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Negotiation of Clinical Trial Agreements

UCI faculty and staff participate in numerous clinical trial projects to study investigational drugs or devices. These studies are usually funded by pharmaceutical companies and are an important part of the process to assure the safety and efficacy of the drug or device, obtain Food and Drug Administration (FDA) approval and bring a product to market.

Sponsored Projects (SP) is responsible for reviewing, negotiating and legally executing agreements from external funding sources. The resolution of many contractual issues requires coordination between the external funding source, Investigator and SP; the involvement of each party is essential to a successful contractual arrangement with mutually acceptable terms.

As a public, nonprofit educational institution, the University is bound by certain policies and regulations regarding what it can and cannot accept in a clinical trail contract. These policies are designed to protect the welfare of individuals participating as research subjects; foster the University's basic mission of teaching, research and public service; and minimize the various forms of liability associated with human research.

For-profit private sponsors, such as pharmaceutical companies, are motivated by different forces than the University. As a result, they sometimes do not understand the ideals and principles behind our policies. Consequently, additional time may be required for contract negotiations while SP works with the sponsor to arrive at a mutually acceptable agreement.

When negotiating clinical trial contracts, the University primarily focuses on securing acceptable contract clauses regarding high-risk issues such as subject injury, indemnification, confidentiality, ownership of data, patent rights and publication rights.

The University's standard clinical trial agreement and the clauses proposed by the University during contract negotiations are based on the following assumptions:

  • That the clinical investigation is conducted under a protocol that is a FDA Phase I, II, II, or IV drug study or a FDA regulated medical device study;
  • That the sponsor provides its proprietary product and study protocol to the University for the purpose of conducting a clinical trial; and
  • That the sponsor will fully fund the cost of the trial (i.e., no work will be supported in whole or in part with other funds, including Federal funds).

Principal Investigators should discuss all aspects of the clinical trial with their Contracts Officer prior to the start of negotiations.  The involvement of UCI faculty in protocol development and/or study design creates additional issues that both parties must fully address. As a result, different or additional contract terms must be negotiated.

Investigators should provide SP with a copy of the draft clinical trial agreement (CTA), protocol, and a company contact person as early in the process as possible.  If a Master Agreement between the Sponsor and the University of California exists already, the negotiation process will typically be expedited.  IRB approval is not required in order to submit the proposal to SP and begin contract negotiations.

Although each document is reviewed on a case-by-case basis, there are a number of key issues that are common to most clinical trial agreements. These following items will be negotiated by SP with the sponsor:

AGREEMENT PARTIES
All Clinical Trial Agreements should be only between The Regents of the University of California and the Sponsor. The Investigator is an employee of the institution and should not be a named party to the Agreement.

FINANCIAL ARRANGEMENTS
Generally, the University negotiates a firm fixed-price per subject contract with a payment schedule. Such schedules usually provide for periodic payments at regular intervals or payments upon the completion of milestones (e.g., enrollment of a certain percentage of subjects, submission of a certain number of case report forms, etc.).

The University cannot underwrite expenses for the sponsor; therefore, the University requires a minimum advance payment of 10-20% of the total anticipated cost upon execution of the agreement. When a project involves significant start-up costs, the University may require a larger initial payment.

As a public-supported institution, UCI must recover the full cost of research conducted for outside sponsors, including all associated operating costs (overhead). To do otherwise would result in subsidizing for-profit research with public funds. Overhead costs are facilities and administrative (F&A) costs incurred in support of the University's research infrastructure. The University pools its overhead costs for ease of accounting because it is difficult to assign these costs with a relative degree of accuracy to a specific project or program. The federal government's Office of Management and Budget establishes the standards for calculating the indirect cost rate and UCI negotiates its rates with the United States Department of Health and Human Services audit agency on a periodic basis. The University derives its overhead rate for clinical studies from applicable components of the federally approved rate.

Our facilities and administrative (indirect) costs web page contains more information about F&A costs and current applicable F&A rates.

INDEMNIFICATION
When conducting a sponsor-designed clinical trial protocol, the University is following the sponsor's instructions. As a public, non-profit educational institution, UCI cannot bear the financial responsibility for any injury or damages resulting from the performance of the clinical trial. Consequently, the University requests that the sponsor maintain a policy or program of insurance sufficient to support this obligation. The sponsor’s obligation to assume all financial responsibility does not apply to injury or damage that is: 1) caused by UCI’s failure to adhere to the protocol; 2) failure to comply with FDA or other governmental requirements; or 3) caused by the negligence of a faculty member or the University.

