CRO engagement: a compliance checklist to identify red flags and prevent corruption risks | Hogan Lovells


The engagement of clinical research organizations (CROs) by pharmaceutical and medical device companies to manage all or part of their clinical trial-related tasks and functions becomes increasingly relevant as the number of global clinical trials increases every year and that the regulatory framework associated with clinical trials and subsequent commercial development of drugs and devices becomes more complex. International clinical trials are particularly difficult for sponsors, as they typically take place in many unfamiliar business and regulatory environments. In such cases, outsourcing clinical research services to CROs with local expertise can reduce overall costs to sponsors and facilitate the execution of trials efficiently and quickly. CROs specializing in clinical trial support services often ensure in-depth knowledge and experience in the applicable jurisdictions where they serve and promote their ability to facilitate the commercialization of products at a lower overall cost based on expedited regulatory submissions. .

Conducting international clinical trials presents various corruption compliance risks due to a complex regulatory environment, including extensive oversight by local government regulatory agencies and review boards that are responsible for ensuring the trial is conducted in accordance with applicable regulatory requirements, global industry standards and good clinical practice. The need to obtain regulatory approvals as part of the clinical trials activity creates corruption compliance risks given the substantial financial incentives that exist to expedite the regulatory approval process, and these risks can be increased when sponsors work with CROs that are beyond their direction and control. The complex nature of global clinical trials generally makes it difficult for the sponsor to monitor CRO activities. Engaging CROs also results in complex cost structures with difficult benchmarking and fair value measurements. Since CROs are often used in emerging markets and are typically responsible for coordinating much of the clinical trial activity in multiple jurisdictions, they may also interact regularly with public officials and be authorized to pay regulatory and regulatory fees. ” other payments to public entities, thereby increasing the overall corruption risk profile associated with their activity on behalf of the sponsor.

Potential corruption red flags to watch out for when engaging a CRO in light of these increased corruption risks include:

  • The CRO indicates that it has “good relations” with the health professionals (HCP) / public officials / government agencies in the jurisdiction concerned;
  • The CRO “guarantees” that it will expedite regulatory submissions, researcher recruitment, and meet or exceed patient recruitment milestones in a timely manner without disclosing its approach;
  • Lack of transparency regarding contractual arrangements between the CRO and its suppliers or other participants in the clinical trial (for example, subcontracting with other CROs or collaboration with site management organizations (“SMO” without appropriate documentation or transparency as to the roles of each participant);
  • Lack of transparency regarding the payment structure established by the CRO (including requests to provide services in one country but to be paid in another country, or requests for payment through an entity separate legal with unclear links to the CRO performing the services);
  • No documentation of a needs assessment to initiate the CRO or support the CRO’s actual use or processing of clinical trial data;
  • No documentation of the CRO’s rationale for selecting a particular site / researcher (e.g. no documentation supporting the repeated selection of prescribers, consultants, key opinion leaders or frequent speakers);
  • No detailed documentation of the actual services performed by the CRO;
  • Agreements / payments to individual investigators rather than sites;
  • CRO owned in whole or in part by public officials of the jurisdiction concerned or members of their families; and
  • Personal, financial or organizational overlap between the CRO and investigators / HCP / public officials or their family members in the jurisdiction concerned.

To mitigate the corruption compliance risks associated with the engagement of CROs by clinical trial sponsors, the following general steps should be taken by sponsors before and during their engagement with CROs (in addition to any additional steps that may be necessitated by local considerations):

  1. Risk-based due diligence procedures for the engagement of the CRO and its selection of sites and investigators, including the identification of the entities and individuals involved as well as the subsequent assessment of, among others, historical compliant relationships between CRO and HCPs / public officials / government agencies, any financial links between CRO and sub-contractors / HCPs / public officials / government agencies, and potential compliance risks and red flags associated with contracts with CRO suppliers and party payments to third parties.
  2. Appropriate documentation of the need for CRO participation and objective selection criteria regarding the engagement of CROs and their selection of sites and investigators.
  3. Conclusion and documentation of written service agreements, including, among others, strong anti-corruption and conflict of interest provisions, audit and termination rights, clear payment structures and clear definitions of the services and deliverables to be provided by the CRO.
  4. Payment terms based on milestones based on clinical trial protocol and fully documented budgets based on fair market value assessment.
  5. Permanent and proactive monitoring of, among others, receipt of services from the CRO, the fair market value of those services received from the CRO, and other potential red flags.

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