By Nicholas J. Diamond and Taylor McDowell
Clinical trials are an essential component of the research architecture for developing new drugs and devices. Research institutions and their clinical investigators (“Investigators”) play an important role in supporting drug and device manufacturers—the clinical trial sponsors (“Sponsors”)—in developing the data and evidence required to support regulatory submissions.
Clinical trial agreements (“CTAs”) govern the relationship between Investigators and Sponsors, together with other key documents, such as the study protocol. CTAs can vary widely. Investigators should carefully consider the following issues when negotiating CTAs with Sponsors.
1. CTA Templates
As a general matter, Sponsors often share a template CTA with Investigators. Sponsors may strongly prefer their template CTA, especially when conducting larger multi-site studies, in order to maintain uniformity. Investigators seeking to streamline processes may feel inclined to accept, without changes, the Sponsor’s template CTA. However, Investigators should always closely review, together with counsel, the template. Often, these templates will require several meaningful changes to sufficiently provide for an Investigator’s interests.
2. FDA Compliance
CTAs should provide for both Sponsor and Investigator obligations under federal law. Importantly, these obligations differ, to a degree, for investigational drug versus investigational device studies. Investigators should closely review their obligations for investigational drugs (21 C.F.R. Part 312) or investigational devices (21 C.F.R. Part 812), as applicable, and ensure alignment with the CTA. Similarly, Investigators should closely review Sponsor obligations and consider how best to incorporate compliance with those obligations in the CTA.
CTAs, especially for multi-site studies, often involve a contract research organization (“CRO”) that manages certain operational activities on behalf of the Sponsor. CROs will have separate agreements with Sponsors that govern their relationship. CROs may or may not be a party to the CTA between the Sponsor and Investigator. Investigators must understand which services a CRO is authorized to provide during the study. If the authorized services are not clearly articulated in the CTA, Investigators should request an appended delegation of authority letter that fully describes them. Alternatively, the CRO may execute the CTA with the Investigator, without the Sponsor as a party. In this instance, Investigators should likewise request an appended delegation of authority letter, as well as a letter of indemnification with the Sponsor to ensure privity of contract, in case a study subject is injured or third-party claim arises.
4. Intellectual Property
CTAs typically contain robust provisions regarding intellectual property (“IP”). A Sponsor virtually always wants to retain ownership of all IP developed or acquired during the study, regardless of the degree of the Investigator’s involvement in generating that IP. However, Investigators should consider whether to negotiate either joint or sole ownership of this IP. Apart from the strategic value of joint or sole ownership, non-profit research institutions, in particular, should work closely with counsel to understand any limitations regarding third party use of their facilities for commercial purposes, which may have tax or other implications.
CTAs should address key issues regarding publication of data obtained from conducting the study. Sponsors typically want to review any external use of the study data by the Investigator, which could include, among others, for submission of a manuscript to an academic journal or use in a presentation at an academic conference. Investigators should ensure that the CTA provides for a time period in which the Sponsor must complete its review and seek to reasonably limit that time period (e.g., 30 days). Investigators should be prepared to be flexible in their negotiations of publication provisions in the context of multi-site studies. Sponsors typically insist that the first publication must include the results of all study sites. However, Investigators should request the inclusion of language permitting individual publication, if no multi-site publication is made after a specified period of time (e.g., one year).
While CTAs typically include reciprocal indemnification provisions, Investigators should carefully review the scope of these provisions. Investigators should view indemnification provisions as a counterbalance to its risks in conducting the study, meaning that broad indemnification addressing the manufacture of the investigational drug or device, the pre-clinical work by the Sponsor, and the protocol design is advisable. Alternatively, some CTAs may provide indemnification for specific claims only, such as the injury or death of a study subject, requiring careful negotiation. Moreover, Sponsors typically insist on exceptions to their indemnification obligations, especially if the harm is caused by the Investigator’s negligence, willful misconduct, or deviation from the study’s protocol. Although Investigators may not want to negotiate such exceptions in principle, they should pay attention to the specific language used for these exceptions (e.g., “arising out of” versus “in connection with”) because of its effect on the scope of which claims fall under the exception.
This alert is not intended to provide legal advice, and no legal or business decision should be based on its contents. Please consult with your legal counsel for guidance.
Jackson Walker LLP regularly counsels investigators on negotiating CTAs, as well as provides general compliance counsel while conducting studies. Please reach out with any questions to Nick Diamond, (713) 752-4439; Taylor McDowell, (512) 236-2225; or Jed Morrison, (210) 978-7780.
Nicholas “Nick” Diamond is a regulatory lawyer with extensive, international experience counseling clients across the food, healthcare, life sciences, medical device, and technology sectors. While his practice primarily focuses on compliance counseling, he also has experience in global policy advocacy, commercial transactions, enforcement actions and investigations, and ethics and governance.
In the United States, Nick provides comprehensive counsel for entities and products regulated by the U.S. Food and Drug Administration (FDA). He has experience counseling clients on matters falling under FDA’s jurisdiction, such as: animal and veterinary products, including animal drugs and drug compounding; cosmetics; food (both human and animal), beverage, and dietary supplements; human pharmaceuticals and biotechnology products, spanning all therapeutic areas; medical devices (especially software-as-a-medical-device) and diagnostics; and vaccines. He also provides compliance counsel on federal laws impacting other healthcare-related entities, including clinical laboratories, clinical research institutions, digital health companies, and healthcare providers (including pharmacies).
Taylor McDowell is a regulatory and transactional attorney in the Healthcare and Corporate & Securities, Healthcare, and Investment Funds practice groups at Jackson Walker. In his healthcare practice, Taylor represents hospital districts, private hospitals, physicians and group practices, and healthcare startup companies in the role of outside general counsel in various healthcare transactional and regulatory compliance matters involving managed care contracts, physician recruitment agreements, physician employment agreements, and non-profit and 162.001(b) entity formation. Taylor has a particular interest in the emerging telehealth industry, and he regularly counsels clients in connection with the development of telemedicine platforms. He also advises clients on cybersecurity issues pertaining to HIPAA compliance and other applicable data security laws and regulations.