U.S. Clinical Trial Sponsors Are Unprepared for New EU GDPR Regulation

As of May 25, 2018, U.S. sponsors of clinical studies conducted in the European Union must be in compliance with the EU’s new General Data Protection Regulation (“GDPR”) or risk the possibility of significant fines.

U.S. sponsor companies must contend with this new EU regulation and the learning curve will likely be steep—especially as the GDPR requirements contrast sharply with the U.S.’s lack of any meaningful privacy regulation.

Companies found to be in non-compliance with the GDPR risk significant fines – possibly up to 4% of total worldwide annual turnover of the preceding financial year or 20 000 000 EUR, whichever is larger. The GDPR applies to the processing of personal data which includes subjects’ names, addresses, medical information, and more—regardless of whether the processing takes place in the EU or not.

We expect that our clients will be particularly impacted by the provisions related to the stringent, new contractual Informed Consent requirements for terms concerning use of bio specimens.

The GDPR also mandates the appointment of a senior-level Data Protection Officer with expertise in data protection law. This DPO will report directly to a C-suite executive. The law also requires companies to comply with certain processes for data protection and data management.

Contracts Associates is prepared to help your company successfully navigate this new regulatory framework. Our team of attorneys can help minimize the risk of penalties by updating your contracts to ensure that all informed consent language is GDPR-compliant with regard to sample and data usage. We will help your company uphold its legal duties and obligations to EU sites and vendors by drafting new contract template terms as needed. We encourage you to start your GDPR-compliance planning by contacting our office at 781-598-8000 or emailing our CEO, Colleen Sproul, at cms@contractsassociates.com

 

FDA suddenly adds four-letter meaningless suffixes to new biologics’ nonproprietary names

Back in 2015, the FDA implemented a policy which required the addition of suffixes to biosimilars. On June 1 2016, the FDA suggested that sponsors could provide the FDA with up to 10 preferred proposed suffixes for its biosimilars and that the FDA would then choose which preferred suffix met its guidelines. Sounds like a good policy, right? Companies get to suggest their favorite “baby” names and the FDA picks one it likes. Well, the FDA withdrew that plan on June 20, 2016.

However the suffixes for biosimilars have been chosen since June 2016, it was clear that the FDA only applied this requirement for suffixes (which makes sense for biosimilars, so that consumers can tell them apart and doctors can report adverse events) to biosimilars. For example, Sandoz’s Zarxio’s nonproprietary name is “filgrastim-sndz”. Totally logical so far.

On November 16, 2017, the FDA approved Genetech’s hemophilia A biologic Hemlibra (good news for patients!) and assigned it a random suffix of “kxwh” (emicizumab-kxwh).    In the absence of published public comments (which would be published in the Federal Register) and/or the announcement of a policy decision, one has to assume that assigning these suffixes to all new biologics will be the law of the land.

We know the time an effort industry sponsors put into branding their biologics and we imagine that random characters appended to the end of such a carefully-considered name is not the most welcome of surprises. The FDA typically provides sponsors with substantial notice prior to making substantive policy changes (it is a government agency after all!); however, this sort of abrupt implementation of policy may be our new normal.

 

 

 

Obama’s Department of Justice recovers staggering amount of money from Health Care industry

The 2016 numbers are in, and the health care industry (which includes life sciences companies) had to pay out a total of $2.5 billion (more than half of the total $4.7 billion recovered in 2016) in settlements and judgements from civil cases which involved fraud and false claims against the government. Wyeth and Pfizer, Inc. paid $784.6 million of the $2.5 billion; the payments were made to the federal government and to state Medicaid programs.

What I found most remarkable about the DOJ report was that 60% of all funds recovered by the DOJ in last 30 years under the False Claims Act ($55.17 billion), was recovered between fiscal years 2009 and 2016. This begs the question: Why did the Department of Justice under the Obama administration recover $31.3 billion of the total $55.17 billion recovered by the DOJ between 1986 and 2016? Is it the only administration to actively enforce the law and investigate healthcare fraud, housing and mortgage fraud, and fraudulent activities related to federal contracts and programs? Was there just an unprecedented amount of fraud and abuse during the Obama administration? Was President Obama’s Financial Fraud Enforcement Task Force (established in 2009)just incredibly effective?

