A Whitepaper by Nancy J Stark
Clinical trial agreements (CTAs) are the legally binding agreements between a sponsor and an institution (site) as to how certain business and property rights will be dealt with between the parties. These agreements are separate from Investigator Agreements and Confidentiality Agreements and are not regulated by FDA or disclosable to FDA. CTAs are important because they allocate risk, responsibility, financial support, and obligations of the parties; and they protect the rights of the parties.
Usually the sponsor presents an initial draft of the agreement to the institution, and then each of the terms and conditions are negotiated by the party's attorneys. Agreements follow a typical format of: preamble, acknowledgements and responsibilities, term and termination, payment and reimbursement of costs, HIPAA and patient privacy, publication, data ownership and use, intellectual property, indemnification and insurance, subject injury, best efforts, waiver of consequential damages, miscellaneous (export controls, governing law, and dispute resolution/arbitration/mediatio, exhibits), and signatories. (1. Perry-Northwestern University)
The most common problem areas are publication, data ownership and use, intellectual property, indemnification and insurance, subject injury, best efforts, and signatories. In the text below I explore these problems and solutions suggested through various model CTA templates. (2. Weill Medical College of Cornell.) (3. UIDP) (4. MAGI) (5. Arizona template) (6. IOM template)
Universities, teaching hospitals, and other not-for-profit institutions are grounded in the principles of academic freedom and the discovery and sharing of information. Furthermore, in order to maintain a tax-exempt status, they must fulfill certain duties such as education of students, creating generalizable knowledge, or dissemination of knowledge. (7. Guiding Principles)
Sponsors, manufacturers, and other for-profit firms have commitments grounded in creating value for their shareholders, providing useful goods and services, and expanding the state of the art. They contribute to society by developing and providing new technologies to ease the medical conditions of mankind, but they must be profitable to survive.
Since neither party can live without the other, the challenge is to find contractual language that supports the mission of each within the constraints that limit them.
The publication clause outlines who can publish what, and when. The clause is important to industry because they need to hold early developmental information confidential until the design of the device has matured into a functional, manufacturable, and marketable configuration. Revealing information too early, or revealing the wrong information, may allow your competitors to learn from your mistakes. Sponsors are also concerned about the accuracy of reporting, both of data and of product descriptions. And for multi-center studies, solutions are needed that allow for a complete manuscript incorporating results from all sites, and which pre-determines the order of authors.
Conversely, a non-profit institution needs to publish new knowledge. Publication creates recognition of the investigator's efforts, allows results to be used in future trials, enhances the site's prominence, contributes to public knowledge, and allows graduate students to use the data for their theses.
A typical industry draft clause might say, in essence, "Institution shall submit to Sponsor a copy of any proposed publication at least 90 days prior to submission for review and approval."
Compromise language suggested by the University of Arizona is, "Sponsor has no objection to publication by Institution of the results of the Study based on information collected or generated by Institution, whether or not the results are favorable to Sponsor. However, to ensure against inadvertent disclosure of Confidential Information or unprotected Inventions, Institution will provide Sponsor the opportunity to review any proposed publication or other type of disclosure at least thirty (30) days before it is submitted for publication or otherwise disclosed. If any patent action is required to protect Inventions, Institution agrees to delay the disclosure for a period not to exceed ninety (90) days from the date Institution initially submitted the proposed publication, or other type of disclosure, to Sponsor for review. Institution will, on request, remove any Confidential Information before disclosure.
If Study is part of a multi-center study, Institution agrees that the first publication is to be a joint publication covering all centers. However, if a joint manuscript has not been submitted for publication within twelve (12) months of completion or termination of Study at all participating sites, Institution is free to publish its results separately…." (5. Arizona template)
[G] Data ownership and use
Data ownership and use is another common sticking point. Sponsors may argue that they "own" the data because they have paid for it, but Institutions counter that they cannot retain their non-profit status if they engage in contract research or "work-for-hire". Institutions want to protect the right to use study data for non-commercial, research, development, and educational, purposes.
A typical industry draft clause might read, "All study data shall be the sole and exclusive property of Sponsor."
