The notorious reputation of clinical trial contracts needs no introduction in the clinical trial business world. As far back as 2009, a survey indicated clinical trial contract and budget approval as the leading cause of clinical trial delay.1. A decade later, this stumbling block still hinders timely clinical trial startup.2
Industry Standard Research (ISR) reports revealed in January 2020 that 41% of the respondents to its recent survey considered clinical trial contract negotiations to be the most challenging step in starting up clinical trials. They specifically identified contract verbiage, protracted legal reviews, and cost negotiations as burdensome areas.3
For companies in this business, the continuous decline of the return on investment of pharmaceutical research and development,4 and the rising costs of pharmaceutical medicines,5 intensify the pressure to find solutions to this business inhibitor.
Companies attempt to tackle this challenge by standardizing their contract templates, setting up master clinical trial contracts with repeat clinical trial sites, and streamlining communication and escalation processes. Those with resources turn to technology and artificial intelligence to explore options to shorten clinical trial contract negotiations.
However, one may ask, how optimal will any solution be if the clinical trial contracts themselves are not business-friendly? 6
Feedback from the recent ISR survey reveals that contract verbiage and protracted legal reviews are cumbersome challenges,7 and this is throwing a spotlight at the way the industry is viewing or using clinical trial contracts. It suggests that the industry perceives and uses clinical trial contracts as legal tools, drafted by and for legal users.
When we treat clinical trial contracts as legal tools, we focus on finalizing enforceable agreements we hope to use as shields to protect us from anticipated disputes and disagreements. We review and negotiate clinical trial contracts primarily through the lens of risk avoidance and risk containment.
But, this way of working with clinical trial contracts comes at the expense of missing the competitive advantages that flow from a balanced and business-friendly agreement.
So, what is the alternative?
Why not view and treat clinical trial contracts as business tools? We start by creating and using business-friendly agreements that enable the contracting parties to perform their obligations on time.
Contract simplification,8 using design thinking against the backdrop of proactive law9 principles, can help us craft business-friendly clinical trial contracts.
Generally, proactive law principles emphasize achieving a specific goal under a set of circumstances. In clinical trials, this is typically the timely start-up of clinical trials.
By applying proactive law principles to our contracting process, we seek to not only prevent disputes or litigation from arising in the first place, but we actively promote business success and value creation in our business relationships through collaboration between legal and other experts.
- We focus on proper contract performance.
- We facilitate collaboration through open dialogues to gain an overall view of the opportunities.
- We reframe our legal concerns as business concerns.10
The following five-stage design thinking model proposed by Hasso-Plattner Institute of Design at Stanford11 provides us with a systematic approach to designing simplified clinical trial contracts and applying proactive law principles.
Stage 1 - Empathize
The goal of this stage is to derive insight into how diverse users use and experience the contract. You need to develop empathy for the contract users by observing them and engaging them through questions to understand their pain points, experiences, and motivations. You may use a tool like an empathy map (see Figure 1) to help you capture the information you gather from observing and engaging with the contract users.
Figure 1 organizes the information derived from John Smith, a fictitious clinical trial contract specialist persona. John Smith struggles to deal with the company's indemnity provision in favor of clinical trial sites across different documents.
Figure 1: Empathy map example for a clinical trial contract specialist.
Typical users of a clinical trial contract include contract specialists, study start-up specialists, finance, tax or payment specialists, project or clinical managers, commercial managers, and legal advisors.
Move on to the next stage once you have gathered enough information from the contract users to form a case study.
Stage 2 - Define
The next stage involves identifying the clinical trial contracting challenge and goal using the results from the first stage. At this point, you will come up with a problem statement.
Ensure that the problem statement is well-defined and actionable so that it can guide you to a solution. For instance, you may use the following formula from the Interaction Design Foundation12 to help you articulate your problem statement:
[User . . . (descriptive)] needs [need . . . (verb)] because [insight. . . (compelling)]
Applying the formula to the information we have harvested from John Smith in Figure 1, the problem statement may read:
A contract specialist who negotiates clinical trial contracts needs the indemnity provision from the company in favor of the clinical trial site to be in one document, because replication of the same indemnity provision across the clinical trial contract and letter of indemnity causes prolonged review and unnecessary escalation to the legal advisor.
Figure 2: How to write a problem statement.
This stage is crucial because it sets the parameters of the contract simplification project and presents us with an opportunity to articulate the challenges that will guide us to the solutions.
Stage 3 - Ideate
Once you have a problem statement, brainstorm solutions to your challenges.
For challenges associated with language complexity, use plain language principles when writing your clinical trial contract. The Plain Language Association International (PLAIN) offers a good starting point.13 You can also build a structured, accessible, and easy-to-navigate contract using design patterns and visualization. The IACCM maintains a Contract Design Pattern Library and other resources that offer inspiration.14
Figure 3 illustrates how using plain language, design patterns, and visualization can simplify your clinical trial contract.
Figure 3: Applying plain language principles and design patterns.
In line with the spirit of proactive law, to curate and edit your clinical trial contracts' content, look beyond the enforcement of legal rules and risk avoidance. Consider industry-standard and local practice, and reframe your legal concerns as business concerns to create a more balanced agreement.
For instance, budget negotiations could become smoother if we consider the regional standards, local reimbursement rules, and cost of living expenses of the clinical site area when setting up a country-specific budget for a clinical trial project.
Here is a practical example of how we can reframe a legal concern into a business concern.
