Having a Prosperous New Year with a CRO: The Gift of A Great Contract

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Having a Prosperous New Year with a CRO: The Gift of A Great Contract. Paul G. Nardulli, Attorney At Law, Optima Law Group Claudia Shojai, Supply Chain Supervisor, INOVA Diagnostic Moderator: Tim Scott, President, Pharmatek. CRO Industry.
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Having a Prosperous New Year with a CRO: The Gift of A Great ContractPaul G. Nardulli, Attorney At Law, Optima Law GroupClaudia Shojai, Supply Chain Supervisor, INOVA DiagnosticModerator: Tim Scott, President, PharmatekCRO Industry
  • CRO industry is booming, taking a larger piece of worldwide R&D expenditures -- $14 billion by CROs in 2012
  • The industry is fragmented with over 1000 CROs, including:
  • A small group of large, full service multinational entities representing 50% of worldwide CRO revenue
  • The remaining CROs being small to mid-sized entities providing a more limited menu of services, including:
  • Niche CROs providing services in a limited geographic region or on a specific disease state or therapeutic model
  • Potential Advantages of CROs
  • Reduce:
  • Time needed to develop and commercialize a new drug
  • Sponsor’s fixed costs associated with personnel, equipment and facilities needed for its R&D function
  • Provide:
  • Ready access to needed expertise and/or technology
  • Greater access to potential investigators
  • Knowledge of regulatory climate in foreign markets
  • Potential Risks of Outsourcing to CROs
  • Risks generally associated with reduced control of the clinical trial process by the Sponsor
  • Risks include:
  • Delays in completion of studies
  • Lost or poor data
  • Regulatory infractions produce indirect consequences
  • FDA regulations/GCPs
  • HIPAA
  • Fraud and Abuse
  • Private litigation exposure
  • Factor Most Often Causing Study Delays United StatesWhose and what expectations are being met with the contract? When gifts are expected and not delivered, there is little to celebrateProactive approaches to contract management.
  • Contract management and oversight is one now integral part of a critical clinical strategy.
  • Are the Sponsor and CRO proactively managing the contract in order to tackle issues that arise? A contract is the key link between strategy and execution.
  • Total Contract Management strategy will prepare your organization to better manage expectations.
  • Contract Lifecycle ManagementWhose and what expectations are being met with the contract? When gifts are expected and not delivered, there is little to celebrateClinical Trials Success begins with the scope of work
  • Clinical Trials are often derailed by a fundamental lack of clarity in the scope of work between the sponsor and the CRO and other vendors. The devil is in the details.
  • A strong starting point is a detailed Task Order Agreement that clearly outlines the scope of work, the timelines, and responsible parties. Cost overruns, delays, and damaged sponsor/vendor relationships create havoc in clinical development programs, and create a tremendous fiscal and resource burden to the industry.
  • Effective vendor outsourcing depends on clearly defined goals, expectations, and responsibilities. Have in-depth discussions of the critical contract terms, which tend to be considered non-critical but may have a major impact.
  • Key factors to consider when determining budget terms. Are invoices aligned with contract deliverables?
  • Whose and what expectations are being met with the contract? When gifts are expected and not delivered, there is little to celebrate
  • The responsibility of proper diagnostic clinical trial execution is not allowed to be delegated to a CRO per FDA regulations. Therefore, adequate contract qualification and oversight of CROs executing clinical trials for sponsors is critical to a successful study and product approval.
  • The need for defining parameters goes beyond contracts.
  • The understanding of the CRO and the sponsor is easily forsaken if the ends are understood before the means are clear. Often, both sides are talking to their understanding but not realizing they are speaking apples to oranges. This is the voodoo of the argument. Make both understand what you mean, so that with an audit by a sponsor there is not the amazing response of “I didn’t ask you to do that…” so to speak.
  • Whose and what expectations are being met with the contract? When gifts are expected and not delivered, there is little to celebrate
  • Use plain English as much as possible
  • Benefit if judge, arbitrator or mediator must review later
  • Use examples in the contract to illustrate intent/principle
  • Be liberal with use of exhibits drafted by the team members that will execute the plan (at least involve the relevant team members)
  • Be specific regarding what the milestones are and the timeline for each
  • Be clear as to payment schedule
  • Contract should include a custom scientific plan
  • Clearly define the relationship between the CRO and the Sponsor
  • Consider including as an addendum to be updated as needed, a list of all key operations, billing, and legal personnel
  • Changes to a product, service, or deliverables should only be allowed in writing and signed by both parties
  • Require periodic reports of progress/milestones in addition to required meetings at least quarterly of project managers/committees
  • Who’s actually doing the work? This may not be as obvious as it seems and an audit is not the time to find out that elves were involved
  • Personnel: Who is doing the work for each function, each phase? How long have they been with the company? References that you trust, or at least believe. Facilities that you can visit (where appropriate). Testing labs and their qualifications (facility personnel). Audits of facilities including Quality audits, EHS audit and QP audit.
