View
215
Download
0
Category
Tags:
Preview:
Citation preview
Massachusetts Biotechnology CoalitionContract Issues for Biotech Attorneys
Thursday, March 12, 2009
Agenda:Introductions:
C. Elizabeth O’Keeffe, JD, MPH, CHC
Maria D. Buckley, Of Counsel, Nutter McClennen & Fish, LLPStephen B. Harris, Life Sciences Sr. Specialist, Chubb & SonColleen Surrette Sproul,JD, Principal, Contracts, Associates, Inc.
What contracts? (E. O’Keeffe)Boilerplate (E. O’Keeffe)Transactional Contracts; Funky Clauses (M. Buckley)Insurance and Indemnification (S. Harris)In-House Perspective; Triage; Resources (C. Sproul)Q:A
SPONSOR
SUBJECTFDAIRB**
DSMB
CRO*
INVESTIGATOR
INSTITUTION/ CLINICAL SITE
CTA
Informed Consent1572
CTA
CTAs
*Contracts on behalf of sponsor (donated by dotted line)
**May or may not be a written agreement - depends on whether IRB is commercial, local, centralized, etc
Services Agreements
Blue = CTA
Orange = Service Agreement
Green = Regulatory “agreement”
Third party vendors (e.g., labs)
CRO Contract Issues
Sponsor may want CRO to handle CTAs because of: Speed Cost Strength of CRO’s relationships with research
sites/investigators However, Sponsors may have problems with
CROs protecting Sponsors’ interests? CRO sometimes want to get contract in place
quickly and not expend resources in lengthy negotiations
CRO may not have adequate legal expertise
CRO Contract Issues
If CRO is allowed to contract on the Sponsor’s behalf, contractual controls can help protect Sponsor’s interests
Range of Possibilities CTA template
Sponsor provides template for CRO useCRO provides CTA template for Sponsor review
and approval CRO authority to negotiate
Only extends to certain provisionsCRO must submit all changes to Sponsor for
review and approval Notification of changes and amendments
Thesis
Traditionally, lawyers use the term “boilerplate” to refer to any standardized, “one size fits all” provision
Classic examples: The choice of law provision The notice provision The force majeure provision The assignment and delegation provision
Provisions: Supply a road map Serve housekeeping functions (matters of secondary
importance) “Boilerplate” is a misnomer as applied to these provisions
and that lying in wait within each of them are significant business and legal issues.
Agenda
Anatomy of a contract
Standard sections
Recommended language
Practical, operational and legal perspectives
Recitals
• Recitals (a/k/a “WHEREAS clauses”) supply helpful context.
• Describe the who, why and how.– A very high-level synopsis of the agreement
and provide a framework for interpretation of the agreement by the parties and/or the court.
• Recitals are non-binding, unless specifically incorporated.– “The recitals shall be incorporated by reference
in this agreement as if full set forth herein.”
MAGI Approachwww.firstclinical.com
• Parties & Recitals• __________ (“Sponsor”), a {form of entity}
organized under the laws of {State}, __________ (“Site”), a {form of entity} organized under the laws of {State}, and __________ (“Investigator”), Site’s {employee/contractor}, enter into this Agreement (“Agreement”) whereby Sponsor engages Site and Investigator to conduct clinical research on ______________ (“Study {Drug/Device/Biologic}”) according to the provisions of this Agreement and Protocol __________.[1,2,3,4,5,6,7,8,9]
Term & TerminationTerm:
Effective date As of a specified date or
Upon execution by last party to sign
Automatic termination (a.k.a. “Expiration”) Specific date
Completion of all study related activities “End of study” needs to be clarified
IRB closure at site?Sponsor close out visit?Data analysis from all sites in multi-center
study?
Term & Termination (Cont.)
Initiated termination:
Sponsor:Generally 3-5 different ways for Sponsor to terminate Includes a ‘no cause’ out for Sponsor
Site:Usually a way for site to terminate to protect the safety of subjects
Termination for breach: Material breach of agreement; provide
opportunity to cure
MAGI Approach
• 12. Effective Date, Term & Termination• 12.1. Effective Date• This Agreement becomes effective when signed below by all parties, on the date of the last
signature.[1]• 12.2. Term• Unless terminated earlier, this Agreement will expire when (a) Site has submitted all CRFs to
Sponsor, has resolved all data clarification queries, and submitted the closeout report to the IRB and Sponsor; and (b) all payments, reimbursements and refunds have been made.
