Six prime areas for potential problems
Expert provides possible solutions to each
Standard pharmaceutical company contracts for clinical trials typically include some less than desirable details, which research and institutional administrators may overlook if they are unfamiliar with contract language, a national clinical trial contract expert says.
For instance, clinical trials usually are fixed price contracts, but the terminology that’s used in the contracts tends to be about cost reimbursement, says Michael Slocum, JD, president of Slocum & Boddie in Springfield, VA.
Why should that concern a research institution? Because the federal government does care about the wording of these contracts, since that’s what the government uses to make its case for fraud and abuse, he says.
Slocum outlines the six areas that pose the most problems for research institutions and what can be done about them:
1. Confidentiality: Pharmaceutical companies often leave it up to research institutions to adhere to state privacy laws and HIPAA, Slocum says.
"Usually, you can satisfy the drug company’s needs by getting the data de-identified or by using limited data sets," Slocum notes.
However, the clinical trial contract may include language that permits the pharmaceutical company to pick up every piece of data the clinical trials office develops, so it’s important that the contract be negotiated to provide for exceptions that are necessary for the research institution, he says.
For example, information should be made available in the event a patient/subject needs emergency medical care, Slocum says.
"A lot of drug company lawyers will agree to this once they understand what you’re talking about," he says. "Say you are giving subjects XYZ heart drug, and then one person is out on the highway and gets crunched by an 18-wheeler, ending up in someone else’s ER."
The patient or family or an ID bracelet lets the hospital’s physicians know the patient is involved in a clinical trial, so the ER doctor calls the clinical trial investigator to find out more about the patient’s medical history, Slocum says.
"The PI doctor can’t ask someone else’s lawyers at 2 a.m. for permission, and he needs to be able to provide whatever information the other doctor needs without worrying about whether it is confidential or not," he says. "So we want an exception for information that’s necessary for emergency medical care information."
Also, a research institution should seek an exception for information that is needed to properly defend itself legally, Slocum adds.
"A lot of drug company lawyers say, You can subpoena that,’" he says. "But we want to provide information to insurance underwriters and to law firms that might be the institution’s litigation firm or not, and we maybe even want to provide the information in a mediation situation to the opposite side so we can get out of having a claim from a patient."
And finally, a research institution might need to be able to bring up that information in its own defense if the drug company sues the research institution, Slocum says.
2. Publication rights: Research administrators should not assume that the contract will permit them to publish the study’s findings or publish the findings regardless of whether they support the sponsor’s interests, he says.
"Some naïve biotech companies use the same clause [prohibiting publication] they might use with a for-profit testing lab, and it’s absolutely not acceptable," Slocum explains. "Everyone needs to understand that no matter how small your hospital is, you should take time to negotiate."
More commonly, drug companies will include language in the contract that requires the research institution to agree to not publish until all of the clinical trial sites are finished, he says.
"How will you ever know if all of the sites are finished," Slocum says. "The drug company could be slick and keep one trial going."
That type of contract language harkens back to the construction trade contract language, he adds.
The solution would be to have one drop-dead date included in the clause, so that the research institution could publish by that date regardless of the clinical trials status at other sites, Slocum advises.
"Secondly, I don’t agree to coordination of publication, where it has to go to a committee, unless the committee is independent of the drug company," he says. "I have to know the committee has independent doctors who are not beholden to the drug company to decide whether or not the publication goes out."
It’s a mistake for institutions to automatically give up the right to publish because the publication clause also covers any type of public disclosure, Slocum explains.
"So if a doctor finds out that patients are being killed on the trial and wants to bring this up, then the only way he can is through a publication clause," he says. "Even if he wants to talk about it with The Wall Street Journal or on his own web site, he can’t without the publication clause."
Also, a major publication change these days involves what medical journal editors have begun to require as additional criteria for publication, Slocum adds.
The International Committee of Medical Journal Editors has decided that studies will not be published unless drug companies agree to list clinical trials in a register, so Slocum advises research institutions to include a requirement that the trials be listed in a register.
Last fall, pharmaceutical companies balked at this contract change; but more recently, they’ve become more flexible and are permitting the contract change, he says.