  • Look for client-centric organizations: do their systems revolve around them or you? Communications: how often, what is the format (report, discussion, attendees)? Be specific. Match skills with your own: make sure the vendor provides skills that are complementary to your company’s skill set. What other vendors need to be brought to the table to make this project successful? Know this prior to starting the project.
  • Be specific with name and titles. Consider the organization structure of the CRO. Training and experience of staff with clinical research. Experience and infrastructure of high-level managers. Are quality systems applied? Basic training programs.
  • If services should be taken from outside, assessment process should be available. CRO training programs should be created for service taken from People/organizations from outside. If there is transfer of task, it must be well documented. Routine quality controls of the system and personnel must be created.
  • CRO by third parties (e.g. specialist Biostatistics, medical monitors, etc.) should have regulated data management system to make active data transfer/review easier. Thorough review of staffing levels, job descriptions, training specific to their task or job responsibilities, and observations of personnel performing work.
  • Who’s actually doing the work? This may not be as obvious as it seems and an audit is not the time to find out that elves were involved
  • Project manager’s site visits are important here – consider in contract
  • Contract should provide each party may not use subcontractors without written permission and approval
  • Whoever is doing the work should be bound by the agreement, especially relating to ownership and confidentiality
  • Define what level of personnel is required for certain tasks so appropriate authority and skill level execute each task
  • Deal appropriately with the clinical site
  • Identify and monitor the Principal Investigator
  • Reporting adverse events and other FDA requirements (more later)
  • Have all agreements been finalized, approved and do they conform to Sponsor and CRO requirements?
  • Sponsor and CRO should use agreed upon templates for various agreements (confidentiality, consulting, subcontracting, clinical)
  • Plus, perhaps any changes beyond simple tweaks are to be approved by Sponsor and CRO before finalized
  • Who owns which part of the development process? Outlining responsibilities and not just competencies can be a danger zone if not done well
  • Various models for agreements based on the stage of program, risk involved, and key requirements and functions needed are a few things that can affect the structure of a contract.  In some cases, the CRO can share some of the risk to assist the progress of the program in return for a portion of the returns.
  • Taking a Project from Initial Design through Final Production
  • Bringing a new clinical trial study design to market encompasses many more steps than might seem necessary in the early stages of the project. Insufficient attention to detail at any point during the process can require a return to earlier stages. Who owns which part of the development process? Outlining responsibilities and not just competencies can be a danger zone if not done well“Devoting Sufficient Attention to Pre-Clinical Phases Yields Benefits”
  • By involving knowledgeable researchers and manufacturing partners earlier in the product development process, it is possible to anticipate and circumvent potential delays. To provide the greatest potential for a successful product launch, the development process must be viewed as a single entity that has many component functions within it, rather than a piecemeal assortment of several unrelated suppliers who perform those functions in comparative isolation.
  • Critical Factors to Consider in Building Your Supply Chain
  • Examine all aspects of the following questions carefully when planning your product development efforts.Failing to address these issues in the beginning can create expensive delays in putting your product into the marketplace.
  • Historically, avoiding those delays can make the difference between a winning product that sells millions of units and one that dies in clinical trials.
  • Can your design and clinical trial partner give you a genuinely “seamless” product development experience? In the best-case scenario, try to find a single CRO that can give you whatever you need during the process. The logistical problems that occur when working with multiple suppliers can potentially complicate the product development process immeasurably. Here again, working with a supplier that you feel comfortable treating as a partner in the process will produce the best results.
  • Does your partner demonstrate a true commitment to understanding not only your needs, but also the needs of the patient or end user?
  • Is your partner committed to improving the patient’s quality-of-life?
  • Can your partner provide a full range of Phase III and Phase IV product development capabilities, including design verification and clinical builds?
  • Can your partner support your product’s transfer to commercialization?
  • Does your partner have a full range of drug development capabilities?
  • Who owns which part of the development process? Outlining responsibilities and not just competencies can be a danger zone if not done well
  • Do the partner’s operate under strict regulatory standards ISO 13485, GMP, CLIA, etc?
  • Does your partner have space available to support on-site collaboration? Is the space scalable according to your needs?
  • Does your partner have a long track record of product development, including a full understanding of drug product liabilities, as well as the fine points of controlled substance regulations and requirements for product labeling?
  • Does your partner have a high level of commitment to confidentiality and protecting your intellectual property?
  • The Vital Importance of Program Management The right partner for your drug product development efforts will have—in addition to the other necessary capabilities— comprehensive experience in program management. Aiming your project in the right direction and keeping it on track is an indispensable ingredient in successful, profitable product development. Given that the goal is to get your new product on the market as quickly, efficiently, and profitably as possible; strong program management skills will help to ensure you get the desired results. Conclusion The key to bringing a successful and profitable new drug product into the market is to keep the development process as seamless as possible, from concept through commercialization. That target is best met by working with a single supplier that can offer a full range of clinical trial services, and that can demonstrate complete knowledge of the complexities of drug product development. By applying adequate due diligence in choosing a product development partner, you can improve the odds of launching a successful new medical product into the marketplace—on time, and on budget. Who owns which part of the development process? Outlining responsibilities and not just competencies can be a danger zone if not done well
  • Critical to Sponsor success that they own anything related specifically to the drug, device, program
  • Alternatively, CRO will may want to maintain rights to general developments not specific to drug or device
  • Ownership related to drug or device may be modified (deal)
  • Neither party will want to be blocked from using general processes and know how not specific to drug or device
  • Even after relationship has ended
  • Who may file a patent on anything developed during the process? Must the patent filing party provide a license to the other party?
