William Norman Birkett

I do not object to people looking at their watches when I'm speaking.

But I strongly object when they start shaking them to make sure they are still going.

William Norman Birkett

April 14, 2009

Bradley Merrill Thompson

Sponsor-CRO Relationships: Managing Risk

3

Topics

1. ABCs of CROs2. Planning3. RFP and Due

Diligence4. Contracting5. Execution of Work6. Evaluation7. Take Aways

I feel like Zsa Zsa Gabor’s fifth husband. I know what I'm supposed to do

but I don't know if I can make it interesting. Al Gore

4

It’s good to know the basics

politicalhumor.about.com

6

SMOs Defined

– What is a Site Management Organization (SMO)?

o A person that is retained as an independent contractor of the principal investigator or research site to provide administrative support of the conduct of the study, such as recruitment of the subjects, collection and preparation of the study data and reports for submission to the sponsor.

o A CRO may perform SMO functions

o Definition based on agency relationships

7

CROs v SMOs

Sponsor

Sponsor’s Agent (CRO)

Researcher’sAgent (SMO)

Research Site/

Investigator

9

Topics


Diligence4. Contracting5. Execution of Work6. Evaluation7. Take Aways

I've often wondered how some people in positions of this kind . . .

manage without having had any acting experience.Ronald Reagan

12

Potential Risks of Outsourcing to CROs

– Risks generally associated with reduced control of the clinical trial process by the Sponsor

– Risks include:

o Delays in completion of studies

o Lost or poor data

o Regulatory infractions produce indirect consequences

FDA regulations/GCPs

HIPAA

Fraud and Abuse

o Private litigation exposure

13

Weighing risk can be tricky

www.txrollergirls.com

14

Delegation of Authority to CRO

– Sponsors may delegate responsibility for regulatory obligations to a CRO

– However, device sponsor remains liable – This is different from the drug world, where

the drug regulations contemplate that sponsors may transfer regulatory obligations to CROs such that they assume regulatory liability

– FDA may be coming out with guidance in this area

15

Delegation of Authority to CRO

– CRO may have important role in meeting regulatory responsibilities, even though obligation is not “transferred” to CRO

– Example: Adverse Event Reporting o Sponsor retains responsibility to report to

investigators and FDA, and the regulatory liability for failure to do so

o CRO may still be responsible for: Reporting AEs to Sponsor Drafting AE descriptions Providing summary reports of AEs Following up with sites to ensure complete AE

information is obtained Safety database maintenance and/or

reconciliation- These responsibilities should be described in

the Work Order

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Shares common goal/objectives

Engages in joint strategic planning

Forms relationship-based structure

Makes open-ended agreements

New business forms

Strategic Alliance

Preferred Supplier

Establish core team Builds collaborative

mechanisms Develops

understanding of client’s customers

Incorporates client into strategic planning

Assigns dedicated relationship management

Makes directed investments

Builds collaborative mechanisms

Partnership

Source: August 2004, Goldman Sachs Research

Traditional Pattern of Outsourcing Integration

Responsiveness to requests

Transactional

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Checks and Balances

Primary Vendor Secondary Vendors– Clinical research

operations Protocol Development Site/Investigator

Recruitment and Selection Personnel Training Clinical Trial Management Data Analysis Medical Writing Processing and Preparing of

Regulatory Filings and liaison with Regulatory bodies

– QA and QC

– Monitoring– Systems auditing– Trial auditing– Contract

negotiations

18

Topics


Diligence4. Contracting5. Execution of Work6. Evaluation7. Take Aways.Politics gives guys so much power that

they tend to behave badly around women. And I hope I never get into that.

Bill Clinton

19

CRO Selection

– Business and legal risks will be minimized when the Sponsor-CRO relationship is based on open communication and trust

– Imperative that Sponsor adopt a CRO selection process that assesses:

o Expertise: Does the CRO have the expertise to undertake duties Sponsor desires?

o Compatibility: Can the CRO fulfill its duties in manner that is compatible with the Sponsor (i.e., is there a good fit)?

o Capacity: Does the CRO have the ability to commit the manpower and resources needed in the Sponsor’s timeframe?

o Price: Does the CRO provide services at same price as competitors? If not, what added value is being offered?

