RECENT DEVELOPMENTS IN CLINICAL TRIALS AGREEMENTS IN EUROPE
This article examines recent developments in clinical trials agreements in three major European jurisdictions (the UK, France and Germany), and analyses some of the key legal issues that are likely to arise in the negotiation of such agreements.
Overview
The UK has two model clinical trial agreements, one for use by a sponsor and a trial site, the other for use where a contract research organisation is also involved. The use of the agreements in unamended form is strongly endorsed by the UK Government, although it is not compulsory.
There is no universal standard clinical trial agreement in Germany. Recent changes in German employee inventions law have necessitated a review of the structure and contents of clinical trial agreements used in Germany.
Although there is a standard form clinical trials agreement available for use in France, it is not endorsed by the French Government and its use is not compulsory. From a sponsor's perspective, the standard agreement does not deal adequately with the ownership of intellectual property arising from the trial, or publication rights.
The UK
Model clinical trials agreements
The past two years have seen the publication of two model clinical trials agreements in the UK: one for use by the trial sponsor and the National Health Service ("NHS") hospital in which the trial is to take place, and the other - a three party agreement - for use where the sponsor has delegated some of its responsibilities to a contract research organisation ("CRO"). The two agreements are known respectively as the model Clinical Trial Agreement (the "mCTA") and the CRO mCTA. They are intended for use in relation to commercial, industry-sponsored Phase II to IV trials of investigational medicinal products undertaken in NHS hospitals (and, in relation to the CRO mCTA, where the sponsor has delegated some of its duties to a CRO).
The mCTA was launched in October 2006, replacing the first version of the agreement from 2003. The CRO mCTA was published in October 2007, and is based very closely on the mCTA. Both agreements are intended to reduce the time spent negotiating clinical trials agreements, thereby speeding up trial site initiation with the ultimate aim of making the UK a more competitive location for clinical research.
Although the use of the model agreements in unamended form is not compulsory, they are strongly endorsed by the UK Government and industry bodies.
The mCTA
The original mCTA, from 2003, was reviewed and amended in 2007 in an attempt to iron out the main issues which were likely to be subject to negotiation between sponsors and hospitals, with a view to speeding up conclusion of the contract. In general terms, the latest mCTA represents a shift in favour of the NHS hospitals from the original mCTA. For example:
· Intellectual Property - all IP and know-how “arising from and relating to” the trial, the investigational medicinal product or the protocol for the trial belongs to the sponsor, except that IP and know-how relating to the hospital's clinical procedures (and improvements to them) are excluded and are owned by the relevant hospital. Under the 2003 mCTA, the sponsor was, without exception, entitled to all IP and know-how arising from the trial.
· Hospital liabilities – a hospital's liability under the mCTA is now capped. For more serious breaches of the mCTA (namely breaches of the confidentiality, data protection, freedom of information, publication and intellectual property provisions), the cap is two times the “value of the contract”. For all other breaches, the hospital's liability is capped at the fees payable by the sponsor under the mCTA.
The CRO mCTA
As stated above, the CRO mCTA is based very closely on the mCTA. However, there are a number of CRO-specific issues which are, in many cases, likely to lead to the negotiation and amendment of the terms of the CRO mCTA. For example:
· CRO with limited duties - The UK Government's Department of Health CRO mCTA guidance notes acknowledge that its use may not be appropriate where a CRO undertakes only a very limited range of services for the sponsor, such as drafting the Ethics Committee submission. In such cases, the notes state that the mCTA between the sponsor and the hospital could be used instead, without the need for a 3-way agreement. This highlights a potential issue with the "one size fits all" approach to a three way hospital/ sponsor/ CRO agreement: the degree to which the sponsor wishes the CRO to have rights or functions in relation to a particular trial site will vary considerably, suggesting that changes to the CRO mCTA will often be inevitable.
· Sponsor/ CRO contractual arrangements - One of the key points to consider before signing up to the CRO mCTA is its relationship with the contract between the sponsor and the CRO. The sponsor/ CRO contract should be reviewed carefully to check that it does not conflict with the provisions of the CRO mCTA. Sponsors and CROs should also give careful consideration to which agreement should take precedence in the event of a conflict between the two.
Germany
In Germany, the laws governing medicinal products and medical devices require manufacturers to conduct clinical trials before the product or device can be placed on the market. Those trials usually involve gathering all relevant data regarding the efficacy and side effects of the product or device. Such data may, under German patent law, represent either a patentable invention or a so-called creative contribution to such invention. In both cases, German employee inventions law, in particular the German Act on Employee Inventions (Arbeitnehmererfindergesetz, ArbEG) applies. Recent changes to the ArbEG have made it necessary to adapt clinical trials agreements, as well as any related standard terms and conditions used by industry (sponsors) and clinical investigators.
Changes to employee inventions law
In an attempt to generate a source of income for public universities, the German legislature abolished so-called "professorial privilege" according to which professors and comparable academics (referred to here as "professors") retained ownership of any invention they made in the performance of their academic research. Section 42 ArbEG was amended to the effect that all inventions made by academics, like any other employee invention in Germany, have to be notified to the university as the employer. The university may then require the relevant professor to assign his rights in any such inventions to the university, leaving the professor to make a claim for adequate remuneration in return. While such remuneration is normally calculated taking into account the actual worth of the invention for the employer and the employee inventor's contributions to the creation, professors may claim thirty percent of the gross earnings of the university in exploiting the invention. Further, for constitutional reasons, professors may at their own discretion decide not to notify the university of an invention at all (the so-called negative right of publicity) or publish it two months after having notified it to the university (the so-called positive right of publicity).