  • Heavily negotiated and corollary to ownership above – depends on the relationship
  • Sponsor may want contract to state CRO can own and file patent, subject to a royalty free, non-exclusive, non-cancellable license back to the Sponsor to use in their programs
  • What’s confidentiality got to do with it? IP is everything to a life sciences company and how to deal this part of the agreement must always be a tantamount importance
  • Confidentiality: either in the agreement or referenced as a separate agreement; IP is everything to a life science company and this part of the agreement must always be a tantamount importance.
  • Security: The confidentiality of the research performed by a CRO is critical. In addition to validated procedures for the security of electronic data and correspondence, and inspection of facility security, intrusion deterrence systems, and process for screening of employees should be examined.
  • Why is important to secure intellectual property rights (IPRs)?Offensive PurposesGaining and preserving market shares by enforcing the exclusive rights to use, import, etc, which are granted through IPRsDefensive MeasuresMaintaining control over the quality of your products, the information related to their proper use and their advertisementFighting piracy and counterfeiting as well as defending from third parties IP-threatsBusiness DevelopmentIPRs facilitates the allocation of intangible assets among partners as well as raising capital from investorsWhat’s confidentiality got to do with it? IP is everything to a life sciences company and how to deal this part of the agreement must always be a tantamount importance
  • Contract should detail what is to be kept confidential, what may be disclosed, and to whom.
  • May want to have a separate NDA to really flesh this issue out
  • Govern where disclosures may need to occur
  • Such as the with the FDA (adverse events)
  • Sponsor and CRO should be involved (maybe clinical site too)
  • Disclosure should be limited only to what is necessary
  • Should always be discussion and agreement before disclosure
  • Critical to both Sponsor and CRO that there is no IP contamination between the two when one is working for competitor
  • Really need to make sure this is walled off in the contract and requires tight controls
  • Don’t want adverse third parties (competitors) receiving the Sponsor’s or CRO’s proprietary and confidential info and the Sponsor or CRO does not want adverse third parties’ info
  • Reasons to keep info out of competitors hands is obvious
  • Getting competitors info can be just as troublesome
  • What will happen to the data that is generated? Getting good data is just part of the jobBe specific, this is not IP, but rather the actual data and notebook pages. Who owns them? How long will they be maintained? At whose expense? Data management and handlingAnother key factor in CRO selection is how data accuracy, confidentiality, and security will be addressed.  Clear communication of the data management system that will be used is essential.  Precedent of how data has been processed and stored should be available and include control data sets and possibly FDA audit records.  Clear communication of data oversight with regularly scheduled reviews should be incorporated into the data management plan.Data protection rules It is here that the proactive planning and solid execution of the previous phases pays off as the trial glides smoothly towards database lock and analysis. To ensure a successful database lock, the entire team – pulling from data management, biostatistics, medical writing, and clinical operations as needed – dedicates time to collaborate on project deliverables and review and discuss project specifics.What will happen to the data that is generated? Getting good data is just part of the jobReview the quality and status of data. Are the raw data from current or finished products complete and of the appropriate quality? In addition, do they comply with applicable regulatory requirements, and accurately reflect information compared to previous reports and correspondence?
  • Data has fair and lawful processing
  • Data is obtained only for specified and lawful purposes and is not processed in any incompatible manner
  • Data use is adequate and relevant but not excessive
  • Data is kept current (where necessary) and accurate
  • Data is not kept longer than necessary
  • Data processing is in accordance with the rights of data subjects
  • Data is protected by appropriate security measures
  • Data is not transferred to third parties unless adequate level of data protection exists
  • What will happen to the data that is generated? Getting good data is just part of the job
  • Analogous to discussion of ownership earlier – if specific to drug or device, sponsor will want ownership and access/control of data base, notebooks, other documentation
  • Data will be specific to the drug
  • Contract should set forth the scope of maintenance of data
  • Contract should require data protection and access
  • Maintenance should be for many years – potentially decades
  • Negotiate who is to pay for maintenance
  • Will it be turned over after completion?
  • Should be and both parties should have a copy
  • Who has publication rights for the results of the clinical work and research?
  • Typically, all parties (Sponsor, CRO, clinical site) have some rights
  • But non-publishing party has the opportunity to review what is to be published and make comments and alterations prior to publication
  • Sponsor and CRO should have right to reasonably delay publication until patent filings are completed
  • What about publication of adverse data – must be discussed and agreed upon by all parties
  • Should you worry about business continuity? Does planning for winter blizzards have a place in your CRO contract?Building Quality at Key Points in The Clinical Trial Process:
  • An Exercise in Developing Key Risk indicators and Critical to Quality Metrics.
  • Key to the success of QRM (quality resource management) is the capacity of leverage existing information in such a way that stakeholders can ea
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