also, a contract for an observational trial, for instance, has a different risk level compared to a contract for an early phase clinical trial.

Figure 2
Resources. The respondents of the survey indicated that site agreements are usually dealt with by internal staff of the concerning company: internal lawyers, internal contract managers, the clinical department, but also administrative staff (Figure 2). Legal staff usually deal with the review of actual legal terms. Contract management, administrative staff, and sometimes members of the clinical department review agreements to the extent such relate to administrative changes or are based on pre-agreed fallback provisions, and are responsible for tracking and organizing the agreements. The clinical team is usually serving as the direct liaison with the hospital and the investigator.

Figure 3
It is clear that where site contracting is not managed properly it may result in unnecessary risks, inefficiencies, and delays. Therefore, it seems only logical to ensure that for this part of a clinical trial, sufficient, qualified staff, possessing the required skills and experience, are made available. This is apparently a challenge, since the respondents of the survey indicated it is not easy to find qualified staff (Figure 3). However, the workload in this area can fluctuate considerably, which makes it difficult to always have sufficient and trained staff available.

It is in that sense interesting that only a few respondents of the survey use external resources for dealing with site agreements, since it could offer flexibility and the required expertise when needed. It could be the case that parties have the idea that contracting for such external expertise is too expensive (the average hourly rate paid for this service seems to be between $200-$300). Granted, if the external party delivers a poor service—rigid lawyers that do not have the industry experience and do not share the same sense of urgency that is usually associated with these agreements—it can add substantially to the costs without providing the required benefits. However, if the external party can truly contribute to the improvement of the timelines, efficiencies in the process, and quality of the contracts, it can save money for the company.

Either way, qualified contract management resources are worth investing in, whether contracted or employed. The respondents of the survey seem to realize this; they opine that involvement of contract management specialists with a solution-oriented, pragmatic approach and with experience in the industry could improve the process.

Clear processes, training, and communication. Well written contract templates, logical processes, and consistent, good quality contract reviews are important if a company wishes to reduce risk, inefficiencies, and delays; also if a company desires some control over the documents it signs and has an interest in maintaining the image of a professional and reputable organization.

Therefore, besides the availability of quality resources, it is important to ensure that clear processes are established and proper contract management tools are available. A tracking program, fallback provisions, a "previously approved language" list, and review guidelines that clearly define the responsibilities of the different parties will contribute to the above described objectives, as also indicated by the respondents of the survey.

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