Clinical Trial Agreements in the US: The Basics
This article takes a short look at the basic sections in most Clinical Trial Agreements (CTAs) between clinical trial sponsors (Sponsors) and clinical trial sites (Sites) in the United States. Many US CTAs have a standard set of sections. This article will cover those sections; but it is not a deep dive into the hot button CTA issues such as indemnification, subject injury or intellectual property in part because each Sponsor often approaches those sections differently (depending on factors such as patient recruitment and enrollment objectives, risk of administering the drug or device as part of the protocol and other factors).
In addition, not all CTAs use the same structure. For example, a Contract Research Organization (CRO) may be a party to the CTA instead of the Sponsor. Or, a Site may demand that the CTA include an additional party like a Site Management Organization. Those structures are not covered here in detail as they present unique problems around structuring CTAs and the related agreements such as Letters of Indemnity. Furthermore, in addition to the CTA, there are other “legal agreements” as part of a clinical trial that some Sites request a Sponsor sign. One example is a Facility Use Agreement (FUA). The FUA is technically a “clinical trial agreement” as it is an agreement directly relating to the operations of a clinical trial, but it is not a “CTA” and so not covered in this article. Here is a look at some of the clauses in the standard US CTA:
- Parties to the CTA: There are 2 common structures for US CTAs. The first structure is where the Site employs the Principal Investigator (“PI”). In this case there are usually 2 parties to the CTA: Sponsor and the Site. Furthermore, in such cases, the PI often “reads and acknowledges” some part of their obligations under the Protocol rather than signing the CTA as a party. In the other common case, the PI is not a Site employee and is a separate party distinct from the Site. In such cases, a 3 Party CTA is often more appropriate, with the PI signing as an additional party. This structure (2 party v 3 party) will impact the entire design of the CTA and liability among the parties.
- Preamble & Whereas Clauses: In many CTAs, there is a series of “Whereas clauses” or a preamble. Often, these clauses defined key terms and include the full protocol title along with a definition of the name of the PI and their affiliation with the Site (employee or contractor). Sometimes, a CTA will also include a formal “Definitions” section. This is more common in templates like Cooperative Research and Development Agreements (CRADA).
- Services and Obligations: This is a general heading for a number of sub-clauses that define the obligations of the parties and the conduct of the study. There is no standard list of obligations in this section, but usually these obligations will cover many of the operational and performance requirements. Sub-clauses in this longer CTA section often include:
- standards of performance, including requiring performance in accordance with applicable laws, the CTA and the protocol e.g.,
- a discussion around the role of study personnel and limiting use of subcontractors or affiliates,
- defining the specific study location(s) by name and address and potentially adding a clause for decentralized clinical trial conduct (for example, as a result of COVID-19),
- details around the PI (and possibly sub-investigators); including detail about what happens if the PI is no longer involved in the study for some reason,
- detailing IRB matters, data protection, ICF review requirements and HIPAA requirements, if any,
- discussing study commencement, study enrollment objectives and timelines and allowing the Sponsor to limit enrollment for studies *e.g. where enrollment is competitive),
- details around the provision of study data, provision of study reports by the site including interim and final reports, obligations of the Site to correct case report forms and statements confirming Sponsor’s ownership of the data,
- details around adverse events and safety reporting,
- a statement around acceptable protocol deviations, if any, and
- a discussion around use of study supplies, materials and equipment and possibly a reference to an additional Appendix that will list all the equipment and set out any additional equipment-specific contractual requirements.
- Compensation: The text in the CTA around compensation is often relatively short because the actual budget, fee schedule or similar document is usually attached as an appendix to the CTA. The budget appendix should contain all details around costs and fees. Having details in the CTA will likely slow down negotiations because budgets are usually negotiated by a Sponsor’s operations team, as opposed to the CTA which is often negotiated by a lawyer. The Compensation section often includes a brief description around “Sunshine Act” type disclosures and other financial reporting matters related to the Site and PI.
- Confidentiality, Non Use and Non Disclosure: This clause usually follows a format similar to a standard commercial one way confidentiality agreement with the Sponsor as the party disclosing information and the Site and PI, among others, as potential recipients. Unlike a standard commercial CDA, this clause is often “1 way” because the Sponsor does not expect to receive, or even want to receive, confidential information from the Site or its personnel. Often, a Site will try to limit the definition of confidential information to information that has been marked or stamped confidential. When this happens, a compromise can often be reached with regard to certain specific information whether or not marked (such as Study Data or the Protocol e.g.) and also tie other information not specifically listed by name to what a “reasonable person” in the industry would consider to be confidential.
- Intellectual Property: This clause can be a simple negotiation or something more drawn out depending on the needs of the Sponsor and Site. In many CTAs, where IP is not considered a risk by Sponsor because the likelihood of invention is minimal and they have broad freedom to operate, the negotiation is often focused on a few defined terms. Some Sites add broad “option” language and joint invention language, which many times require a determination by Sponsor as to whether to push back entirely or negotiate these detailed clauses. Some Sponsor CTAs include even more detail around cooperation and assignment by Site and study personnel or use of biological specimens derived from study subjects.