Assume that a pharmaceutical company service provider is involved in the payment administration, negotiations, and signature of clinical trial contracts on behalf of the pharmaceutical companies. The service provider is concerned about getting sued by clinical trial sites for late or non-payment of the clinical trial costs, because it does not receive timely upfront funding from the pharmaceutical company. To compensate for this concern, the service provider authorizes making payments to the clinical trial sites in the clinical trial contract based on it receiving funds from the pharmaceutical company.
However, clinical trial sites usually push back on this qualifier, and it becomes the bottleneck of many negotiations. Inevitably, one party must escalate this sticky point to upper management for approval to deviate from its standard way of doing business. Time is lost as a result.
When reframed as a business concern or opportunity, it becomes evident this is a cash flow issue. The pharmaceutical company and service provider may solve this issue by agreeing to timely, upfront funding between themselves.
This option leads to possibly removing a provision that slows down negotiations of the clinical trial contract.
Throughout this brainstorming stage, remember to ask how the team might solve the problem using plain language, design patterns, and proactive legal strategies.
Stage 4- Prototype
Once the brainstorming sessions produce enough insight to simplify the clinical trial contract, the next steps involve making a start at creating a simplified model contract for testing. This phase is about evaluating and reviewing the model and does not call for a finished and complete contract.
Stage 5 - Test
Finally, test drive your prototype simplified model contract. If you are a pharmaceutical company, this stage may include sharing a draft simplified contract template to get feedback from your service provider negotiating the deal on your behalf. User feedback is critical, so collect all feedbacks submitted to facilitate continuous refinement and improvement to the model.
Always be flexible. The five stages need not take place in sequential order. You may implement them flexibly. If the testing stage reveals new insights, the team may need to circle back to step 3 to find better solutions. In a similar vein, the team may go back to step 1 when they are already in stage 3 if more information from the contract users is needed.
Changing the reputation of clinical trial contracts from business inhibitors to business enablers through contract simplification requires a shift in mindset, a human-centric approach, and a drive for continuous improvements. It is not for the faint-hearted, but when implemented, the rewards are plenty:
- You engage your contract users.
- Your clinical trial contracts become usable contracts that serve the needs of the parties involved in the clinical trial business.
- You improve site relationships through your collaborative approach.
- And you tap into an untapped source of brand reputation and values.
- Faster Study Start-Up and Reduced Costs with Clinical Document Exchange Portals, Gail Farfel, Ann Neuer, INTRALINKS, 2009, p.2.
- 2019 Financial & Operating Benchmarks. CenterWatch.
- The Quest to Improve Efficiency In Site Contract And Budget Negotiations, Rebecca McAvoy, Clinical Leader, 2020.
- Ten years on. Measuring the return from pharmaceutical innovation 2019, Deloitte.
- Hundreds of Prescription Drugs Are Costlier in 2020, Dena Bunis, AARP, January 6, 2020.
- Business-Friendly Contracting: How Simplification and Visualization Can Help Bring It to Practice, Helena Haapio, Thomas D. Barton. In: Kai Jacob, Dierk Schindler, Roger Strathausen (eds), Liquid Legal, Springer, Cham 2018, pp. 371-396. See also Author Accepted Manuscript (AAM).
- The Quest To Improve Efficiency In Site Contract And Budget Negotiations, Rebecca McAvoy, Clinical Leader, 2020.
- Contract simplification is looked at holistically in this article. It covers the simplification of the contents and form of the contract (language, contract structure, and presentation). The author acknowledges that certain contents may be inherently complex and there is a limit to simplification, which we should continuously explore by keeping the situational goal in mind.
- Proactive law is a legal movement that originated in the 1990s in the Nordic region. Proactive law proponents consider the usability and operation of contracts and law in everyday life and focus on forging collaborative and sustainable relationships while reaching for a common strategic goal and preventing disputes. They view contracts and laws as a source of opportunities and not just risks, threats, and constraints.
- Using Proactive Law for Competitive Advantage, George J. Siedel, Helena Haapio, American Business Law Journal, 47, 2010, pp. 641-686.
- 5 Stages in the Design Thinking Process, Rikke F. Dam, Teo Yu Siang, Interaction Design Foundation, 2020. For an overview of the different models of design thinking, see also 10 Models For Design Thinking, Libby Hoffmann, Medium, July 30, 2016.
- Interaction Design Foundation featured on its website as “one stop design school to learn new design skills.”
- What is plain language? "A communication is in plain language if its wording, structure, and design are so clear that the intended audience can easily find what they need, understand what they find, and use that information." Source: International Plain Language Federation.
- IACCM Contract Design Pattern Library, Stefania Passera, Helena Haapio. See also Start Your Simplification Journey with the IACCM Contract Design Pattern Library, Stefania Passera, Helena Haapio, Contracting Excellence Journal, September 8, 2019 and IACCM Contract Design and Simplification.
For further reference
- Learn about clinical studies Online report published by NIH (U.S. National Library of Medicine) ClinicalTrials.gov
- Clinical trial agreement article defining clinical trial contracts or agreements published by the Ohio State University Center for Clinical and Translational Science
ABOUT THE AUTHOR
Caroline Thangavelu is a freelancing clinical trial contract consultant based in Amsterdam, the Netherlands. She helps life sciences companies to improve their clinical contract operations and develop their contract specialists. Her over one decade experience in consulting and providing strategic direction to clinical trial contracts spans over 50 countries worldwide.
*The author would like to thank Helena Haapio, Contract Strategist at Lexpert Ltd and Associate Professor of Business Law at the University of Vaasa, Finland for reviewing the article.