This presentation was delivered at the Outsourcing in Clinical Trials: Medical Devices Europe 2016 conference in München on 17 February 2016. It covers do's and don'ts for CRO contracts in the medical devices sector.

1. DEVELOPING
STRATEGIES FOR
CONTRACT
ADHERENCE
Outsourcing in Clinical Trials:
Medical Devices Europe 2016
17 February 2016
Erik Vollebregt
www.axonadvocaten.nl

2. Overview
• Goals of clinical cooperation
• Setting up your cooperation model
• Compliance issues
• Contract law and regulatory issues
• Drafting tips

3. Goals of clinical cooperation
• ICH-GCP: sponsor can delegate duties and obligations partly or wholly-
responsibility always stays with sponsor
• All GCP requirements that apply to a sponsor but have been delegated to the
CRO, also apply to the CRO

4. Best strategy by far

5. Align goals and interests
Avoid spill-over of know-
how and confidential
information to competitors;
focus on customer project
Maximum flexibility in customers;
synergies
No pre-financing, pay based
on results
Pre-finance as much as possible,
payment regardless of results
Milestones with fixed end
data
Maintain flexibility to deal with
contingencies
Liable for direct and indirect
damages
Cap liability, preferably at invoice of
milestone value
Termination for cause and
termination assistance if
project is likely to fail
Prevent switching if results look to
be disappointing, termination
assistance only against payment

6. Cooperation model (1)
• Ad hoc or more structural
• single trail, multiple trials or joint research centre?
• IP ownership
• does CRO, hospital or researcher have strategic considerations
re IP?
• Clinical trails involved
• initiated by hospital / doctor or by manufacturer?
• Define sponsor and investigator roles
• Who manages multi-centre trials?

7. Cooperation model (2)
• Services and payments
• What - if any - services will the hospital provide at what price?
• Remuneration basis (project / hour / day / year)
• Services to be provided by hospital / CRO depend on how structural
cooperation is
• Data capture and processing
• Facilities and staff (administrative / research)
• Comparative testing and feedback on prototypes
• Training of manufacturer staff and external parties

8. Cooperation model (3)
• Contract party
• hospital / doctor (usually contract research agreement with CRO)
• CRO (Master services agreement with customer)
• Both combined (e.g. UK CRO/NHS/Sponsor model)
• Goal of study
• gather clinical data for CE approval
• Authorities / Ethical Committee approval required
• post-marketing follow up study

9. Overview of typical CRO
agreement
Preamble 15. Bonus / malus clause
1. Scope and qualification 16. Payment provisions
2. Clinical trail provisions 17. Secrecy
3. Changes to scope 18. Intellectual property
4. Sites 19. Entry into force and termination
5. Choice of trail physicians 20. Consequences of termination
6. Compensation of trail physicians 21. Notices
7. Inspection and destruction of documents 22. Assignment of rights and obligation
8. Ethical Committee approval and other
approvals
23. Applicable law and forum
9. Side effects 24. Miscellaneous
10. Processing of data
11. Provision of test devices Annexes
12. Duties of care and liability Annex 1: Research protocol, research plan,
milestones
13. Insurance Annex 2: Services description and financials
14. Compensation and costs Annex 3: Costs

10. Intellectual property
• Define foreground and background IP
• What IP, if any, should the CRO own?
• related to trial management
• What IP should the investigator own?
• publications, non-device specific techniques
• What IP should the manufacturer own?
• IP on clinical data, foreground IP on device
• Other obligations
• Confidentiality and record keeping
• Cooperation with IP filings (e.g. patent)

11. Compliance considerations (1)
• Eucomed healthcare professionals guidelines - guiding principles
• Transparency
• Documentation
• Equivalence
• Separation
• Agree compliance with Eucomed and other codes / law

12. Compliance considerations (2)
• Local and foreign mandatory law
• Anti-bribery regulations
• US law (generally applies to any company listed in the US or with
substance there)
• Foreign Corrupt Practices Act
• Sarbanes Oxley
• Consider any rules applicable to hospital and HCPs
• National ethics rules for HCPs

13. Compliance considerations (3)
• Relevant laws and standards
• ISO EN 14155 - medical devices clinical investigation (currently revised
for post-market studies) and ICH GCP
• (European Commission is working on MEDDEV)
• National law on clinical investigation
• insurance obligations / liability
• informed consent

14. Compliance considerations (4)
• Personal data
• The more patient data is processed digitally
and internationally, the more important this
is
• Safe Harbor is invalidated for the moment,
while many CROs rely on it
• Negotiation of data processor arrangement
with customer
• Division of responsibilities regarding
obtaining consent etc.