- Publication: Most CTAs include a clause detailing the procedures around publication of Study Data. The rights granted to PI in the clause often depend on whether the clinical trial is multi-center or not. Publication before a certain number of months usually requires Sponsor consent. Publication clauses often also include a set of provisions allowing for the protection of Sponsor IP or Confidential Information and also allowing Sponsor to review and potentially comment on any publication before it is published. More complex issues often arise when a Site makes a broad request for Sponsor study data.
- Indemnification: This clause is often included in a CTA (or a side letter) and details the indemnification, defense and hold harmless of the Sponsor, Site and potentially others such as a Principal Investigator in a “3 Party CTA.” It is a key clause that spells out how legal claims of third parties will be handled and often requires the most negotiation. Each Sponsor and Site approaches this clause differently and negotiation of this clause can often require several rounds of edits and comments.
- Insurance: Some CTAs include and extremely general statement around insurance and some include detailed requirements about the insurance. In case of a 3 Party CTA (and some 2 Party CTAs), the clause usually includes a separate provision for the Principal Investigator’s insurance because they are now an independent party to the CTA. In addition, while it is rare to find this clause as the sole reason to “walk away” from a Site, a Site may potentially ask for costly insurance that a Sponsor simply doesn’t have or intend to purchase for one site.
- Subject Injury: The subject injury clause is meant to provide a contractual mechanism for payment by Sponsor for certain trial-related injuries to study subjects. This clause follows the indemnity clause in many respects, but is not intended as indemnity and usually doesn’t contain the same detail as an indemnity clause (for example, a separate sub-section detailing the “Indemnification Procedures”). The Subject Injury clause often has standard carve outs detailing situations where a Sponsor won’t pay for costs and expenses (for example, negligence by the Site or Principal Investigator or from a natural progression of an underlying disease). In some cases, the clause may include detail around Sponsor reporting requirements under law.
- Inspections, Monitoring, Auditing: A CTA will often include a detailed clause setting out requirements around access by Sponsor’s (or by a CRO or similar third party to engaged by Sponsor for monitoring) to the Site , its personnel, facilities for regular monitoring of the Study. This clause often details the notice and other requirements in the event the Site is audited by regulatory authorities, including Sponsor access to, and review of correspondence with, those regulatory authorities.
- Record Keeping: Often this clause is part of the Monitoring clause, but sometimes a Sponsor will call out record keeping and retention requirements in detail. Generally speaking, Sponsors often require a Site to maintain records for a defined time period at no expense and the provide Sponsor with an opportunity to consent to the destruction or removal of the records and/or any additional charges related to the records.
- Term and Termination: The termination clause often mirrors a standard commercial clause because there will usually be provisions allowing for Sponsor termination with and without cause and for termination by the Site (or PI in a 3 Party CTA) with cause (for example, for Sponsor bankruptcy or material uncured breach). In addition, there is often a detailed clause setting forth the procedures around study close out, including procedures for protection of patients enrolled in the study. This section often includes the Sections of the CTA that are intended to “survive” termination.
- Warranties and Regulatory: CTAs often call out specific regulatory requirements (for example, those around Debarment and Exclusion under US laws, anti-bribery and anti-corruption requirements e.g.) or add specific performance representations, warranties and covenants around the Services (for example, use of 21 CFR 11 for electronic systems) along with standard contractual warranties by the Site and Sponsor and disclaimers by the Sponsor.
- Choice of Law and Miscellaneous: Depending on the Clinical Trial and risk involved, along with the number and locations of the parties (e.g. if a CRO or SMO is involved), a Sponsor may want to require the parties agree to a specific jurisdiction or use of a specific State law. This clause is often negotiated and rarely an impediment to executing the CTA. In addition, CTAs often include a range of clauses that often are part of standard commercial contracts (such as limits on assignment, notices, beneficiaries, a statement of independent contractor status, detail around CTA amendments, integration clauses etc.).
- Signatures: Often this page will include generic terms such as “Sponsor” or “Institution.” At a minimum, Sponsors should consider replacing the generic terms with the formal legal names of the parties.
- Attachments: One common attachment is the “Budget” or “Fee Payment” schedule mentioned above which sets forth the details the payment of costs and fees. This attachment often includes additional defined terms including terms that are legal in nature (such as, in some cases, the definition of “Screen Failures” or terms around reimbursement of study expenses). In addition to the Budget, some Sponsors require additional trial specific attachments, such as a list of equipment and relevant detail around its use and return.
This article was intended as a short introduction to many common CTA sections. It is not a complete summary of CTAs, clinical trials or any the law related to clinical trials and is not intended to provide any legal advice or establish the relationship of attorney and client. If you would like to learn more about how I can help you with the legal review of CTAs for your next clinical trial, please contact me here.
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