The impact on clinical trials agreements
Traditionally, clinical trial agreements were made between the pharmaceutical company and the professor personally; rights in any inventions made during the clinical trial were transferred to the sponsor, and in some cases money was paid for such transfer. After the change in the law described above, however, the statutory right of universities to acquire rights in inventions of their academic staff made it necessary to conclude these agreements directly with the investigator’s employer, the university. Most universities subsequently developed their own standard agreements (although there is no “universal standard agreement” in Germany), but usually the standard terms used by pharmaceutical companies prevail in negotiations.
In order to overcome the more complex position under the new employee inventions regime, clinical trial agreements should contain an obligation on the university to claim and subsequently assign to the sponsor all employee inventions relating to the clinical trial which are notified to it. In addition, it is advisable to arrange for an express waiver of the positive and negative right of publication by all academic staff involved in the performance of the agreement. Such a waiver can and should be declared separately from the main agreement.
Most university standard operating procedures governing clinical research for third parties ask for at least a non-exclusive licence to be granted back to the university for academic and research purposes, and the sponsor will usually agree to such a licence. However, many university SOPs also stipulate that the sponsor shall take over the university’s obligation to remunerate the employee inventors if rights in inventions are to be transferred to the sponsor, especially in cases where such transfer is to be free of charge. Contractual provisions to this effect can be problematic though, since they could be understood to mean that the sponsor is obliged to compensate the investigator professor as if he or she was an employee of the sponsor. This can potentially lead to further complications, since employees generally have a right to receive an amount of compensation, during the life of the relevant patent(s), which is related to the scope of use of the invention. Furthermore, an investigator professor may require the sponsor to provide accounts of the use of the relevant intellectual property, such as by providing figures showing the turnover and profits made with, say, a medicine based on a new compound found or modified by the professor. It goes without saying that no sponsor will be keen to disclose this information, particularly where a professor may subsequently leave his position in academia and join a competitor of the sponsor.
Where a university insists on an "indemnity" type provision in a clinical trial agreement against its obligation to remunerate its employees for inventions made in relation to the trial, any such provision should be drafted very carefully. In many cases, it is preferable for the sponsor to include nothing in the agreement on compensation for the inventors, or to pay the university a defined one-off sum in consideration of transferred inventions without taking over any further obligation to the inventors.
France
In France, clinical trials are governed by a specific legal framework that is defined by the “Huriet-Serusclat” Act No.88-1138. The Act does not include any specific provisions regarding the relationship between the parties engaged in clinical trials, nor does it provide for mandatory provisions to be inserted in clinical trial agreements. The Good Clinical Practice Guide published in 1987 by the French Health Authority (AFFSAPS) does provide minimal conditions and recommendations, such as the obligation to have in place a written agreement which includes provisions dealing with, for example, the allocation between parties of obligations and liabilities, the term of the agreement and confidentiality. Apart from that, clinical trials agreements are, like any other agreement in France, subject to the general principal that parties can choose the terms on which they contract.
In practice however, most clinical trial agreements are drafted in the same standard form. Such a draft was established by the French National Union of the Pharmaceutical Industry (“LEEM”) to clarify the relationships between the parties involved in clinical trials. Although that standard agreement is not endorsed by the government and is not mandatory as such, all public hospitals involved in clinical trials tend to propose this standard form to the sponsor.
The standard form does not contain many provisions and generally refers to the provisions of the “Huriet-Secusclat” Act, most notably in relation to the investigator’s liability in relation to the treatment and evaluation of patients under research protocols, the provision of sufficient information to patients, and the obtaining of patient consent.
The sponsor's perspective
Although French public hospitals are comfortable in using the standard agreement, sponsors – particularly sponsors from outside France - tend to try to renegotiate the agreement to cover all those areas that the sponsor does not consider to be catered for adequately. In particular, the standard agreement does not, from a sponsor's perspective, fully cover ownership rights in the results and publication rights.
Sponsors generally consider that they should own all rights in the results of the trial in return for the payment of fees to the investigator and trial site for carrying out the trial. Investigators, however, will often argue for ownership or at least joint-ownership in the results, particularly where it is anticipated that the results will be patentable. Although a compromise is generally found through, for example, an increase in fees and/or enhanced publication rights, a position that is generally accepted to be fair is to include provisions where all intellectual property rights related to the investigational medicinal product (including formulation), or related to the sponsor’s protocol for the clinical trial, are vested in the sponsor, while all intellectual property rights related to any clinical procedure and related improvements belong to the investigator.
The publication clause is also a provision that is often renegotiated by the parties, on the basis that the investigator wishes to take credit for their work in the trial through publication. However, French legislation provides that any written comment regarding a clinical trial result shall be subject to the prior and joint agreement of the investigator and the sponsor. As a result, specific attribution wording is often agreed by the parties for use in publications, stating for example that the trial was conducted by the investigator but in partnership with the sponsor. Furthermore, it is important to provide the sponsor with the right to prevent or delay the publication where the filing of a related patent application is contemplated.