15. Compliance considerations (5)
• General Data Protection Regulation imminent
• Data protection on steroids
• Nearly finalized
• Will enter into force in 2017
• Will impact severely on collecting and processing of personal data
concerning health in the EU and international transfers

16. 16
GDPR: threatening healthcare

17. Structure of typical agreement
• Preamble
• State objectives of parties
• Scope and cost of services (elaborate in detailed annex)
• Describe type of agreement and end result (good faith effort or certain
number of CRFs / finalisation of trail?)
• Describe division of responsibilities - who does what?

18. Structure of typical agreement
• (non) exclusivity
• Define field / procedure / product group in case of exclusivity
• Compliance paragraph (FCPA, Eucomed issues)
• Link compliance to termination and damages
• Anti-TUPE clause
• To avoid impression of activities being transferred

19. Structure of typical agreement
• Milestones
• Link milestones to consequences
• payment / fine
• termination
• Define milestones sufficiently clear
• date, inclusion of first patients, certain number of CRFs, last patient
out
• Make sure only one of the parties has the final word about attainment of
milestone

20. Structure of typical agreement
• Influence on CRO personnel
• ‘Key man clause’
• for essential persons
• ‘Kick out clause’
• for persons the sponsor wants to get rid of
• Influence on choice of centres and centre investigators
• CRO decides or sponsor decides?

21. Structure of typical agreement
• Intellectual property provision
• Watch out with local (mandatory) law on IP and employees / university
staff / hospital staff
• Assignment of IP conditional upon payment?
• Include obligation to document know-how
• In case certain IP stays with hospital / CRO, use background /
foreground model

22. Structure of typical agreement
• Confidentiality / security
• Make sure confidentiality applies to all persons involved
• Post-termination:
• Obligation to keep confidential until value of information is nil,
or
• Obligation to erase / destroy information after termination
• Make the other party takes security seriously
• Require e.g. encryption and password protection of any USB
device
• Chinese walls with other site systems or other clients’
information

23. Structure of typical agreement
• Publications
• Very important for hospital / doctors
• Tricky for manufacturer : novelty destroying acts with respect to patent
applications
• CRO may be indifferent either way
• Manage degree of manufacturer control on final publication taking into
account (possible) rules on manufacturer influence and delays

24. Structure of typical agreement
• Assignment / involvement of third parties
• Only with consent
• Only if third party assumes the same obligations vis-à-vis manufacturer
• Duration, evaluation clause and options
• Fixed period or unlimited period?
• Evaluation clause can provide escape in case of disappointing results
• Include option for further research

25. Structure of typical agreement
• Liability
• CRO will always want to cap
• invoiced amount, insured amount
• Under most laws, CRO is liable for subcontractors
• include specific indemnification for clarity
• Exclusion of gross negligence and intent generally not possible
• Check with legal - very national law specific problems

26. Structure of typical agreement
• Termination regime
• What constitutes a default? Remedy period?
• Think about consequences of termination
• return of documentation and devices
• termination assistance by CRO
• survival of clauses
• No termination for convenience on the part of the CRO
• Termination for convenience with severance payment for
manufacturer?
• Avoid fixed duration agreements

27. Structure of typical agreement
• Termination regime (2)
• Right for CRO to terminate if study goal cannot be met (e.g. number of
patients)
• Right for sponsor to continue with study with already included patients
• Termination possibility in case of
• bankruptcy, receivership
• acquisition / change of control

28. Structure of typical agreement
• Vigilance paragraph
• Hospital reports all incidents and other significant occurrences
• Governing law / forum / dispute resolution mechanism
• Contract party / consent of hospital or clinic
• HCP him-/herself as contract counterparty should be the exception
• Have hospital co-sign agreement

29. Structure of typical agreement
• Annexes
• Scope of work / services
• Research plan / schedule of work
• Milestones
• Payments
• Hourly rates / per diem / per (half) year / milestone payments
/ projects
• Facilities / staff / visiting HCPs
• Form or other tool to track costs
• Royalty payments (if any)
• Compensation model in case of early termination

30. Structure of typical agreement
• Annexes (cntd.)
• Assets contributed (e.g. research devices)
• Clinical trial annex
• Protocol
• Investigator brochure
• Division of responsibilities
• Manage patient privacy and personal data
• Adverse events reporting form
• Preferably containing all information requested on the Report
Form Manufacturer’s Incident Report Medical Devices
Vigilance System (MEDDEV 2.12/1 rev 6)

31. Structure of typical agreement
• Annexes (cntd.)
• Timelines
• Reports
• Per milestone
• Per time period
• Financials
• Assets (if e.g. devices or consumables are supplied)

32. www.axonlawyers.com
THANKS FOR YOUR ATTENTION
Erik Vollebregt
Axon Lawyers
Piet Heinkade 183
1019 HC Amsterdam
T +31 88 650 6500
M +31 6 47 180 683
E erik.vollebregt@axonlawyers.com
@meddevlegal
B http://medicaldeviceslegal.com
READ MY BLOG:
http://medicaldeviceslegal.com