MAGI offers this compromise clause, "Site owns all Source Documents. Sponsor owns all Sponsor Data. Site owns all Specimens and Genetic Data, and grants Sponsor access to such property only for purposes of the Study. Sponsor and Site may freely use their own data subject to Subject consent and IRB approval. In addition, Site may freely use Sponsor Data after first multicenter Publication is published or Sponsor waives right to a multicenter Publication. Sponsor has no right to Site’s pre-existing biological samples, genomic database, or other proprietary database." Sponsor Data is defined as, "Study lab test results, CRFs and other reports completed by Site or Investigator per the Protocol, Agreement or other written instruction by Sponsor, excluding Source Documents and Genetic Data. Specifically excludes results derived from analysis of data." (4. MAGI)
ISO 14155 "Clinical investigation of medical devices in human subjects—
good clinical practice" (2011)
What makes this ISO 14155 training so special? The author served on the Editing Committee of Working Group 4, the inner circle of individuals who put finger-to-keyboard and wrote the standard. In this three-hour recorded training Dr. Stark discusses the standard in a topic-by-topic format; identifying what is new, what were the controversies, and what was the Working Group's thinking in adopting the language it did. It is this background information that helps you apply the standard appropriately to your study.
You can buy this newly released training on CD on our website firstname.lastname@example.org or by phoning 773-489-5706. Private training from Dr. Stark is also available.
[H] Intellectual property
Intellectual property is a little different than data ownership, in that it covers who has the right to obtain a patent, or own an invention, development, or discovery.
A typical industry draft clause may read, "Any inventions made as a result of Institution's performance of this Agreement will be disclosed promptly to Sponsor and shall be deemed the property of Sponsor." But again, the sale of information is at cross-purposes with the non-profit mission of the institution.
The University of Arizona offers this compromise clause, "Inventorship of any inventions, developments, or discoveries, whether patentable or not (collectively referred to as "Intellectual Property"), resulting from the performance of the Study, shall be allocated according to U.S. Patent law (Title 35 U.S. Code) in effect at the time the Intellectual Property was created…." (5. Arizona template)
[I] Indemnification and insurance
Indemnification is language whereby one party agrees to protect another against an anticipated loss or damage; insurance is a policy through a third-party which guarantees payment to cover the costs of loss or damage. Although FDA does not require sponsors to carry insurance to cover the possibility of loss or damage to the Institution resulting from the study, most Institutions will have insurance requirements for sponsor-initiated clinical trials. In the event a sponsor in unable to meet the insurance requirement, the study will probably undergo a clinical risk assessment via which the institution attempts to assess the likelihood of loss or damage.
A typical industry draft clause might read, "Sponsor shall indemnify and hold harmless Institution from any damages and liability that are caused by Sponsor's negligence."
A compromise clause might read, "Sponsor shall indemnify, defend, and hold harmless Institution from any damages and liability that arise out of the proper administration of the Study device, Study-required procedures, Sponsor's use of the results, or Sponsor's negligence or breach of the Agreement."
[J] Subject injury
While indemnification and insurance have to do with loss and damage to the Institution, the issue of subject injury has to do with loss and damage to the subject. Sponsors readily agree to provide subject injury coverage if it is determined the injury is related to the investigational device, but who gets to make the determination? Good clinical practice tells us the principal investigator makes this determination.
Some sponsors like to add a clause that they will not pay for injuries until insurance is billed and denied. But billing third-party payors, whether Medicare or private insurance, should be at the Institution's discretion. If the injury is related to the medical device there should be no billing.
Some sponsors are concerned with injuries that are, in fact, attributable to the underlying illness. A solution is to qualify underlying illness by saying, "to the natural progression of the underlying illness."
Some sponsors try to limit their liability if the injury is attributable to the negligence of the study subject or the failure of the study subject to follow the instructions of the Principal Investigator. But such thinking is contrary to current ethical standards. Subjects are donating the use and study of their bodies for other people's gain; there may be little or no benefit to them beyond the satisfaction of contributing to the world's knowledge. Either the institution, sponsor, or third-party payors should bear the cost of their injury regardless of it origins.
