September 30, 2008

September 30, 2008

Bradley Merrill Thompson

Sponsor-CRO Relationships: Managing Risk

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Topics

– ABCs of CROs– Planning– RFP and Due Diligence– Contracting– Execution of Work– Evaluation– Take Aways

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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

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CROs v SMOs

Sponsor

Sponsor’s Agent (CRO)

Researcher’sAgent (SMO)

Research Site/

Investigator

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Topics

– ABCs of CROs– Planning– RFP and Due Diligence– Contracting– Execution of Work– Evaluation– Take Aways

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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

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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

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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

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Topics

– ABCs of CROs– Planning– RFP and Due Diligence– Contracting– Execution of Work– Evaluation– Take Aways.

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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?

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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

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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

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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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Common Project Risks

– Inefficiency and quality issues from staff changeover or inexperience

– Delays in site initiation– Delays with 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 approvals

17Source: Thomson CenterWatch 2005 Survey of 612 Investigative Sites in the U.S.

Factor Most Often Causing Study Delays United States

52%45%

37% 35%28%

0%

10%

20%

30%

40%

50%

60%

Contract andbudget

negotiation &approval

Patientrecruitment &

enrollment

Protocolamendment

and refinement

IRB review &approval

Review&approval of

consent forms

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Topics

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



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Metrics--Why Measure?

– Performance management requires metrics to:o Create alignment and focuso Assess and manage risko Inspire/motivate peopleo Create accountability for those responsibleo Learn lessons regarding what workso Reduce subjectivity and political bias in

decision-makingo Maximize data qualityo Ensure timelines

– What gets measured, gets doneo What does not get measured, may not get

done

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CRO and Sponsor Relationships

– Transparency of performance builds trusto Assures alignment on study qualityo Provides the 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

– Celebrating successes provides positive reinforcement and motivation

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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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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

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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

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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

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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

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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

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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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How Do We Use Metrics?

– Just as you would internally, for performance management:o Create alignment and focuso Assess and manage risko Inspire/motivate peopleo Create accountability for those responsibleo Learn lessons regarding what workso Reduce subjectivity and political bias in decision-makingo Maximize data qualityo Ensure timelines

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

o Contractual management process and dispute resolutiono Contractual rewardso Contractual penalties

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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)

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Topics

1. ABCs of CROs.2. Planning3. RFP and Due Diligence4. Contracting



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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

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Ability to Bind Sponsor to CTAs

– If CRO is allowed to contract on the sponsor’s behalf, contractual controls can help protect sponsor’s interests

– Range of Possibilitieso CTA template

Sponsor provides template for CRO use CRO provides CTA template for Sponsor review and

approvalo CRO authority to negotiate

Only extends to certain provisions CRO must submit all changes to Sponsor for review

and approvalo Notification of changes and amendments

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Topics




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Change Orders

– Typically, the SoW sets forth the particular services to be provided by the CRO to the sponsor

– Additional services beyond those in the SoW are generally subject to a “change in scope” or “change order” that modifies the agreement and increases the total cost of the project

– Some sponsors have negotiated a shift of the risk of cost overruns to the CRO absent an executed addendum setting forth the change of scope and any additional charges for these services

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Topics




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Personnel

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

– Study personnel change frequentlyo Turnovero Moving people around

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Managing Personnel

― Sponsor should retain the right to approve at least key study personnel, including additional or replacement personnel added during the course of a study

– Sponsor access to study team training records

– Consider specifying training requirements for the study team, including any replacement personnel– The cost of study-specific training of study

personnel is typically included in the budget

– Training of replacement personnel may generally be allocated to the CRO

– Institutionalize communication and systems to reduce dependence on merely outstanding people

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Topics

1. ABCs of CROs2. Planning3. RFP and Due Diligence4. Contracting5. Execution of Work

a. Red Flagsb. Communicationsc. Dispute resolution

6. Evaluation

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Watch for Red Flags

– Selection of inexperienced investigators by the CRO

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

than others– Failure of CRO to submit monitoring reports

promptly after visit– Frequent rescheduling of meetings and reports by

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

Vogel

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Strategy for Avoiding Delays

– Efficient change order process– Also need good communication more

generally– And a good process for conflict

resolution, that escalates it up three steps before the conflict goes to the lawyerso CRO needs to agree contractually to not

unreasonably refuse a change order

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Topics



6. Evaluation

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Managing Communications

– Poor communication is often cited as a prime reason for frosty relations between CRO and Sponsors o CRO contract should contain an express

liaison provision establishing a point of contact for each party

o Provide for basic joint committee structure

o Consider including list of all key operations, billing and legal personnel as part of MSA or SoW (link to change of personnel provision)

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Preferred Provider Agreement Relationship Management Model—Joint Committees

Project Team 1

Project Team 2

Project Team 3

Project Team 4

Governance/Steering Committee (VPs)

Operational Committee (Directors)

Thomis & Desai

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Speaking The Same Language

– Define systems and expectations up front– Joint committees of designated people by title– Weekly, monthly and quarterly meetings with

the clinical and operations project teams– Discuss at team level

o Operational issueso Quality/compliance issueso Metrics reviewo Cost vs budget

– Escalate as appropriate to operational and steering committees

– Periodic comprehensive reviews by operational and steering committees

– Other Communicationso Establish systems that identify and track key

issues and their resolutiono Keep other key stakeholders informed

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Topics



6. Evaluation

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Proactively Avoiding Disputes

– Obviously write a clear contract, statement of work, budget, payment schedule, etc

– Payment Termso The CRO must remain cash neutral: not a

bank

o Clearly define “delivery” and “completion”

o Sponsors should negotiate payment for performance, including milestones and deliverables

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Resolving Payment Disputes

– Make delivery of data independent of paymento Why? This is the reciprocal of a common

request by a CRO to include limitations on liability, such as limiting damages to contract price, not actual damages due to delay, etc.

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

– This dovetails with the termination provision, which might for example require 10 days notice during which the contract is still valid.

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Topics

1. ABCs of CROs2. Planning3. RFP and Due Diligence4. Contracting5. Execution of Work6. Evaluation7. Take Aways

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Post Study Learning

– How did the CRO perform? Look at final metrics.

– How did other third parties perform?– How did the sponsor perform?– What unexpected risks 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

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Topics

1. ABCs of CROs2. Planning3. RFP and Due Diligence4. Contracting5. Execution of Work6. Evaluation7. Take Aways

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Take Aways

– Establish realistic objectives and expectations– Understand your internal capabilities and advise the

other party accordingly– Budget early– Establish clear lines of communications between

parties and identify contract liaisons– One size does not fit all; make CRO selections based

on specific needs of each trial – Use contract templates with caution

o Do templates contain party’s wish list or minimum requirements?

– Review/update templates periodically, particularly MSAs

Questions?

September 30, 2008

Documents

Transcript of September 30, 2008