UPDATED August 13, 2018: Bill Limiting Non-Compete Agreements Is Now Massachusetts Law

UPDATED on August 13, 2018:

Non-Compete reform has become Massachusetts law.

On Friday, August 10, 2018 Governor Charlie Baker signed “An Act relative to the judicial enforcement of noncompetition agreements” regulating the use of non-competition agreements and limiting the ability of employers to enter into and enforce non-compete agreements with Massachusetts employees. This new law is scheduled to take effect on October 1, 2018 and promises a changing landscape for Massachusetts businesses.

We look forward to helping our clients respond to the new regulations. Please contact our office with any questions concerning the enforcement of any currently-existing consulting agreements or ensuring the compliance of future agreements.

Originally Published on August 1, 2018:

Massachusetts Legislature Passes Non-Compete Reform – Next Stop is Governor’s Desk

In negotiations extending into the late-night hours, Massachusetts lawmakers passed a bill reforming non-competition agreements just before the midnight deadline. The bill, entitled “An Act relative to the judicial enforcement of noncompetition agreements”, has been sent to Governor Baker’s desk for signing. If signed within the next ten days, the act regulating the use and enforcement of non-competes will take effect in October 2018. We will be watching the State House closely over the next few days and will announce the signing of the bill when and if it occurs.

Originally Published on July 27, 2018: An economic development bill restricting the use of non-compete agreements has passed both the Massachusetts Senate and House. The bill, which limits the restrictions that employers may place on workers leaving to join competitors, has gone to conference committee where it must be hammered into final form. Legislators in both chambers must vote on the bill before the close of the legislative session at midnight on July 31, 2018.

Contracts Associates will monitor new developments related to this bill. If the legislation is enacted, we’re prepared to advise on the effect the changes will have on the enforcement of consulting agreements currently in place, as well as suggest any necessary changes to contract templates.

Sidestep FDA Form 483—And The Resulting Setbacks

Bringing a new drug or medical device to market is incredibly exciting for any sponsor. Ideally, you’d like the clinical trial phase to proceed without delays, so you can get your new drug to market quickly—and start helping patients.

The FDA can issue a Form 483 after an inspection where an investigator has observed conditions or issues at a facility that might constitute violations of the Food Drug and Cosmetic Act and serves to alert the organization’s management. As a best practice, if issued a 483, companies or research centers should respond in writing without delay. The response should include a corrective action plan addressing the violations which the organization should immediately implement. Failure to respond or failing to take remedial measures could result a Warning Letter being issued by the FDA, or cause delays in studies and development.

The FDA maintains a list of Inspectional Observation Summaries broken down by program area (biologics, bioresearch monitoring, drugs, devices, etc.) which can be found on the FDA website. By viewing this data, sponsors, clinical sites, CROs and IRBs have the opportunity to learn the most common reasons for 483 and how to avoid similar pitfalls during the clinical trial process.

For example, in the program area of Bioresearch Monitoring, 248 Form 483s were issued between 10/1/2016 and 9/30/2017. Common reasons for the 483 include:

• An investigation was not conducted in accordance with the signed statement of investigator and/or investigational plan (frequency: 140 times)
• Failure to prepare or maintain adequate and/or accurate case histories with respect to observations and data pertinent to the investigation and/or informed consent (76 times)
• Informed consent was not properly documented in that the written informed consent used in the study was not approved by the IRB and/or was not signed by the subject or the subject’s legally authorized representative at the time of consent and/or was not dated by the subject or the subject’s legally authorized representative at the time of consent. (14 times)

Stick to the plan

An investigational plan forms a roadmap for any clinical trial, giving a brief overview of the type and scale of the study. Mandated by the FDA, it’s the outline that gets a trial from start to finish: quickly and safely. Sponsors and investigators must either stick to this plan, properly amend it—or risk receiving a Form 483.

An investigational plan is detailed and thorough, but a sponsor won’t typically be on site to ensure it’s being followed. As such, it’s important to know that your contracts and terms with your CROs are solid and equitable. Failing to review contracts could leave you open to both liability and FDA delays. Our attorneys possess the necessary industry experience and a meticulous, efficient approach to contract reviews which means sponsors can be confident that they’re protected should an investigational plan go awry.

Let the record show everything

To gain the best results from a trial and to pass inspections, meticulous record keeping is a must. Much like an investigational plan, proper record keeping requires diligence and thoroughness. It involves preparing and maintaining case histories and taking detailed documentation at every stage, from observation to delivery. Failing to properly monitor and maintain records for a trial isn’t just a common reason for a Form 483, but can also compromise the study.

