Clinical Trial Contract Negotiation
A clinical trial contract negotiation is a process of dialogue between parties involved in a clinical trial in order to reach an agreement regarding the trial.3 min read
A clinical trial contract negotiation is a process of dialogue between parties involved in a clinical trial in order to reach an agreement on the terms of the trial. These terms include the roles, responsibilities, and conduct of each party to the agreement. Clinical trial agreements (CTAs) and confidential disclosure agreements (CDA) must include specific provisions to be valid and effective.
Negotiating a CDA
Before receiving the documents associated with a clinical trial, the principal investigator (PI) is typically asked to sign a CDA. This document indicates:
- The type of confidential information and how it should be handled.
- The length of time for which the PI must maintain confidentiality.
- That any existing CTA created will supersede the CDA.
Confidential information can not include data that:
- Information that is publicly available without a CDA breach.
- Information that has been disclosed by a third party entitled to do so.
- Information that is known prior to the CDA.
- Information that has been independently developed by the PI.
- Information that is legally required to be disclosed.
Negotiating a CTA
Once a draft has been created, it should be thoroughly reviewed by the contract specialist to make sure it meets all institutional and legal requirements. If any revisions are needed, they will be drafted and submitted to the sponsor. He or she can either accept revisions or provide alternate recommendations. This process continues until an agreement is reached. At this point, the finalized agreement is signed by all parties. The fully executed CTA is released to the PI and the internal review board (IRB). When contracts are pending, weekly status reports are sent to the team.
Common CTA issues that are negotiated and detailed in the final agreement include:
- Parties to the agreement, which should include only the sponsor and the institution. The PI works for the institution and is not a separate party to the CTA.
- Indemnification, which includes security for the financial reimbursement of damage or loss.
- Insurance coverage, which must be held by the sponsor and be an adequate policy to protect against institutional and subject losses that result from the study.
- The coverage of subject injuries that occur during the course of the study and the language that will be included in the informed consent form that must be signed by study participants.
- The right of the sponsors to review publications resulting from the study but not provide final approval. Typically, they have 30 days to remove confidential information from a publication and 60 days to file a patent application.
- Guidelines regarding ownership of intellectual property that results from the clinical trial. In general, the sponsor does not gain sole ownership of IP but shares ownership with the PI. The PI may also be the sole creator.
- The confidentiality obligations placed on both parties as well as the information that is considered confidential, the time period of confidentiality, and how information may be used.
- The termination procedures for the contract, including the ability of either party to cancel the agreement with reasonable notice. In this case, costs and uncancelled obligations must be reimbursed.
Negotiating CTAs is especially challenging for large studies that involve multiple countries. You must navigate each nation's laws, regulations, culture, language, and customs. It's important to retain an experienced contracts attorney to prevent substantial delay in the agreement and subsequently in the trial itself.
Best Practices and Pitfalls
Although CTAs are generally considered low-risk contracts, they do have the potential to influence a sponsor's costs. If an agreement is poorly drafted, it can expose a sponsor to legal risk and subsequent financial liabilities. Slow negotiations result in additional costs as well. Substantially delayed contracts can result in delayed marketing of a medical device or drug. CTAs are strongly regulated and subject to legalities and protocols. Parties are unlikely to agree to terms that could damage their ethical or scientific reputations.
When reimbursement clauses are improperly drafted, hospitals can claim costs that are beyond the scope of the agreement. Inadequate IP or confidentiality clauses can result in lost profit since staff may not comply with the confidentiality agreement and release information about study data and inventions that can erode the sponsor's competitive edge.
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