Frequently Asked Questions 

1. Question: Negotiating a clinical trial agreement is wasting time and holding up important research. Why can’t we sign the agreement that the sponsor sent out and get on with the study? An agreement is just a piece of paper!
Answer:    But that piece of paper has magical powers.
The magic lies in the fact that if a contract has been validly made, a court can enforce the promises in the contract against the party that made them. A court can require an investigator or institution who is a party to a contract to perform certain kinds of promises (such as a promise not to conduct a clinical trial with any sponsor other than the sponsor named in this contract for a period of five years — don’t laugh, this is an actual promise in an actual clinical trial agreement…name of sponsor withheld for confidentiality reasons but you’d certainly recognize it); or, if the sponsor suffered a loss because the investigator or institution did not perform a promise, the court can require the defendant investigator or institution to pay the sponsor compensation for the loss (this is called “damages”). The court’s order to pay is enforced by the county sheriff and his/her minions. If the defendant investigator or institution — at this point called a “judgment debtor”– or its/his/her insurer, doesn’t pay up in a reasonable time, the sheriff can seize equipment or a building (including a house or cottage) or a vehicle or any other property owned by a judgment debtor and sell it, or can seize money in a judgment debtor’s bank account or RRSP account or investment account, or can force the debtor of a judgment debtor (i.e. an employer or anyone else who owes money to the judgment debtor) to pay that money into court for the benefit of the plaintiff rather than to the judgment debtor (this is called “garnishment”).
This is why it’s very important to make sure you know what promises you’re making before you sign a contract, and to make sure that they’re promises you can carry out. If know in advance that you can’t carry them out, then you have to negotiate to get them changed to promises that you can carry out.

2. Question: Hmm. Maybe I should take this contract thing a bit more seriously. Where can I get an overview of contracts?
Answer: Glad you asked. Go to http://emond.ca/the-contracts-handbook-a-practical-guide-to-reviewing-revising-and-negotiating-commercial-contracts-p.html to find out more about my book The Contracts Handbook: A Practical Guide to Reviewing, Revising and Negotating Commercial Contracts.

3. Question: Does signing a clinical trial agreement make being sued by a patient more likely?
Answer:    No. A patient’s right to sue investigator and institution exists completely apart from the clinical trial agreement.
However signing an agreement gives the other parties to the agreement the right to sue for breach of contract if a party doesn’t carry out the promises he/she/it made in the agreement. To harp on this point, it’s a very good idea to read the contract before you sign it, to make sure that you’re not agreeing to anything you can’t do. If the contract requires you to do something you already know you can’t do, you need to negotiate a change to the contract.

4. Question: I’ve signed all the agreements that the sponsor sent out to me, but I haven’t read any of them, so I can’t be held to them, right?
Answer:   Wrong! If you are of normal intelligence and can read, and had the opportunity to read the contract, you are bound by your signature whether you read the contract or not. The “I didn’t read it” defence only works if you’re blind or illiterate and someone lied to you about what the contract contained, or you’re a very uneducated person who was pressured into signing. The judge will just laugh up her sleeve at a physician or an institutional officer who tries this defence.

5. Question: Do institutions and investigators have insurance coverage to carry out a clinical trial?
Answer:    Institutions should check with their individual insurers.
Physicians are usually members of the Canadian Medical Protective Association (CMPA), which does not call itself an insurer, but says that its members are “eligible to receive a broad spectrum of assistance related to medico-legal difficulties arising from their professional work in Canada.” See the CMPA website at www.cmpa-acpm.ca and contact the CMPA directly for more information.
Physicians usually do not have coverage for either clinical work or research under the insurance policy held by the institution where they practise—check with the institution and its insurer.

6. Question: My eyes glaze over and I start to lose consciousness when I look at the “Indemnity” clause in a contract. What’s that all about (quickly and painlessly if possible)?
Answer:  An “indemnity” at its most basic is a promise to compensate someone else. (An insurance policy is a contract of indemnity.)
The indemnity clause in a clinical trial contract is included to cover the possibility that one or more of the parties to the contract will be sued by someone who is not a party to the contract, most likely about an injury to a trial subject.
If a subject is injured in a trial, there’s a very good chance that the subject, or a family member, will sue the trial sponsor (the pharmaceutical or device company), the investigator, and the investigator’s institution—all three will be defendants in the lawsuit. Under Ontario law, and the law of most provinces and states, if two or more defendants are found by the court to have contributed to the injury of the plaintiff, the defendants are said to be “joint tortfeasors” and the plaintiff can collect the full amount owing by all of the defendants together from any one of the defendants (or any two of the defendants, etc.).
Fortunately, under the same law, the defendants are entitled to settle among themselves so that each ultimately pays only the amount that he/she/it owed under the court judgment—so a defendant who paid monies owing by another defendant would be able to require the other defendant(s) to reimburse (or “indemnify”) him/her/it.
This fair and sensible arrangement can be changed by agreement among potential defendants, that is in this case, by the indemnity clause in a clinical trial contract. The clinical trial contract is originally drafted by the sponsor, and the sponsor not infrequently wants to protect itself against having to pay back monies that another defendant paid to a plaintiff. (For example, the indemnity clause might say that the sponsor would not have to pay back anything to the defendant institution or investigator if either of them had been negligent in any way—but a court finding that the institution or investigator was negligent is the very situation that leads to the institution or investigator being required to pay out monies owed by the sponsor to begin with!)
One of the important parts of negotiation of a clinical trial contract is making sure that a fair indemnity arrangement is preserved, so that the investigator and institution don’t end up paying money owed by the sponsor and not being able to get it back. The sponsor is often in another country, and the institution and the investigator are in the same province and often the same city as the plaintiff subject—guess who the plaintiff is going to collect from first!