The second question is: will the healthcare industry and its pharmaceutical and device companies will continue to pay the proverbial lion’s share of monies recovered by the new adminstration?

In case anyone wondered where the recovered funds are diverted to, according to the DOJ, “…The beneficiaries of these efforts include veterans, the elderly, and low-income families who are insured by federal health care programs; families and students who are able to afford homes and go to college thanks to federally insured loans; and all of us who are protected by the government’s investment in national security and defense. In short, Americans across the country are healthier, enjoy a better quality of life, and are safer because of our continuing success in protecting taxpayer funds from misuse.”.

Phase III Clinical Trial Agreements: Ex-US Clinical Sites and FDA Inspections

With increasing frequency, an ex-US clinical site, in Poland or Hungary, for example, will delete all trial agreement references to compliance with FDA inspections (see sample text below), on the grounds that it is not required to comply with FDA inspections and/or is not subject to inspection by the FDA at all. In such cases, the site will seek to replace references to “FDA” with local, country-specific regulatory authorities.  However, foreign sites participating in clinical studies conducted under a FDA IND are subject to FDA inspections, and best practice dictates that the trial agreement should obtain the site’s agreement to notify sponsor’s in the event such an inspection takes place.

Sample ex-US trial agreement clause:

The Institution and Investigator agree that personnel from regulatory authorities including but not limited to the United States Food and Drug Administration Food and Drug Administration (“FDA”) (“FDA”) may visit the Institution to inspect Study records (including portions of other pertinent records for all Research Subjects in the Study) and those procedures, facilities or Study records of any employee, contractor or agent that the Investigator or the Institution uses in conducting the Study. Investigator will notify Sponsor, promptly of any regulatory inquiries, investigations, site visits (whether announced or unannounced), correspondence or communication that relates to the Study and will consult and cooperate with Sponsor in responding to any such event, including providing documents, information and access as properly requested.Institution and Investigator will make all reasonable efforts to coordinate any scheduling of agency inspections to permit Sponsor and its designees to attend such inspections. Institution and Investigator will make reasonable efforts to segregate, and not disclose, any Records or other materials, correspondence and documents that are not required to be disclosed during such an inspection, including financial data and pricing information.  If the EC or any Regulatory Agency issues any notice, warning, demand, report or request related to the Study, Institution or Investigator, as applicable, shall send a copy of such document promptly to Sponsor, along with any proposed response to such document, before the same is submitted to the EC or any Regulatory Agency.”

By was of example, one can click here to view a 2015 Warning Letter, issued to a principle investigator, following a site inspection in France.

Of course, a sponsor may agree to a site request to omit reference to compliance with notification of an FDA inspection (remember, sponsors “audit” but the FDA “inspects”; the FDA does not “audit”, even though many in the industry use the terms interchangeably) in an effort to finalize the agreement in a timely manner. Our role at CA is to advise that the FDA can inspect any foreign site on a clinical study and we strongly urge sponsors to obtain a site’s agreement to be given immediate notice of any regulatory inspection during the study.

 

 

 

 

Journal of Commercial Biotechnology

Contracts Associates is proud to announce that Joanna Brougher has been named Editor-in-Chief of The Journal of Commercial Biotechnology .  We at CA will be submitting several articles over the next year or so, in an effort to continue to highlight changes and industry trends that will affect clinical trial contracting best practices.

Please feel free to submit ideas or queries directly to Joanna by emailing her directly at jbrougher@contractsassociates.com.

And I cannot end this post without wishing Joanna well at the USTA 2015 National Championship Adult 18 & Over Championships in Palm Springs on October 9th!

