Mitigating Clinical Trial Agreement - Related Risk During COVID-19

Marlon Rajakaruna, Lawyer, Kingsgate Legal

Many Canadian research sites are engaged in various clinical research studies. However, due to COVID-19, most of these sites are currently unable to perform many study-related obligations including study subject procedures. This could put the site in a position where it is in breach of the clinical trial agreement (CTA) and/or the clinical trial protocol. As a result, sites need to look at ways to mitigate their contractual risk.

1- Review your existing CTAs

Many CTAs have strict performance timelines set forth in the CTA, the study protocol and/or the budget. Failure to meet these timelines can put a site in a breach of contract situation which could expose the site to damages and legal costs.

Sites should be reviewing their CTAs to see if they contain force majeure clauses. Depending on how this clause is worded, it may provide the site with protection for any failure to comply with the CTA if such failure is as a result of COVID-19.

If the force majeure clause is not drafted in a manner that would cover off disease, epidemic or pandemic, or if the CTA does not include a force majeure clause, then one other option is to rely on the doctrine of frustration. This is a remedy for extreme events which have made the purpose of the contract substantively different than the parties had originally intended when they entered into the contract. The key elements that must be demonstrated are: (1) there has been an event that occurs through no fault of either party and where such event was neither contemplated nor reasonably foreseeable when the parties entered into the contract. The event must also be directly linked to the frustration of the original purpose of the contract; (2) The CTA must not have a force majeure clause or similar provision which the parties intended to govern unforeseen events. If a force majeure clause exists then the court will rely on its interpretation of that provision to determine what is to happen as a result of the unforeseen event; and (3) The frustrating event must render performance impossible or for a purpose which is substantively different than that originally intended. The result of a successful frustration claim is that the contract is deemed frustrated and all obligations are extinguished as of the date of the “event”. Note that many provinces have enacted provincial legislation to administer the outcomes of contracts found to be frustrated.

2- Communicate with Sponsors/CROs

It sounds simple, but sites may be able to mitigate their risk of non-compliance by simply communicating to sponsors and CROs that they are unable to meet their contractual obligations due to COVID-19. Many sponsors and CROs will agree to amend the CTA to include or amend a force majeure clause (if one was not included or the one that was included didn’t contemplate disease, epidemics or pandemics). Or, they may provide a waiver in writing for any COVID-19-related non-compliance.

3- Suspension or termination

The CTA may also include language that would allow a site to suspend the study for safety reasons. If so, depending on the type of study and procedures involved, the site may be able to rely on that. In addition, the termination section may allow the site to terminate the CTA for safety reasons or for the convenience provided that any stated notice period is complied with.

4- ICH-GCP obligations

Regardless of whether the study is put on hold due to force majeure, or terminated due to the doctrine of frustration or suspended or terminated for safety reasons or otherwise, it is important to remember that the site and principal investigator still have obligations to ensure appropriate care and follow up of subjects (section 4.12 of ICH-GCP).

5- Communicate with insurers

If your site is non-compliant with the CTA and you are unable to rely on any of the above options, it is important to immediately communicate the non-compliance and any potential liability to the site’s insurer. Failure to do so in a timely manner may preclude the site from being able to rely on its insurance coverage at a later date.

Marlon will be presenting a 3-part webinar series for CARA on negotiating clinical trial agreements. The webinars will take place on June 11, 18, and 25.