DEVELOPING STRATEGIES FOR CONTRACT ADHERENCE

Outsourcing in Clinical Trials: Medical Devices Europe 201617 February 2016

Erik Vollebregtwww.axonadvocaten.nl

Overview• Goals of clinical cooperation• Setting up your cooperation model• Compliance issues• Contract law and regulatory issues• Drafting tips

Goals of clinical cooperation• ICH-GCP: sponsor can delegate duties and obligations partly or wholly-

responsibility always stays with sponsor• All GCP requirements that apply to a sponsor but have been delegated to the

CRO, also apply to the CRO

Best strategy by far

Align goals and interestsManufacturer CRO

(non) exclusivity

Avoid spill-over of know-how and confidential information to competitors; focus on customer project

Maximum flexibility in customers; synergies

Financing No pre-financing, pay based on results

Pre-finance as much as possible, payment regardless of results

Timing Milestones with fixed end data

Maintain flexibility to deal with contingencies

Liability Liable for direct and indirect damages

Cap liability, preferably at invoice of milestone value

Termination Termination for cause and termination assistance if project is likely to fail

Prevent switching if results look to be disappointing, termination assistance only against payment

Cooperation model (1)• Ad hoc or more structural

• single trail, multiple trials or joint research centre?

• IP ownership

• does CRO, hospital or researcher have strategic considerations re IP?

• Clinical trails involved

• initiated by hospital / doctor or by manufacturer?• Define sponsor and investigator roles

• Who manages multi-centre trials?

Cooperation model (2)• Services and payments

• What - if any - services will the hospital provide at what price?• Remuneration basis (project / hour / day / year)

• Services to be provided by hospital / CRO depend on how structural cooperation is

• Data capture and processing• Facilities and staff (administrative / research)• Comparative testing and feedback on prototypes• Training of manufacturer staff and external parties

Cooperation model (3)• Contract party

• hospital / doctor (usually contract research agreement with CRO)• CRO (Master services agreement with customer)• Both combined (e.g. UK CRO/NHS/Sponsor model)

• Goal of study

• gather clinical data for CE approval

• Authorities / Ethical Committee approval required

• post-marketing follow up study

Overview of typical CRO agreement

Preamble 15. Bonus / malus clause

1. Scope and qualification 16. Payment provisions

2. Clinical trail provisions 17. Secrecy

3. Changes to scope 18. Intellectual property

4. Sites 19. Entry into force and termination

5. Choice of trail physicians 20. Consequences of termination

6. Compensation of trail physicians 21. Notices

7. Inspection and destruction of documents

22. Assignment of rights and obligation

8. Ethical Committee approval and other approvals

23. Applicable law and forum

9. Side effects 24. Miscellaneous

10. Processing of data

11. Provision of test devices Annexes

12. Duties of care and liability Annex 1: Research protocol, research plan, milestones

13. Insurance Annex 2: Services description and financials

14. Compensation and costs Annex 3: Costs

Intellectual property• Define foreground and background IP

• What IP, if any, should the CRO own?• related to trial management

• What IP should the investigator own?• publications, non-device specific techniques

• What IP should the manufacturer own?• IP on clinical data, foreground IP on device

• Other obligations• Confidentiality and record keeping• Cooperation with IP filings (e.g. patent)

Compliance considerations (1)• Eucomed healthcare professionals guidelines - guiding principles

• Transparency • Documentation• Equivalence • Separation

• Agree compliance with Eucomed and other codes / law

Compliance considerations (2)• Local and foreign mandatory law

• Anti-bribery regulations• US law (generally applies to any company listed in the US or with

substance there)• Foreign Corrupt Practices Act• Sarbanes Oxley

• Consider any rules applicable to hospital and HCPs

• National ethics rules for HCPs

Compliance considerations (3)• Relevant laws and standards

• ISO EN 14155 - medical devices clinical investigation (currently revised for post-market studies) and ICH GCP

• (European Commission is working on MEDDEV)

• National law on clinical investigation• insurance obligations / liability• informed consent

Compliance considerations (4)

• Personal data

• The more patient data is processed digitally and internationally, the more important this is

• Safe Harbor is invalidated for the moment, while many CROs rely on it

• Negotiation of data processor arrangement with customer

• Division of responsibilities regarding obtaining consent etc.

Compliance considerations (5)

• General Data Protection Regulation imminent

• Data protection on steroids

• Nearly finalized

• Will enter into force in 2017

• Will impact severely on collecting and processing of personal data concerning health in the EU and international transfers

16

GDPR: threatening healthcare

Structure of typical agreement• Preamble

• State objectives of parties

• Scope and cost of services (elaborate in detailed annex)

• Describe type of agreement and end result (good faith effort or certain number of CRFs / finalisation of trail?)

