Contracts in clinical trials in emerging region: Asia Pacific

Tarun Pandotra

PRA International

The keys to successful clinical trial budget and contract negotiations are internal planning, a knowledge of finances and regulations, and flexibility, says Tarun Pandotra. Working closely with sponsor or CRO will help streamline the negotiating process and open the door to future opportunities for participation.

There are many things to plan when considering to conduct a clinical trial. Not so long ago contract was one of the most neglected parts of the trial set-up, often arranged at the last minute. As the awareness about the clinical trial is increasing the parties of the clinical trial agreement are becoming more critical about it. There are various types of contracts involved in clinical trials.

According to ICH-GCP, “a contract is written, dated and signed agreement between two or more involved parties that sets out an arrangements on delegation and distribution of task and obligations and if appropriate, on financial matters. The protocol may serve as the basis of contract”.

On an industry-wide basis, clinical trials often fall behind their timelines from the very beginning — during protocol development, site selection and study start-up. Assessment of site feasibility, negotiation of contracts and budgets, planning for patient recruitment, legal reviews and approvals by institutional research boards (IRBs) and / or ethics committees all take considerable time and effort.


“On an industry-wide basis, clinical trials often fall behind their timelines from the very beginning…”


Research suggests that each of these steps can cause delay, with contract and budget negotiations, and patient recruitment leading the pack. Contract and budget negotiations and approval are responsible for 49% of study delays, followed by patient recruitment, which causes 41% of delays.

Specifically, in relation to an investigator (site) contract, it is a binding agreement documenting the relationship between the sponsor, CRO (if applicable), and the site and / or principal investigator. It has to detail all provisions on how the parties co-operate for the given services, how any related payments schedule works and has to be in place before such service starts. It is therefore one of the most important legal documents in a clinical trial, alongside the study protocol and investigator’s brochure. Bizarrely, not so long ago, this was one of the most neglected parts of the trial set-up, often arranged at the last minute. Luckily time is changing and players in the clinical research field have increasingly realised this.

Types of contracts typically used in clinical research includes contract between sponsor and CRO, vendor contracts, sub-contractor contracts and site contracts.

Sponsor – CRO contracts

Here is a list of the types of Sponsor – CRO contracts typically used:

• Fixed price contracts, where in the CRO receives a fixed price for service rendered. CRO receives a milestones payment at designated time points and / or milestones during the projects. Here is an example:

o 50% CRFs retrieved

o 50% of IMV completed

o All sites initiated

o All patients enrolled

Time and materials contracts, where in the buyers pays the CRO’s time spent on each activity. Example: Nurse’s hours in phase I unit

Unitized contracts, Budget is broken into a series of tasks (units) with labour estimates and dollars associated with achieving each unit. Sponsor pay only for units actualized during the project. Unit grid represents current signed contract. Labour represents the amount of each type of position allocated monthly based on projected achievable units

From the moment a contract is awarded to a CRO, the sponsor wants the service provider to start. ‘Contract award’, however, rarely means having the contracts fully signed and lengthy negotiations might still lie ahead before work can start. Not having a written agreement in place leaves both contracting parties vulnerable and vendor increasingly demand some sort of the document fully signed before actions commence. A letter of Intent (LOI) is an agreement often used in these situations, covering imminent activities and usually referring to main contract as a future comprehensive agreement. The main provisions of the two agreements are typically harmonized. LOI has its limitation, e.g., in terms of subcontracting with clinical sites because these cannot be fully executed without a fully signed sponsor-CRO agreement in place.


“Having as many variations of requirements as there are countries sours the life of the brave clinical trials professional setting out to conduct studies across Asia Pacific.”


In order to speed up the contracting process, another option for sponsor is to have a Master Service Agreement (MSA), which is a form of umbrella contract giving general terms and conditions between contracting parties and which aim to cover the main aspects of individual trial agreements. This is practical when parties aim to conduct several trials in co-operation. The individual study specific contracts will still have to be negotiated, including study specific aspects, but the work can start before individual agreements are finalised because the legal framework for the agreement is covered in MSA.