Sponsors have realized that if their clinical trials are turned down for publication because there isn’t a register then the test product probably would not be approved by the FDA, Slocum says.
"Unless research can be published, the FDA doesn’t accept it as legitimate research," he says. "That’s a blanket generalization, but essentially that’s true — the research has to be publishable."
Typically, Slocum advises research institutions to make agreements that the sponsor lists all phases of clinical trials, he adds.
A last note on this part of the contract involves what principle investigators often do routinely and that is to sign a personal confidentiality agreement, that may be more strict than the clinical trial agreement, Slocum says.
This can be a big mistake that is avoided by simply having the institution’s or a personal attorney review the confidentiality agreement before it is signed, Slocum adds.
3. Payment details: Another pointless part to most pharmaceutical company contracts is a detailed cost list of clinical trials procedures and budget line items, Slocum says.
These itemized lists are pointless because the contracts typically are fixed price deals or at least fixed price per subject, he explains.
So while the sponsor might have used its own itemized list to determine what that fixed price would be, there is no reason to include the itemized breakdown of costs in the contract itself, Slocum says.
"Don’t accept super detailed cost budget documents," he states. "Instead, accept a document that says you’ll do the work in accordance with the protocol and will be paid a fixed price of X for the whole trial or a per patient price of X, but that you will not be paid for individual procedures."
Or if the pharmaceutical company balks at removing the budget details because they say it’s part of their template, then language should be put into the contract that essentially states, "We’re charging you a fixed price at bottom and whether it’s for standard of care or for other reasons, it’s this fixed amount," Slocum says.
Medicare and other government auditors accept this type of language as a disclosure that means the sponsor is not paying for specific clinical trials procedures, he says.
4. Indemnification: "This is probably the most negotiated clause for the least probable reason," Slocum says. "I would love to see an actual court case between a drug company and research organization related to indemnification or driven by indemnification, where it was a crucial issue, but I cannot find one," Slocum says.
Basically, indemnification means that the contractor assumes all liability from the contractor’s own negligence arising out of the contract.
While this is pretty standard and straight-forward in the contract world, some sponsors will want to add more confusion by cross-indemnification for their own negligence, which is not allowed in nearly all states, Slocum says.
"It’s against public policy, and even if you say, I won’t be responsible for my own negligence, state law would not enforce that," he says.
The other reason why it’s pointless to carve up too many points on this clause is because when patients/subjects are hurt and sue, they almost never sue just one party, Slocum says. "They sue everybody and let them sort it out."
Another clause to add to the contract is one that requires the pharmaceutical company to provide the defense on such lawsuits because one firm should take the lead and they typically have handled similar cases made at other research institutions and have all of the necessary data and information readily available, he says.
5. Choice of law clause: Clinical trial contracts typically list a state where the laws would apply to this agreement, but it’s better to leave out any mention of a state, Slocum says.
"If they take the state’s name out completely, then the contract is performed in your state; and state laws say the law applied to the contract is the law of the place of performance," he explains. "In absence of an agreement otherwise, that’s the rule."
6. Patent rights: "This is the least important issue in clinical trials because unlike normal basic research that an academic institution will do, a drug company has already done the basic research and has patents on all of the drugs and devices," Slocum says. "All they need from you is the testing."
So this part of the contract would not be a problem at all except that some pharmaceutical companies have gotten overreaching and demand all of the copyrights, which a research institution cannot give them, he says.
For example, a research institution may not give a sponsor the rights to all of the patient records or to reprints of published articles because the research institution doesn’t own those rights, Slocum adds.
"Publishers take copyrights on the articles, and doctors don’t have the right to say they can give away a reprint because it doesn’t belong to doctors anymore," he says.
These sort of changes to a clinical trial contract may seem intuitive, but the reason they are necessary is because pharmaceutical companies continue to use contract language that is written purely from a lawyer’s point of view and not from a risk management point of view, Slocum notes.
"The folks who should be driving these agreements are risk managers," Slocum says. "It’s not just how do we paper the case enough so it looks like we did it, but what are the risks?"