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Faber Daeufer & Itrato, in collaboration with Danforth Advisors, recently presented the second in a series of presentations about best contracting practices for the research, development and commercial activities of drug development companies. How to Navigate Key Sponsor-Provider Agreements to Improve Your Outcome focused on describing key agreements, outlining their purposes, and how each impact working with Clinical Research Organizations (CROs). They also offered their insight on common issues that come up, and how to maximize leverage when negotiating different agreements.
Agreements covered in the discussion included Confidential Disclosure Agreements (CDAs) - which offer protection of confidential information that parties wish to share with each other. Potential situations discussed involved the implications of service providers wanting to add affiliates as parties, the handling of trade secrets, and the different conditions under which a mutual CDA may be preferred over a one-way CDA.
The second process discussed was Request(s) for Proposal (RFPs). Topics touched on in relation to RFPs were the benefits of vetting participants prior to sending an RFP, baking into the RFP stronger terms around your reliance on commitments made by services providers at the RFP stage as well as the importance of including key decision makers early in the RFP process and start of Master Services Agreement negotiations.
Following the discussion on RFPs, the group moved on to Authorization(s) to Proceed, or ATPs. ATPs, sometimes called Letters of Intent, are agreements that are sometimes put in place when timing sensitivities mean a certain limited scope of work needs to take place before a services agreement can be finalized. Much of the discussion relating to ATPs circulated around the loss of leverage that can often occur with an ATP, both because ATPs tend to be created using less discrete terms, and also because sponsors are often pushed to compromise on important issues.
The last agreement covered was Master Service Agreements or MSAs, which are framework contracts that set out the terms and conditions for services being conducted by a service provider in relation to the sponsor company. The discussion began with important factors in creating an MSA, like clarity, specificity, and how to structure liability. Also discussed were common challenges faced with scope creep and in areas such as indemnification, liability, compensation and subcontracting and issues that may arise in negotiating changes to the MSA. There was then a discussion on ideas of how to mitigate these challenges by preemptively establishing frameworks and processes to be used before any changes arise.
Tony Carita, Managing Director of Clinical Business Operations at Danforth, Nirosha Sithirapathy, Associate at Faber, and Linda DeGraw, Associate Director, Contracts Specialist, spoke on these topics from business and legal perspectives, respectively. Gina C. Wu, Counsel at Faber, moderated the webinar.
Danforth Advisors is a leading provider of strategic and operational services to emerging life sciences companies, including finance and accounting, HR, and clinical business operations. Carita’s team supports their clients’ business and operations teams with the establishment and management of clinical operations outsourcing.
Faber Daeufer & Itrato is a diverse law firm with decades of experience providing dynamic and bespoke business counsel focused on life sciences clients in the US and globally. Sithirapathy’s and DeGraw’s team, comprised of lawyers, contracts specialists and administrative professionals, have significant in house experience enabling them to provide pragmatic advice across a range of preclinical, clinical, licensing and development and manufacturing challenges, including but not limited to developing templates, customizing form agreements, negotiating individualized clinical trial agreements, reviewing informed consent forms, negotiating service agreements, and negotiating clinical trial supply and distribution agreements.
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