Practical Tips in Negotiating and Drafting A Clinical Trial Agreement
General Overview on Clinical Trial
The term “clinical trial” is defined by World Health Organization as a type of research that studies new tests and treatments and evaluates their effects on human health outcomes.[1] A clinical trial is conducted with the objectives of determining the safety, effectiveness and other effects of any product[2] on persons.
In Malaysia, clinical trial is regulated by the National Pharmaceutical Regulatory Agency (NPRA), an agency under the Ministry of Health of Malaysia. The laws which govern clinical trial in Malaysia include Sale of Drugs Act 1952 and Control of Drugs and Cosmetic Regulations 1984 (“the Regulations”). Further, the conduct of a clinical trial in Malaysia must comply with the Guidelines as well as the Directives or circulars issued by the Director of Pharmaceutical Services pursuant to the Regulations.
Clinical Trial Agreement
Section 5.14 of the Malaysian Guideline for Good Clinical Practice (“GCP”) Fourth Edition[3], which becomes effective since January 2018 requires an agreement between the relevant parties involved in the clinical trial to be in writing and Clinical Trial Agreement[4] is one of the agreements normally executed by the following parties, which are involved in the clinical trial to stipulate on their rights and obligations in respect of the conduct of the clinical trial[5]:
(a) The Sponsor: The person or entity who initiates and finances the conduct of the clinical trial;
(b) The Institution: The clinical trial site. Normally, the Institution owns the relevant equipment and facilities to enable the conduct of the clinical trial; and
(c) The Principle Investigator: The person who leads the conduct of the clinical trial at the clinical trial site.
This article is prepared to highlight on some of the practical tips in negotiating and drafting some of the salient terms and conditions in a Clinical Trial Agreement.
Salient Terms and Conditions in a Clinical Trial Agreement
The following are amongst the salient terms and conditions in a Clinical Trial Agreement, which the parties to a Clinical Trial Agreement need to give particular attention to, when negotiating and drafting the Clinical Trial Agreement prior to executing the same:
1. Clinical Trial Description
It is important for the Clinical Trial Agreement to clearly and sufficiently describe the clinical trial, and this includes amongst others:
(a) to identify the product (be it the study drug or the medical device), being the subject matter of the clinical trial (“the Study Product”);
(b) to identify the study protocol to be used in the conduct of the clinical trial (“Study Protocol”); and
(c) to state the title/name of the clinical trial; and
(d) to state the objective and the outcome desired from the conduct of the clinical trial.
Normally, the description of the clinical trial and the Study Protocol will be enclosed as schedules to the Clinical Trial Agreement.
2. Payment Terms
It is important for the Clinical Trial Agreement to clearly stipulate and provide, amongst other:
(a) on the amounts payable by the Sponsor in respect of the conduct of the clinical trial, their purposes and to whom they should be paid[6];
(b) on matters which are not chargeable by the Institution and/or payable by the Sponsor[7]; and
(c) on the payment schedule, which can be based on the deliverables to be delivered by the Institution and Principal Investigator or upon the Institution and Principal Investigator meeting certain milestones as mentioned in the Clinical Trial Agreement.
In addition, the following common clauses also need to be addressed in the Clinical Trial Agreement:
(i) on whether the amount payable are inclusive or exclusive of the tax imposed by the relevant government authority and the out-of-pocket expenses incurred by the Institution and Principal Investigator[8] in performing their obligations under the Clinical Trial Agreement; and
(ii) on the procedures involved in respect of the payment, such as to whom the invoices should be issued as well as the payment due date.
It is important to note that it is common that new and unexpected situations may arise in the course of conducting the clinical trial, which require the change to the Study Protocol, which would result to the change in the agreed scope of works which eventually affect the payable amounts. As such, it is important for the Clinical Trial Agreement to provide the relevant provisions to cover such eventualities.
3. The Parties’ Obligations
It is important to note that clinical trial is a highly regulated industry. As such, it is important to identify the requirements imposed by the relevant laws in respect of the conduct of the clinical trial, in particular, the obligations imposed on each of the parties involved in the clinical trial.