Site contracts

Site contract is at least as complex as Sponsor – CRO contracting, albeit in a different way. Having as many variations of requirements as there are countries sours the life of the brave clinical trials professional setting out to conduct studies across Asia Pacific.

Firstly, there are countries where CROs have to contract with an institution, with the sponsor also having to be a signatory on the contract.

There are few countries where the contract process is very simple, such as Singapore, Korea and the Philippines.

Then there are other, more complicated environments such as Hong Kong, where the hospital authority plays a vital role. They have their own templates and sponsor has to adhere to those templates in order to proceed.

In some instances, the site agreement is even more complex as it might be required that Sponsor – CROs contract with each ancillary department or site member separately, in individual contracts. One such country is Thailand, which has a unique agreement called a Material Transfer Agreement (MTA). The MTA has to be executed before the Clinical Trial Agreement. This requirement makes contracting more complex and lengthy.

Whatever the requirement regarding the identity of the contracted party or signatory, the contract has to contain standard provisions on:

• Patient protection

• Data protection

• Inspections / audits

• Intellectual property

• Publication

• Trial specifics

• Liabilities

• Financial disclosures

• Payment terms, which also have to include patient travel, screen failure, payment for equipment, exchange rate agreements and where the money is to be paid (including country)

Rate-limiting steps

In set-up of a clinical trial, there are many rate limiting steps, including contracting process. The best practice therefore is to start contract negotiations as soon as possible, involve key parties in negotiation very early, even aiming to have budget finalized by the time protocol is finalized. In some countries, a fully signed contract is required before the ethics committee (EC) submissions can be made. Other countries are different. EC and / or institution approvals may have to be in place before contracts can be signed (e.g. South Korea, Hong Kong, Thailand etc…).


Figure 1: Tarun’s list of usual suspects when it comes to countries that are slow, improving or quick on the uptake of new contracts

Some countries require the contract in local language (e.g. China, South Korea) which must be factored in during / after negotiations. In addition, where CRO negotiates the contract on behalf of sponsor, the CRO needs Power of Attorney (PoA) and also the sponsor is required to review and approve the contracts before sign-off, which also extends the timelines. Apart from a few fortunate cases when there is a country-wide model contract template which parties accept without changes, all signatories would probably involve legal review to assure their interest are protected, adding further to time taken to finalize the contract. Add to this scenario where the contract is negotiated through multiple countries (e.g. US sponsor, a UK CRO and a South East Asian site where, before contracting you might also need a hospital director’s approval, who might be on holiday for several weeks) and you have the one of the most testing study set-up challenges of your clinical research professional life, equal to white-water rafting in adrenalin rise!


“Some countries require the contract in local language (e.g. China, South Korea) which must be factored in during / after negotiations.”


Things can go wrong in several areas:

Even when parties negotiate within the same countries, lawyers are usually employed for the review of terms. If the negotiations are between countries where the language is different, then translations might be faulty, negotiations (queries / replies) might be misunderstood, changes in law might occur which need to be informed, understood and interpreted. All of these add to the difficulty and ultimately the length of time spent achieving the agreement.

A good tool to overcome at least some of these set-backs is for Sponsor / CROs to develop country-specific contract templates and review them periodically (e.g. bi-annually) to make sure adherence to regulatory / statutory changes.

There might be changes in requirements in one country, which could also be considered across all contracts.


About the author:

Tarun Pandotra is a clinical operation professional with over sixteen year’s experience of clinical research in project management, clinical operations and regulatory affairs roles. Involvement in phases I – IV with experience from study start up through to close out. Tarun has a wide experience of therapeutic area indications most recently in oncology, hematology and cardiology.

Tarun has worked with many pharma companies like AstraZeneca, UCB Pharma and CROs like PPD and PRA. He is currently working as Director Clinical Operations India and South East Asia.

He has extensive international experience, with commitment to delivering quality results, establishing ethical guidelines, and motivating staff for peak performance and program success.

You can find Tarun on LinkedIn.

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