20

CRO Selection

– Sponsor usually conducts an RFP process tailored to the specific trial at hand

– Sponsor’s due diligence should include: o Web research o Public directorieso Careful analysis of Responses to RFP o Interviews with operational leaders o Site visits

– Information gleaned by Sponsor during the CRO selection process should be communicated to counsel to ensure that CRO’s verbal claims are reflected in the CRO contract

21

QA Questions to Ask

– How does the CRO measure quality?– What CRO processes are in place to

continually monitor quality?– What is the size of the CRO quality

assurance (QA) department? – What internal QA procedures are in

place? For example, does QA audit studies independent of sponsor-CRO contract, as part of internal CRO quality control?

Winther

sblumer

see beottom of slide: Winther??

22

Quality is important

www.spelrite.com

23

Topics

1. ABC of CROs2. Planning3. RFP and Due Diligence4. Contracting

a. Risks to manageb. Metricsc. 3rd Party Agreementd. Change Orderse. Staffing Issues

5. Execution of Work6. Evaluation7. Take Aways

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A lot of this is obvious

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Common Project Risks

– Inefficiency and quality issues from staff changeover or inexperience

– Delays in site initiation– Delays in patient recruitment– Difficulties with management of clinical

trial supplies– Issues with vendors– Delays with the processing of CRFs– Utilization of resources at a level that

exceeds the budget– Delays in obtaining regulatory and IRB

approvals

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Factors Most Often Causing Study Delays in the U.S.

38%

31%26% 24% 24%

0%

25%

50%

75%

Contract/budgetnegotiation &

approval

Patient recruitment& enrollment

Protocolamendment &

refinement

Legal review &approval

Review & approvalof consent form

Source: Thomson CenterWatch 2007 Survey of 522 Investigative Sites in the U.S.

27

Expect the Unexpected

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Topics

1. ABCs of CROs2. Planning3. RFP and Due Diligence4. Contracting


5. Execution of Work6. Evaluation7. Takeaways

My mother never saw the

irony in calling me a son-of-

a-bitch.

Jack Nicholson

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CRO and Sponsor Relationships

– Transparency of performance builds trusto Assures alignment on study qualityo Provides tools for proactive and

focused management of issues early so they don’t become bigger problems

o Allows for shared consensus on steps for resolution

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CRO EngagementCRO Engagement

RFP and Due Diligence

Contracting Execution of work

Evaluation

Metric Creation

Key Performance Indicators

Critical Success Factors

Specific Performance Indicators Discussion

Senior Committee

Junior Committee Discussion

AnalysisMeasurement

Feedback & Adjustment

Feedback

Planning

Metric UseMetric Use

Metrics in a CRO Relationship

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Make metric development collaborative

www.bp3.blogger.com

32

Key Metrics for Early Identification of Project Risk

Clinical Operations

• Start-up metrics

• Enrollment metrics

• CRF backlog

Data Management

• Data entry

• Data review

• Data quality

Varawalla

33

Example Metric Definition Table

KPIRelated Metrics Definition

Data Source

Target*

Achievement of key project timelines

Final protocol to first patient recruited

Number of days from final protocol approval by sponsor to first patient enrolled at first site

Clinical trial management system (CTMS)

60 days (mean); 90 days

(oncology)

Visit data to lab data available in database

Average number of days from patient visit to lab data available in CDMS

Clinical data management system (CDMS)

5 days

*All days specified are elapsed timeCuddigan & King

34

Example Metric Definition Table, contd.

KPIRelated Metrics

DefinitionData

SourceTarget*

Last patient last visit (LPLV) to database lock

Number of days from LPLV at site to database locked

CDMS 5 days

Database lock to final study report

Number of days between database lock and final approval study report

CTMS 21 days

*All days specified are elapsed time Cuddigan & King

35


KPIRelated Metrics Definition

Data Source

Achievement of target quality standards

Database error rate

Number of database errors found on database audit/total number of data fields audited

Data manager

Percent of non-performing centers

Percent of sites enrolled that recruits 1 subject within one month of initiation visit

CTMS

Cuddigan & King

36


KPIRelated Metrics

DefinitionData

Source

Compliance with agreed contract value

Final actual contract cost as percent of initial contract value

Total project fees after final invoice paid, compared with initial contract value (includes pass-through costs)