For example:
(a) Section 5 of the GPC imposes, amongst others, the following obligations on the Sponsor, which should be incorporated in the Clinical Trial Agreement (as obligations or representations and warranties):
(i) obtaining the relevant approvals, permits and licenses from the regulatory authorities as required under the laws[9];
(ii) supervising and monitoring the overall conduct and progress of the clinical trial by the Institution and the Principal Investigator[10];
(iii)designating appropriately qualified medical personnel or outside consultant(s) who will be readily reachable to provide advice on clinical trial related medical questions or problems;11 and
(iv) utilizing qualified individuals as appropriate, throughout all stages of the clinical trial process i.e. from designing the Study Protocol and Case Report Forms (CRFs) and planning the analyses to analysing and preparing interim and final clinical trial reports.[12]
(b) Section 5.6.3 of the GPC requires the Sponsor to obtain the agreement of the Institution and the Principal Investigator on the following, which should be incorporated in the Clinical Trial Agreement as the obligations to be imposed on the Institution and the Principal Investigator:
(i) that the Institution and the Principal Investigator to conduct the clinical trial in compliance with GCP, with the applicable regulatory requirement(s), and with the Study Protocol agreed to by the Sponsor and given approval/favourable opinion by the Institutional Review Board (IRB)/Independent Ethics Committee (IEC)[13];
(ii) that the Institution and the Principal Investigator to comply with procedures for data recording/reporting;
(iii) that the Institution and the Principal Investigator to permit monitoring, auditing and inspection; and
(iv) that the Institution and the Principal Investigator to retain the trial related essential documents until the Sponsor informs the Principal Investigator/Institution these documents are no longer needed.
4. Intellectual Property
It is important for a Clinical Trial Agreement to clearly address the ownership or any right, title, or interest in any inventions, patents and/or patent applications related to any inventions, trade secret, know-how and other intellectual property that exist not only prior to the clinical trial but also which are developed or resulted independently from the clinical trial, including improvements thereto[14].
This is due to the fact that any vagueness of intellectual property ownership could lead to undesirable outcomes such as legal challenges in licensing and/or marketing of the Study Product.
5. Indemnification and Insurance
It is important for a Clinical Trial Agreement to address the issue on how the Principal Investigator and/or the Institution are protected and indemnified against any claims arising from the conduct of the clinical trial. In this respect, Section 5.8.1 of the GCP states that if required by the applicable regulatory requirement(s), the Sponsor should provide insurance or should indemnify (legal and financial coverage) the investigator and/or the Institution against any claims arising from the clinical trial except for claims that arise from malpractice and/or negligence.
Notwithstanding the same, it is common that the parties to the clinical trial to generally take an insurance to protect themselves or the parties involved in the clinical trial.
Conclusion
The above merely highlight on some of the salient terms and conditions in a Clinical Trial Agreement, which the parties to a Clinical Trial Agreement need to give particular attention to, when negotiating and drafting the Clinical Trial Agreement prior to executing the same.
Since every clinical trial has its own specific and peculiar issues, it is highly advisable that the parties to the clinical trial to appoint qualified lawyers to assist them in respect of negotiating and drafting the Clinical Trial Agreement to allow the parties to agree on acceptable clauses and minimize the time taken to negotiate and finalize the Clinical Trial Agreement so that a clinical trial can commence as soon as possible.
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- https://www.who.int/health-topics/clinicaltrials/#tab=tab_1.
- can be a “study drug” or a “medical device”.
- being the clinical trial guideline issued by the Director of Pharmaceutical Services pursuant to the Regulations. Please note that GCP adopts the basic principles outlined by the International Committee on Harmonization of Good Clinical Practice but with some amendments to suit local requirements.
- which is defined by the GCP as “a written, dated, and signed agreement between two or more involved parties that sets out any arrangements on delegation and distribution of tasks and obligations and, if appropriate, on financial matters.
- please note that in some circumstance, the Sponsor will hire a Contract Research Organization to enter into the Clinical Trial Agreement with the Institution and the Principal Investigator.
- these may include the clinical trial fee, the clinical trial subject stipend, the storage fee for the storage of the Study Product as well as the data collected pursuant to the clinical trial and etc.
- these may include repeat tests such as clinical laboratory test, unscheduled visits and clinical trial related follow up such as telephone follow-up.
- and/or the sub-investigator who assists the Principal Investigator, if permitted by the Clinical Trial Agreement.
- See Section 5.10 of the GPC.
- See Section 5.5 and Section 5.18 of the GPC.
- See Section 5.3 of the GPC.
- See Section 5.4 of the GPC.
- Please note that (in addition to NPRA) the IRB and IEC of the respective Institution also assist in the regulation of clinical trial in Malaysia.
- https://www.foxrothschild.com/content/uploads/2020/07/7.7.pdf
Written by:
Khairul Fazli Abdul Kadir (Partner) khairul.fazli@azmilaw.com
Nur Aina Syafiqah Azawawi (general@azmilaw.com)
