UK: The Five Legal Pitfalls Of Clinical Trials Agreements

Last Updated: 13 June 2019
Article by Sarah Lynam

Collaboration between pharmaceutical companies, research organisations and hospital trusts, and the resulting clinical trials of new products and processes are an essential part of getting new drugs to market.  Clinical trials are, of course, subject to a high degree of regulation, with multiple parties being involved in their successful execution. It is therefore not surprising that the contractual framework surrounding said trials may be complex.    

What is a clinical trial agreement?  

A clinical trial agreement ("CTA") is the legally binding agreement between a sponsor, usually a pharmaceutical company which provides the study drug or device and financial support, and the host institution, often an NHS hospital or Trust which provides the data and results of interest. However, other parties may be involved in the execution of the trials, such as a contract research organisation, clinicians, manufacturers, suppliers, and, of course, patient volunteers.  The roles and responsibilities, and perhaps most importantly, liabilities, of each party must be clearly defined before any trial is undertaken.  

This article does not aim to consider all of the issues which may arise in relation to a clinical trial, which may be many.  Instead, we talk through an overview of some of the key issues that must be addressed in any CTA.  

1. Form of agreement

CTAs differ from standard commercial services agreements because they focus on the protocol of a trial and risk, rather than commercial benefits or financial gain.  Clearly, there may be a direct risk of harm to human volunteers who are the subjects in any trial.  Furthermore, a party to the agreement is likely to be an NHS hospital, i.e. not a commercial entity.  The considerations are therefore different.  

In the UK, there are several approved model templates which are endorsed by the Government and are, generally speaking, preferred by NHS Trusts.  The room for negotiation is often therefore different to normal commercial practices.  That said, it is still important for sponsors to ensure that their interests are best protected.  

The CTA itself is the main agreement that governs the trial, but given the complexities of clinical trials and the number of parties involved in bringing them to fruition, there will be other agreements in the background. Such agreements will include manufacturing and supply agreements, agreements with a qualified person who certifies the product for trial, consultancy agreements with medical practitioners and consent forms with donors, patients etc.  If the sponsor is outside the UK, they are required to have appropriate representation (an agent) within the UK to interface with patients and regulatory authorities.  Consideration should be given to whether the agent is simply a post-box, or whether they take on any responsibilities in relation to the conduct of the trial.  

2. Regulatory framework  

The management of clinical trials in the EU is currently governed by Directive 2001/20/EC (the "Clinical Trials Directive"), but it is expected that at some point in the next 12-18 months, changes to the regulatory framework will come into force.  The new EU Regulation 536/2014 (the "Clinical Trials Regulation") was approved in April 2014 but has not yet come into force primarily because, put simply, the IT infrastructure is not yet in place to support it.  The Clinical Trials Regulation aims to simplify some of the rules and ensure that there is harmonisation between clinical trials conducted in all of the EU member states, enhance patient safety and increase transparency.  

CTA templates that are commonly used in the UK comply with the current regulatory regime.  Practitioners should therefore ensure that the templates are updated with the new legislation when it comes into force.  However, the question on everyone's lips is how will Brexit impact the regulatory framework?  The issues that Brexit raises are beyond the scope of this article, but it is safe to say that there is real concern amongst those in the medical research community that, regardless of the timing and mechanism of the UK's withdrawal from the EU, if the UK does not align itself with the EU regime post-Brexit it will be a much less attractive prospect for clinical trials and scientific advancement.  

3. Liabilities and ethical considerations  

Clinical trials involve human volunteers.  The consequences if anything goes wrong can be catastrophic (many readers will remember the TGN1412 trial, also known as the Northwick Park "Elephant Man trial" in 2006).  It is therefore essential that any agreement deals with liabilities and determines who will be responsible should anything go wrong, and adequate insurance provisions put into place.  

In the UK, the template CTAs incorporate the ABPI standard deed of indemnity.  In contrast to standard commercial transactions in which large pharmaceuticals often have the deepest pockets and therefore the most bargaining power, the standard indemnity favours the non-commercial entity i.e. the NHS, and, at first blush, can appear to be one-sided.  The sponsor's ability to negotiate such provisions depends on the size and importance of the trial and its financial power.  Generally speaking, there is perhaps less appetite on behalf of sponsors to negotiate such provisions than there might otherwise be in a standard commercial transaction – it is more important that the sponsor can properly trial its product or device by having access to a large pool of patients and the infrastructure of the NHS.  

In addition to the standard indemnities, CTAs must contain adequate insurance provisions to to cover the liability of the investigator or sponsor.  As many sponsors are US based and consequently have in place US insurance policies, practitioners would be best advised to ensure that such policies are EU compliant.

4. Intellectual property rights

CTAs differ from most commercial agreements in that the IP generated is usually data that can be submitted to a regulatory authority in order to obtain approval for the drug in question.  In most cases, they are unlikely to give rise to potentially patentable subject matter, but IP is still of paramount importance in such agreements.  As with most commercial transactions, the key consideration is who owns the IP?  Background IP should be owned by the party who brings it to the trial, and consideration should be given to the licences required to enable the parties to the agreement to exploit this in relation to the trial.  In contrast, in respect of any IP generated by the trial (the "foreground IP"), the standard position in the UK template CTAs is that such IP will be owned by the sponsor.  However, it is worth remembering that the position may not be that straightforward and should be considered on a case by case basis, and even issue by issue basis.  This is because there may, in reality, be several categories of IP – that which relates to the product which is subject to the trial, that which relates to clinical procedure and any improvements to existing IP.  Again, the parties should consider what licences may be necessary to deal with the exploitation of any such foreground IP.  

In trials where new IP is generated, such IP is most likely to relate to a potential application for a second medical use patent, i.e. an application for a patent in respect of a new use of a known compound.  However, whether any application will result in patentable subject matter is questionable: filing a patent application prior to the commencement of the trial, without any supporting data, may lead to a lack of plausibility (on the grounds of insufficiency or lack of inventive step); alternatively, fling the patent application after completion of the trial once the data is generated, the lack of confidentiality may result in the patent application being rejected as it lacks novelty.  This is an area of law which has not yet been fully tested, but the ownership of any rights generated by a clinical trial should be addressed in the CTA.   

5. Personal data  

Clinical trials necessarily result in the collection and subsequent use of large amounts of sensitive personal data, and the voluntary consent of the patients is necessary for participation in such trials.  Readers will be aware that the introduction of the General Data Protection Regulation 2016/679 ("GDPR") has required that organisations have robust processes in place in respect of the use of personal data.  This means that participants in a clinical trial should have access to their data, and are provided with information about how it will be used and stored.  In reality, data relating to participants in clinical trials is likely to be anonymised, in which case the GDPR will not apply.  Nevertheless, there are ethical considerations that must be met, and consequently the treatment of personal data is pretty much the same: the participants should be informed about how their data is used even if technically speaking it is not classed as "personal data".  Such matters will already be familiar to practitioners advising on CTAs, where ethical considerations and the protection of patient volunteers has always been paramount.  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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