Finance

Number of change orders

Number of change orders approved after initial contract sign-off

Finance

Cuddigan & King

37

CRO EngagementCRO Engagement

RFP and Due Diligence

Contracting Execution of work

Evaluation

Metric CreationMetric Creation

Key Performance Indicators

Critical Success Factors

Specific Performance Indicators Discussion

Senior Committee

Junior Committee Discussion

AnalysisMeasurement

Feedback & Adjustment

Feedback

Planning

Metric UseMetric Use

Metrics in a CRO Relationship

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Utility in Managing Sites

Compare sites on the basis of:– Subjects (overall enrollment, enrollment

per month, screen fail rate, dropout rate)– Start up (contract completion time,

document completion time)– Data (query rate, query completion time)– Money (overall cost per patient,

advertising cost per patient)

Winter related injuries occur more often in the winter.-newswoman for WHIZ-TV, Zanesville, Ohio

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How Do We Use Metrics?

– Just as you would internally, for performance management

– Dispute Resolution (later)– Contractually in a few cases

o Contractual management process and dispute resolution

o Contractual rewardso Contractual penalties

40

Topics




Attorney: Now doctor, isn’t it true that when a

person dies in his sleep, he doesn’t know about

it until the next morning?

-testimony from court records

SPONSOR

SUBJECTFDAIRB**

DSMB, MRC, etc

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)

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Ability to Bind Sponsor to CTAs

– Sponsor may want CRO to handle CTAs because of:o Speed

o Cost

o Strength of CRO’s relationships with research sites/investigators

– However, sponsors may have problems with CROs protecting sponsors’ interests o CRO sometimes want to get contract in place

quickly and not expend resources in lengthy negotiations

o CRO may not have adequate legal expertise

43

Ability to Bind Sponsor to CTAs

– Contractual controls: Range of Possibilitieso CTA templateo CRO authority to negotiate

Only extends to certain provisions Sponsor provides approved fall back

language and negotiation guidance/instruction

CRO must submit all changes to Sponsor for review and approval

o Notification of changes and amendments

44

Topics

Attorney: You say the stairs went down to the basement?

Witness: Yes.Attorney: And these stairs, did they

go up also?-testimony from court records




45

Change Orders

– Statement of Work sets forth services to be provided by CRO o Services beyond or different from SoW are

generally subject to a “change order” – Points to consider

o Require signed change orders before implementation that might affect the budget– Require CRO to notify you if your instructions would

have the effect of changing scope Absent such notification, preclude cost recovery

o CRO must prepare the change order and describe in detail changes to scope, timing, costs, personnel, etc

o CRO agrees to not unreasonably refuse change order Remember, you’ll always get a better price if you

address issues upfront, before need for change order

46

Topics




Democracy used to be a good thing,

but now it has gotten into the wrong hands.

-Senator Jesse Helms

47

Personnel

– Experience & qualification of CRO personnel varies widelyo Educational backgroundo Therapeutic area experienceo Monitoring experienceo Trainingo Accreditation (e.g. ACRP, SoCRA)

– Study personnel change frequentlyo Advancemento Turnovero Re-assignment

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Managing Personnel

―Specify minimum qualifications.―Change control. Retain the right to

approve at least key personnel, including additional or replacement personnel

―Costs of change. Consider specifying training requirements for the study team, including any replacement personnelo Cost of study-specific training typically

included in the budget o Training of replacement personnel may

generally be allocated to the CRO

– Reduce impact. Institutionalize communication, documents and systems to reduce dependence on outstanding people

49

Topics

1. ABC of CROs2. Planning3. RFP and Due Diligence

4. Contracting5. Execution of Work

a. Communications b. Monitoring performancec. Red Flagsd. Dispute resolution

6. Evaluation7. Takeaways

I have always wanted to be somebody. I guess I should have been more specific.