Contracts Associates will ensure that each sponsor/CRO agreement includes detailed language about monitoring and record keeping. The agreement is intended to protect the sponsor in the event your CRO fails to keep proper records. Working with us will allow sponsors to harness our knowledge and expertise, which means you won’t have to worry about this type of exposure.

Obtain informed consent

The FDA doesn’t just monitor the safety of publicly available drugs or devices. It also monitors the safety of clinical trial participants, and obtaining informed consent is a core element of that.

Sponsors must ensure trial participants know their rights in relation to a clinical trial they’re considering. This includes exposure to unknown risks, possible side effects, and potential outcomes. Ensuring that your study is compliant with FDA regulations about informed consent is crucial to keeping your company protected and ensuring your milestones are met.

Your in-house counsel might not have the time or manpower to carefully review a trial’s informed consent forms before signing off on them. The attorneys at Contracts Associates can provide the additional assistance you need, on an as-needed basis. We can help you stay on schedule and ensure compliance with informed consent requirements. There’s no better plan than to have informed consent contracts reviewed quickly and thoroughly by experienced industry professionals like us.

Implications of Form 483

It’s important to keep in mind that Form 483 does not constitute the final Agency determination of whether cited conditions are absolute violations of the FD&C Act. Form 483 is a factor for consideration, along with all evidence or documentation collected on-site, and any responses made by the company. Only then does the FDA make a final determination as to what future actions might be necessary.

Proactive approaches with Contracts Associates

At Contracts Associates, we work with sponsors to ensure their clinical trials don’t fall behind schedule or expose the company to undue risk. We can even produce and maintain a personalized “risk register” for you, complete with contract terms and other matters that we become aware of in our reviews—helping you avoid future problems.

Our extensive industry experience means we don’t require training—or the time, cost, and effort associated with a learning curve. We provide quick and meticulous turn-arounds, and can help you meet your milestones. Contact us today to find out how we can help you.

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.

 

 

 

Sage Therapeutics, Esperion Therapeutics, and Eisai won MAGI Awards for Excellence in Site Payments

The results are in, and our clinical sites have agreed on the list of Industry “power payers” for 2017. From Norm Goldfarb at MAGI:

At MAGI’s recent Clinical Research Conference in San Francisco, Sage Therapeutics, Esperion Therapeutics, and Eisai won MAGI Awards for Excellence in Site Payments, powered by Forte.

MAGI also recognized AbbVie, AstraZeneca, Gilead Sciences, Merck Sharp & Dohme, Novartis and Plexxikon for timely payments.

Clinical research sites want to conduct studies for these companies because they know they will be paid in a timely manner. To learn more, click here.

As of the date of the withdrawal of the UK from the EU, active substances manufactured in the UK will be considered “imported” active substances and other headaches

The European Medicines Agency issued a Q&A to address some Brexit issues that will directly impact US sponsors/manufacturers.

The EMA offers no specific guidance on the transfer and/or handling of clinical trials that are ongoing on the date that the UK leaves the EU, but the guidance does give us an idea of how complicated this is all going to be. Nota bene the issue caused by having one’s Qualified Person in the UK (which is 98% of US manufacturers, followed only by QPs in Ireland). We will continue to follow the EU’s guidance and will craft our EU contracts in such as way as to make the transfer as painless as possible.

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.”.

OIG Issues 2016 Final Rule Expanding Anti-Kickback Statute Safe Harbors; Excludes Pharmaceutical Manufacturers From Most Of Them

Our read of 81 Fed. Reg. 88368 (December 7, 2016), issued by U.S. Department of Health and Human Services’ Office of Inspector General (OIG), does not appear to affect pharmaceutical manufacturers in any substantive way; our obligations are unchanged and no additional “safe harbors” are afforded.

The OIG did make a technical correction to the safe harbor for referral services, which we believe requires an update to the “anti-kickback and fair market value” clauses in our clients’ templates. We’ll be using the italicized text below, from this point on:

Vendor represents and warrants that neither Vendor nor any individual or entity acting on Vendor’s behalf, nor any payee under this Agreement, will, directly or indirectly, offer, pay or accept, or authorize the offering, payment, or acceptance of, any money or anything of value to or from any third party, with the knowledge or intent that the payment, promise or gift, in whole or in part, will be made in order to improperly influence an act or decision that will assist Vendor, the Sponsor or the third party in securing an improper advantage or in improperly obtaining or retaining business or in improperly directing business to any person or entity.

Further, the parties acknowledge and agree that the amounts payable by Sponsor or Sponsor’s designee under this Agreement represent the fair market value of the covered costs associated with the Services and no part of any consideration paid hereunder is a prohibited payment for the recommending or arranging for the referral of business otherwise generated by either party for the other party or the ordering of items or services; nor are the payments intended to induce illegal referrals of business.

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!