CONFIDENTIALITY
UCI must maintain an open academic environment to fulfill its mission and meet its fiduciary responsibilities as a public educational institution. Clinical studies involving the use of a sponsor’s confidential information will be accepted if: (1) the extent of confidential information shared with the University is limited; (2) the information is clearly identified by the sponsor as confidential: and (3) the sponsor agrees that the University will not be financially liable for disclosure. The University cannot accept projects requiring overly-broad access and use restrictions or elaborate data protection procedures.

Raw source data or documentation generated by the University during the conduct of a clinical study cannot be considered to be owned by the sponsor, nor can it be considered or treated as confidential information.

In addition, any agreements entered into by the University are subject to public disclosure under the State of California Public Records Act.

PUBLICATION
Timely publication and dissemination of research/study results are important principles behind the academic freedom afforded to each UCI faculty member. However, the sponsor may want to comment on the content of such publications, make arrangements for the protection of intellectual property, or ensure that sponsor confidential information is not improperly disseminated in such publications. These are legitimate business concerns and UCI is willing to work with sponsors to address these concerns. However, the resulting agreement cannot restrict UCI faculty from freely publishing research/study results.

UCI negotiates CTAs that address the needs of both parties by providing the sponsor with a pre-publication review and comment period. The sponsor may also request that their confidential information be removed from the proposed publication. UCI is also willing to delay dissemination of study results for a reasonable period of time to accommodate multi-site studies.

INTELLECTUAL PROPERTY
Sponsors of University research are usually granted patent rights in accordance with University policies. However, the University may grant greater rights to sponsors of studies that meet all of the following criteria:

  • The clinical investigation is an FDA Phase I, II, III or IV drug study or an FDA regulated medical device study.
  • The sponsor provides its proprietary product and study protocol to the University for the investigation.
  • The cost of the clinical investigation conducted according to the sponsor's protocol is fully funded by the sponsor and is not supported in whole or in part with any other funds, including Federal funds, gift funds or foundation funds.
  • There are no known third-party rights to intellectual property of The Regents that would be compromised by granting rights to the clinical trial sponsor.
  • All University requirements regarding the administration of agreements with private sponsors for drug and device testing using human subjects have been satisfied.

If all of the above criteria are met, the University may grant to the sponsor a certain range of rights to inventions made in the direct performance of the clinical trial protocol. The terms contained in the standard clinical trial agreement are used for Phase III or IV trials meeting the above criteria and involving little or no investigator involvement in the conception or development of the protocol. However, the University reviews patent terms on a case-by-case basis and prefers to do so with a thorough understanding of the work contemplated.

SUBJECT INJURY
As a matter of University policy, in the case of subject injury resulting directly from study drug administration or study procedures carried out in accordance with the sponsor-designed protocol, the University will provide reasonably necessary medical treatment. University policy specifically prohibits billing the subject or a third-party for the costs of treating such injuries. Therefore, the University requires reimbursement for the cost of such treatment from the sponsor. Human subject welfare is a primary concern for the University and exceptions to these terms cannot be accommodated.

INSURANCE
To support the above indemnification the sponsor must maintain a sufficient level of insurance.

The University of California is self-insured and during the term of the agreement will maintain in force adequate insurance to cover its indemnification obligations.

GOVERNING LAW
The University of California is a constitutional corporation of the State of California and contracts accepted by the University also will be interpreted under California Law. The University will also consider contractual silence regarding this issue, but cannot negotiate any other terms.

TERMINATION
Generally, either party must have the ability to cancel the agreement by giving reasonable notice. In the event of premature termination, the University will seek reimbursement from the sponsor for all costs and uncancellable obligations incurred up to the termination date. In addition, untimely withdrawal from the protocol could jeopardize the welfare of human subjects. Therefore, the University requests that the sponsor cooperate with the University to safely withdraw subjects from the protocol should thirty days notice not be sufficient.

USE OF NAME
California Education Code Section 92000 prohibits the use of the University’s name to suggest that it endorses a product or service. A sponsor may use the University’s name to fulfill their obligations as required by law, or by otherwise requesting prior written approval from the University.

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