7. Question: What is “debarment”? Does it hurt? Is it done under anaesthesia?
Answer:    Debarment hurts, but it’s not done under anaesthesia, being a legal rather than a surgical operation.

In 1989 the US Food and Drug Administration (FDA) learned that some generic drug companies had committed illegal acts, for example falsifying data or giving money to FDA chemists who were reviewing their drug applications. As a result in 1992 theUS federal government passed the Generic Drug Enforcement Act. The Act allows the FDA to “debar” (exclude) individuals and companies from participating in clinical research in the US if they have been convicted of a crime related to the development or approval of a drug application, or a crime involving a type of conduct that undermines the process for the regulation of drugs, or a crime that involves some kind of fraud (such as bribery, perjury, blackmail, falsification of documents, or obstruction of an investigation into a criminal offence); or even if they weren’t actually convicted of a crime but have a pattern of bad behaviour or knowledge of a crime of this kind. There is no Canadian law that is equivalent to the Generic Drug Enforcement Act.

Now you’re asking what this has to do with you, here in Canada.

Whenever a drug company (and not just a generic drug company) applies to the FDA for approval of a drug, it has to certify to the FDA that no debarred person or company was involved in the application. If a drug company has employed a debarred person or company in the application, even as an independent contractor like an investigator or institution participating in a clinical trial, and even when the investigator or institution is outside the US (and, of course, if the FDA finds out), its drug application will not be approved.

No drug company is going to investigate the debarment status of every institution and investigator and staff member working on a clinical trial. Therefore the company asks each institution and investigator to certify (in the clinical trial contract) that they have not been debarred and that no one else working on the study at the site has been debarred.

Canadian institutions do not keep track of whether their physicians and employees have been debarred in the US. It’s a fair bet that an institution or an individual physician knows whether it/he/she has been debarred in the US. It’s not the kind of thing that sneaks up on you completely silently. So the institution and the investigator signing a clinical trial contract are safe enough certifying that they are not debarred (assuming of course that they aren’t). However there’s a certain amount of risk to institution and investigator in certifying, without actually knowing, that no one else working on the study at the site has not been debarred—keep in mind that the sponsor will lose a ton of money if turns out that someone from the site has been debarred, and will come around hot-foot looking for compensation.

Drug companies will not let institution and investigator off the hook and say it’s OK to leave out the certification that those working on the study have not been debarred. So how best to protect yourself in this situation? The FDA keeps lists of investigators and others who have been debarred. These are available on-line, and before you certify that study staff are not debarred you should look at the lists. They are not very long. Go to:http://www.fda.gov/ora/compliance_ref/debar/default.htm andhttp://www.fda.gov/ora/compliance_ref/bimo/disqlist.htm

8. Question: What happens if genius strikes and an investigator or member of the study staff makes an invention while conducting a clinical study? Yee-ha! are we rich now?
Answer:    If the study site didn’t negotiate a change to the contract sent out by the trial sponsor in order to get some rights to inventions, the sponsor has probably claimed ownership of all inventions made by the investigator, institution and their employees in the course of the trial—and has no obligation to pay the inventor a penny for the invention.

9. Question: I’m tired of using “Sincerely Yours”, “Cheers” and “Best Regards” as closing salutations on my emails and letters. Can you suggest anything more interesting?
Answer:    Yes, certainly! We receive a lot of correspondence and we’re happy to pass on the following closing salutations from some of our favourite sponsors and contract research organizations:

    • War Regards,
    • This is non-negotiable,
    • Sorry for any confusion and inconvenience this may have caused,
    • I apologize for my late response. I will be on vacation for a month, starting next week. I need your reply by tomorrow at the latest.


We’ll update as notable new salutations come in.