Cindy Palomino of Chubb Insurance and Jay J. Schuttert of Snell & Wilmer discuss the risks of clinical trials and risks that pharmaceutical products face on the market.(Q1) Clinical trials are growing across the globe: what type of risk management do you see in those areas and how can they keep down costs?
Cindy: Companies go overseas to do clinical trials based on specific populations. It’s harder to do trials overseas due to regulations, informed consents, insurance, etc., thus it requires a lot of resources. It may cost a lot of money to run the trial, but then you need to invest even more money to monitor what is going on over there. You need to be engaged in selecting the PIs. It is becoming more and more important that the sponsor of the company monitors the actions of those people.
Jay: Bad news: litigation against the clinical trial industry is on the rise. There are a few simple things we can do to eliminate risk. For example, the FDA has a lot of rules, so you can exceed their standards to insulate yourself to an extent.
(Q2) If you outsource your trial, are you outsourcing your risk(s) as well?
Cindy: A lot of small companies have limited resources. The sponsor of the company is held responsible, and they can transfer some risk if they have good contracts. However, they are responsible and they are not removing themselves from the risk
Jay: Lawyers will pin companies. Anyone who has any interest or connection to a clinical trial can be used as a defendant in a trial, so it must be monitored closely to make sure everything is legitimate.
(Q3) On the risk side, given the high level of failure and given the frequency of core trial design, how do you evaluate what projects you are prepared to be at risk from? Also, if you have a client that comes in who has made mistakes (i.e. not reporting data or not complying to the trial), which is not something you can necessarily predict in the process- what is your attitude in that regard with respect to the client? Do you let them get away with it or push for settlement?
Cindy: As much as the client will allow… the focus is the research and protection of the assets tends to be an afterthought. There are few companies that, at the beginning, we turn away unless they have issues with the FDA because, in that case, they may be trying to hide something. Everyone has made mistakes, but we do a lot of research in the class of drug or device in the past. We look at the track record, literature, who their partners are, what their selection process is, who is on the board- we look at all of those components. I think these stages are very important in the ultimate success of the company. We take a look at the adverse events and what else the drug may be used for- we encompass that into our study and this will help our research in the end.
Jay: In the scenario described, it’s one of those cases that I would encourage the client to make go away. The big issue is what can happen to you in front of the government (i.e. congress, etc.) with a 9-10 year verdict and bad press. It should be evaluated on a case-by-case basis, however.
(Q4) Is there an international standard [different from that of the US] for informed consent?
Cindy: I think the US has always led other countries with regard to informed consent. My US companies that are doing trials overseas are abiding by what the ethics committees are requiring of them (insurance, language, etc.). I haven’t seen anything that the FDA requires which is not required in the US. The FDA has minimum guidelines, but the more you can disclose with a thorough explanation of the process and what’s to be expected, the better. Looking at the recruiting process is a little more important overseas than the US, and this may be due to differences in patient education.
Jay: If you get sued, it is nice to be able to say you listed everything and every participant signed off on a consent document. If you give more info, you cover your ass.
(Q5) Last week, a lawsuit was filed with a woman in a clinical trial, and there was not an adverse event (but not a positive outcome either). However, she filed a lawsuit that she did sign the consent paper but did not feel properly informed about her treatment. Could this be the death row for clinical trials in the US?
Jay: This could be an issue. Every lawsuit has some value to someone. Even if you spent money just to get rid of it, someone is making money from that.
(Q6) In your experience with clinical trial liability, do the issues stem mainly from problems with the drug or “man-made” mistakes?
Cindy: The execution of the protocol and the lack of involvement on the part of the sponsor are the biggest issues. Failure to report adverse events and go back to modify the events cause problems. There are events of products causing injury, but it is minimal. Sometimes patients with exclusionary issues still get into the trial, but again, this goes back to the execution of the protocol.
Jay: I see the gamut, but the most important thing is to file paperwork and keep adequate documentation to save yourself.
(Q7) Is there a consistency pattern to weaknesses?
Cindy: Structure in the clinical trial and how they monitor it often presents weaknesses. Sales people are going around demonstrating and selling product; however, they often over-commit and make too many promises regarding what the therapy will accomplish. Even though companies put out documents, sales people tend to contradict them. Again, this goes back to lack of supervision in training and sales as being two major issues. In addition, contract manufacturers can cause a weak contract/execution and this can help them reduce their liability/loss or increase it.
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