• Describe division of responsibilities - who does what?

Structure of typical agreement• (non) exclusivity

• Define field / procedure / product group in case of exclusivity

• Compliance paragraph (FCPA, Eucomed issues)

• Link compliance to termination and damages

• Anti-TUPE clause

• To avoid impression of activities being transferred

Structure of typical agreement• Milestones

• Link milestones to consequences

• payment / fine• termination

• Define milestones sufficiently clear

• date, inclusion of first patients, certain number of CRFs, last patient out

• Make sure only one of the parties has the final word about attainment of milestone

Structure of typical agreement• Influence on CRO personnel

• ‘Key man clause’• for essential persons

• ‘Kick out clause’• for persons the sponsor wants to get rid of

• Influence on choice of centres and centre investigators

• CRO decides or sponsor decides?

Structure of typical agreement• Intellectual property provision

• Watch out with local (mandatory) law on IP and employees / university staff / hospital staff

• Assignment of IP conditional upon payment?• Include obligation to document know-how• In case certain IP stays with hospital / CRO, use background /

foreground model

Structure of typical agreement • Confidentiality / security

• Make sure confidentiality applies to all persons involved • Post-termination:

• Obligation to keep confidential until value of information is nil, or

• Obligation to erase / destroy information after termination• Make the other party takes security seriously

• Require e.g. encryption and password protection of any USB device

• Chinese walls with other site systems or other clients’ information

Structure of typical agreement• Publications

• Very important for hospital / doctors• Tricky for manufacturer : novelty destroying acts with respect to patent

applications• CRO may be indifferent either way• Manage degree of manufacturer control on final publication taking into

account (possible) rules on manufacturer influence and delays

Structure of typical agreement• Assignment / involvement of third parties

• Only with consent• Only if third party assumes the same obligations vis-à-vis manufacturer

• Duration, evaluation clause and options

• Fixed period or unlimited period?• Evaluation clause can provide escape in case of disappointing results• Include option for further research

Structure of typical agreement• Liability

• CRO will always want to cap• invoiced amount, insured amount

• Under most laws, CRO is liable for subcontractors• include specific indemnification for clarity

• Exclusion of gross negligence and intent generally not possible• Check with legal - very national law specific problems

Structure of typical agreement• Termination regime

• What constitutes a default? Remedy period?• Think about consequences of termination

• return of documentation and devices• termination assistance by CRO• survival of clauses

• No termination for convenience on the part of the CRO• Termination for convenience with severance payment for

manufacturer?• Avoid fixed duration agreements

Structure of typical agreement• Termination regime (2)

• Right for CRO to terminate if study goal cannot be met (e.g. number of patients)

• Right for sponsor to continue with study with already included patients• Termination possibility in case of

• bankruptcy, receivership• acquisition / change of control

Structure of typical agreement• Vigilance paragraph

• Hospital reports all incidents and other significant occurrences• Governing law / forum / dispute resolution mechanism• Contract party / consent of hospital or clinic

• HCP him-/herself as contract counterparty should be the exception• Have hospital co-sign agreement

Structure of typical agreement• Annexes

• Scope of work / services

• Research plan / schedule of work• Milestones

• Payments• Hourly rates / per diem / per (half) year / milestone payments

/ projects• Facilities / staff / visiting HCPs• Form or other tool to track costs• Royalty payments (if any)• Compensation model in case of early termination

Structure of typical agreement• Annexes (cntd.)

• Assets contributed (e.g. research devices)

• Clinical trial annex• Protocol• Investigator brochure• Division of responsibilities• Manage patient privacy and personal data

• Adverse events reporting form• Preferably containing all information requested on the Report

Form Manufacturer’s Incident Report Medical Devices Vigilance System (MEDDEV 2.12/1 rev 6)

Structure of typical agreement• Annexes (cntd.)

• Timelines

• Reports• Per milestone• Per time period• Financials• Assets (if e.g. devices or consumables are supplied)

www.axonlawyers.com

THANKS FOR YOUR ATTENTIONErik VollebregtAxon LawyersPiet Heinkade 1831019 HC AmsterdamT +31 88 650 6500M +31 6 47 180 683

E erik.vollebregt@axonlawyers.com @meddevlegalB http://medicaldeviceslegal.com

READ MY BLOG:http://medicaldeviceslegal.com