• 12.3. Termination• The parties may terminate this Agreement under the following circumstances: Breach. Upon
material breach by a party, the other party may terminate this Agreement provided that the other party fails to cure the breach within 20 days after notice.[1,2] Subject Safety. Either party may terminate immediately based on Subject safety or welfare concerns, e.g., if the informed consent form required by the IRB/IEC or other party is unacceptable, or if the IRB terminates the Study at the Site. Alternatively, Parties may agree that Site will discontinue enrolling Subjects and attempt to agree if and how the Study will proceed at the Site. Insolvency. Either party may terminate immediately upon notice by the other party that it has filed for protection under any bankruptcy laws, has been declared insolvent, ceases or threatens to cease to carry on its business, or an administrator or receiver has been appointed over all or part of its assets. Investigator Successor. Either party may terminate if Investigator is unable for any reason to continue in that role and the parties are unable to agree upon a successor. Government Exclusion. Site may terminate immediately if Sponsor is excluded from any FDA, OHRP or Medicare/Medicaid, or other state or federal government program.
• [3]Without Cause. Either party may terminate without cause, upon 20 days’ prior notice.• [4]Upon termination, Site will immediately stop enrolling Subjects and, subject to protecting
Subject safety and welfare, cease Study activities and complete its normal Study completion responsibilities.
Governing Law/Venue
Choice of law determines which state or country’s law should govern the contract
Choice of venue determines where disputes are resolved
State institution limited to their state laws
Use: “without regard to its conflict of laws provisions”
Silence – remove the clause Where is the work being done? Many states will apply
this
MAGI Approach
• 14.1. Governing Law & Jurisdiction
• The laws of _________ govern this Agreement. The Courts of ____________ have legal jurisdiction, without regard to conflict-of-laws provisions.[1,2,3,4,5,6,7]
AssignmentWhat is it?
Ability to assign contract to another partyMay be prohibited or limited to written consent
Issues: By institution/investigator
Qualifications of new investigator/staffIndemnification, confidentiality and IP provisions enforceable
against all parties
By Sponsor/CROContinuity of obligations
Overall, ensure full assignment of responsibilities:PaymentStudy completion and reporting
Negotiating and Drafting the Assignment and Delegation Provision:
The Anti-Assignment Clause
A Typical, but Flawed, Anti-Assignment Clause:
“This Agreement shall not be assigned by either party without the consent of the other party”.
A clause that prohibits solely the assignment of the contract, without any reference to rights under the contract, presumptively prohibits only the delegation of duties
Contract Rights
• Today, contract rights are freely assignable, with certain limited exceptions
• This general rule completely reverses
earlier common law doctrines and reflects, in large part, the role that contract rights play in a modern credit-based economy
MAGI Approach
• 14.7. Assignment• Any party may assign this Agreement to an Affiliate or in
connection with the merger, consolidation or sale of all or substantially all of its assets, upon 30 days’ prior written notice to the other party, provided that the Affiliate or acquirer agrees to assume all responsibilities and obligations under this Agreement. Any other assignment of this Agreement, and the associated rights and obligations, requires the prior written consent of the other party. If Site or Investigator terminates this Agreement, it will assign to Sponsor its contracts with subcontractors, if any, so Sponsor can continue study without that party.
• 14.8. Delegation• Site may delegate Investigator duties under this Agreement
according to Section 3.6. Investigator may delegate his/her duties under this Agreement according to Section 3.8. The parties may delegate other duties under this Agreement to third-parties, provided, however, that (a) such third parties perform such duties in a manner consistent with this Agreement, and (b) the delegating party remains fully responsible for such third parties’ performance under this Agreement.[1]
Entire Agreement/Modification
What is it?Ensures that the contract represents the
entire understanding of the parties with respect to the subject matter.
Must incorporate protocol, exhibits, schedules, addendum, etc.
Assures that assurances outside the contract are not enforceable.
Issues with modifications: Must be in writing. Must be signed by proper parties. Must properly integrate with core agreement.
Putting It All Together
Contract Goals:
• Record parties’ agreement
• Merger provisions increases certainty in terms set forth
MAGI Approach
• 14.3. Entire Agreement; Modifications • This Agreement, together with any attachments or
exhibits, sets forth the entire understanding among the parties about the Study. Any prior agreements, promises or representations, whether oral or written, such as agreements of confidentiality, have no force or effect. Any modification or waiver to this Agreement must be in writing and signed by all parties to this Agreement. However, IRB-approved changes to the Protocol are incorporated by reference into this Agreement, subject to agreement on appropriate budget modifications.[1]
Contract Logistics
Proof before you send/signCopy/paste errorsTemplates getting switchedEmails vs. Hard copyWho keeps signed originals?
Post-termination Obligations
Return/destruction of confidential information
Safeguarding PHI
Return of case report forms, unused drug/device and related equipment and supplies
Surviving obligations (e.g., IP, use of name, confidentiality, indemnification)
Recommended