-Lily Tomlin

50

Sometimes the obvious stuff escapes us

Farm1.static.flicker.com

51

Managing Communications

– Poor communication is often cited as a prime reason for frosty relations between CRO and Sponsors

– You need a comprehensive plan:o People

CRO contract should contain an express liaison provision establishing a point of contact for each party

List of all key operations, billing and legal personnel

o Structure Provide for basic joint committee structure

o Frequencyo Form (e.g. meetings, conference calls,

written and other content issues)

52

Topics


5. Execution of Worka. Communications b. Monitoring performancec. Red Flagsd. Dispute resolution


53

Monitoring Performance

– Monitoring reports should beo Submitted by CRO timelyo Reviewed by sponsor timelyo Resolved timely, including evaluation and

escalation, if necessary, of reported protocol violations and other non-compliance

– Contract language should address thiso Commitmentso Metrics

54

CRO Progress Reports

– In the agreement, require written progress reports at regular intervals

– Budget for frequent status calls between sponsor and CRO

– Topicso Contract statuso IRB approval statuso Site initiation/monitoring/close-out visitso Enrollmento Issues/concerns of sponsor or CRO (e.g. CFR

completion or protocol noncompliance concerns that may require clarification to study team and/or sites, AE trends, other problems with sites)

55

Topics

1. ABC of CROs2. Planning3. RFP and Due Diligence 4. Contracting5. Execution of Work



56

Watch for Red Flags

– Selection of inexperienced investigators by the CRO

– Questions from study site directed to sponsor– Inadequate or untimely monitoring reports– Enrollment of patients who don’t fit criteria– Higher screening-to-enrollment ratio at one

site than others– Frequent rescheduling of meetings and reports

by CRO– Delays in cleaning up CRFs– Delays in adverse event reporting– Changes in CRO personnel– Unscheduled request for payment by the CRO

Vogel

57

Compliance isn’t always easy

www.mustreadblogs.blogspot.com

58

Scope creep

– If you have fee for service or unitized costs--o Limit. Use limits on unitized costs (e.g.

not to exceed without approval)o Monitor. Be proactive in monitoring

“scope creep” Be cognizant of

– Your instructions as the sponsor– CRO activities; example: Repeated monitoring

visits» Site uncooperative? If so, WHY?» CRO personnel inexperienced, untrained?» If/when will you bear the costs?

o Communicate. If unsure, ASK – better than being surprised later

– Ties back to change control

59

Topics


4. Contracting5. Execution of Work



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Make sure materials are clear

– Make sure materials are clear (contract, statement of work, budget, payment schedule, etc)

– Good dispute resolution process that allows o Discussion among

joint committees and

o Business escalationwww.robertstevensonfiles.com

61

Payment Terms

– CRO should remain cash neutral: not a bank

– Negotiate payment for performance, including milestones and deliverables

o Clearly define “delivery” and “completion”

o Remember, “milestones” link back to work order – what is the plan for arriving at the milestone?

– Make delivery of data independent of payment

o Sponsor timeframes can move forward even with a payment dispute

o CRO will want limitations on liability, such as limiting damages to contract price, not actual damages due to delay

o If CRO does withhold data to secure payment, the CRO opens itself up to actual damages—the limitation is lost

62

Make lemonade out of lemons

Mchenrycountyblog.com

63

Topics


4. Contracting5. Execution of Work6. Evaluation7. Takeaways

Lawyer: "You don't know what it was, and you didn't know what it looked like,

but can you describe it?"

64

Post Study Learning

– Review the performance of:o The CROo Other third partieso The sponsor

– What unexpected problems were there, and how can they be better managed in the future?

– How can operations be improved, including communication?

– Channel that learning back to the contracting and operations units

Capitalinsight.com

65

Topics


4. Contracting5. Execution of Work6. Evaluation7. Takeaways

Counsel: Are you qualified to give a urine sample?

Witness: Yes, I have been since early childhood.

66

Takeaways

– Establish realistic objectives and expectationso Understand your internal capabilities and advise

the other party accordingly

– Budget early, and well– Deliberately --

o Establish clear lines of communications between parties and

o Identify liaisons

– Use contract templates with cautiono Do templates contain party’s wish list or

minimum requirements? o Review/update templates periodically, particularly

MSAs

67

Different Cultures, Different Rules

www.break.com

Questions?

Two lawyers were out hunting when they came upon a pair of tracks. They stopped and examined the tracks closely.

The first lawyer announced, "Those are deer tracks. It's deer season, so we should follow the tracks and find our

prey."

The second lawyer responded, "Those are clearly elk tracks, and elk are out of season. If we follow your advice, we'll

waste the day."

Each attorney believed himself to be the superior woodsman, and they both bitterly stuck to their guns.

They were still arguing when the train hit them.

Documents

William Norman Birkett