IOM's suggested language is, "The Sponsor shall reimburse actual and reasonable medical expenses incurred in treating any injury or illness to a Study Subject that is directly related to the administration of the Investigational device or the proper performance of any other procedure, each in accordance with the Protocol and the Sponsor’s written instructions to the Institution (or to the extent that the Sponsor’s written instructions conflict with the Protocol, the Sponsor’s written instructions to the Institution only). The Sponsor is not required under this Section to provide compensation for (a) other injury- or illness-related costs (such as lost wages), (b) medical expenses that are paid for by a third party (provided that neither the Institution nor the Study Subject shall be obligated to seek reimbursement from a third party insurer), (c) medical expenses that are incurred as the result of a violation of the Protocol or other misconduct or negligence, in each case by any agent or employee of the Institution (including the Study Staff), or (d) medical expenses for injury or illness unrelated to the Investigational Device and unrelated to the proper performance of any other procedure required by the Protocol or Sponsor’s written instructions to the Institution." (6. IOM template)
Arizona offers a simpler suggestion, "Should a subject suffer any adverse effect caused by the Study drug/device/biologic, the Study procedures, or laboratory work required by the Protocol, Sponsor will pay for all medical and hospital costs required for the diagnosis and treatment of such adverse effect." (5. Arizona template)
[K] Best efforts
Consultants (such as Clinical Device Group) know that research projects are dynamic. No wise Institution, consultant, or research contractor should agree to work under time, cost, and performance constraints. Deadlines and results cannot be guaranteed. Furthermore, work product is constrained by the laws and standards of the United States.
One might think the Sponsor is left defenseless, but this is not the case. Institutions will agree to a "best efforts" clause, a contractual provision which requires the institution to use its highest efforts to perform its obligations and to maximize the benefits to be received by the sponsor. Sponsor's are obligated to terminate a site's participation in a study if non-compliances to protocol or regulations are discovered. And sponsors always have the right to terminate a study for business or ethical reasons. Cost overruns, project delays, or non-performance (of investigator or device) are all legitimate business or ethical reasons for terminating a study or an institution's participation in a study.
Industry sponsors sometimes don't realize the employee-employer relationship between investigators and investigative sites and they propose to have the investigator sign the CTA. They're also concerned about the performance of the investigator because of their financial investment in the trial.
A typical industry suggestion for the signatory clause is, "This Agreement is entered into by and among Sponsor, Investigative Site, and Principal Investigator." But if you think about it, an investigator—as an employee of the institution—has no legal authorization to sign the CTA.
A compromise clause is, "This Agreement is entered into by and between Sponsor and Investigative Site. The Principal Investigator shall conduct the trial as an employee of the institution and not as a party to this Agreement." Then the Principal Investigator is asked to sign the Agreement to indicate their understanding and intention to comply.
Sponsors and Institutions both have a vested interest in performing clinical research, and each party has much to gain from the process. By thinking through the issues and appreciating the needs of the other party, it is possible to come to an Agreement that is fair, balanced, and meets everyone's needs.
1. My thanks to Sean Perry, JD, Sr. Contract and Grant Officer, Office for Sponsored Research, Northwestern University, Chicago for his insights into this topic.
2. The format is taken from Clinical Trial Agreements, Weill Medical College of Cornell University, Office of Clinical Trials Administration. Contact CDG for link.
3. University-Industry Demonstration Partnership (UIDP), National Academy of Sciences, https://sites.nationalacademies.org/PGA/uidp/PGA_060368.
4. MAGI Model Clinical Trial Agreement, https://www.magiworld.org/standards/.
5. Template for Clinical Trial Agreement, University of Arizona Board of Regents, https://www.orca.arizona.edu/ctas.html.
6. Template for Clinical Trial Agreements, Developed by Jim Snipes, Covington & Burling LLP for the Institute of Medicine, April 2009. Contact CDG for pdf copy.
7. Guiding Principles for University-Industry Endeavors, National Academy of Science and the National Council of University Research Administrators and the Industrial Research Institute, April 2006.
Nancy J Stark, PhD
President, Clinical Device Group Inc