 

 

Random notes from ACI’s Women Leaders in Life Sciences Law Annual Meeting

I had the pleasure of attending the 2nd Annual ACI’s Women Leaders in Life Sciences Law meeting in Boston last week. While I originally registered to ensure that stay on top of the latest developments in the law that affect our Life Science community, I ended up getting a lot more out of the, for lack of a better word, “personal” disclosures, shared by the women leaders who spoke.

There were a lot of interesting exchanges and factoids, among them:

  1. PhRMA has only 30 member companies.
  2. Little-known effect of the ACA: Insurance companies have created “access tiers” for certain health plans so that, while the Affordable Care Act prevents them from denying one insurance for a pre-existing condition, only certain “tiers” will cover high-cost disease states. Consequently, the plan sold to a person who would have otherwise been denied, could cost more. I thought that the whole point of the “non-discrimination” clause was to to ensure :non-discrimination”?
  3. 22 US States have enacted their own, “Right to Try” (Abigail Alliance) laws. These laws allow patients to try unapproved drugs, after a successful Phase 1. There may be conflict with the FDA regs in some states but these conflicts are addressed on a case-by-case basis.
  4. Five countries have enacted or updated new Global Transparency Laws in the  past year. France, Denmark, Slovenia, Romania and Estonia have updated guidelines for paying any health care provider in those countries.
  5. “No. But being the only woman in the room makes people remember you, for a long time”  – Response to the following question, posed to a US District Court Judge, “Have there been any circumstances where being the only woman in the room, in a high-stakes meeting, actually contributed to a resolution or in some way helped further your cause?

There was just not enough time to get into detail regarding those states that have passed “tissue property laws”, which restrict use of research tissue and bestow ownership of the tissues upon, in most cases, the patient, but those have to considered. We at CA will be doing a deep-dive into these new states laws and will provide an analysis here.

Thanks to the speakers who took the time to come to Boston for such a great conference; I am looking forward to next year’s meeting in Paris.

 

 

Thanks To ExL For Another Great Due Diligence Summit!

Day 1 of the Summit was informative and the speaker line up was impressive.  I would especially like to thank Jack Swig from North Shore InnoVentures Incubator for inviting me to run his workshop with him. I’ll be blogging about some of the data from the other presenters that I found most interesting and include a link to my own presentation below.

Legal and Contracting Strategies That Maximize Partnerships and Ensure a Successful Due Diligence Process: Contracts Associates eXl Due Diligence Seminar 2015

One “contracting strategy” that is worth mentioning here, but was not part of my presentation, was Astra Zeneca’s Carl Jessop’s plea to innovator companies: “Please, never sign long-term contracts with your suppliers!” Apparently AZ has its own suppliers, thank you anyway.

The Affordable Care Act – In One Act

We have been asked what might the effect of the US Supreme Court’s upcoming decision on the Patient Protection Affordable Care Act of 2010 (PPACA), might be on our clients. The sections of the law that most impact clinical site and vendor agreements are: 1) Section 6002 which requires industry to report to CMS any payments or other transfers of value they furnish to physicians and teaching hospitals, and 2) the Medicare Secondary Payer Rule for reporting payments for treatment of study subject injuries.  As an industry, we have no way of knowing what effect the outcome of the SCOTUS decision will be but we’ll be paying attention to the impact it will have on these two requirements, specifically.

The US Health and Human Services website has a nice snapshot of PPACA, as it exists today, and I am including it here, as any discussion ultimately devolves into a jumbled dialogue of sorts, that is really just a bunch of talking points that we counter to the best of our knowledge. This is very high level but the full law can be viewed here. Despite the “buzz”, in my opinion, the law is easy to understand. One may fundamentally disagree with certain of its terms but it is an easy read for any native English speaker.

From HHS:

About the Law

The Affordable Care Act puts consumers back in charge of their health care. Under the law, a new “Patient’s Bill of Rights” gives the American people the stability and flexibility they need to make informed choices about their health. View Key Features of the Affordable Care Act or read a year-by-year overview of features.

Coverage

Costs

Care

Content created by Assist. Sec./Public Affairs – Digital Communications Division Content last reviewed on November 14, 2014