Monday, October 25, 2021 5:41:13 PM
What I said was I made sure CROs paid a penalty if they didn't meet the agreed timlines.
That's standard practise, for example here:
"Default. Failure to complete any Services in a Timely and Professional manner shall constitute a material breach of this Agreement. In the event of any failure by CRO to complete any Services in a Timely and Professional manner, BIOMARIN shall have the option to provide CRO a Disputed Services Notice pursuant to Section 4(C) or a notice of default pursuant to Section 5(C), or both, and shall not be precluded from utilizing any other remedies available to it under this Agreement or applicable law"
https://www.sec.gov/Archives/edgar/data/1048477/000119312505052825/dex1039.htm
And here:
"The Growing Role of Performance Incentives Between Sponsors, CROs
March 7, 2017
Sean Russell
The expanding role of incentives is a healthy trend in an industry defined by high costs and the pressure of deadlines, and such agreements have evolved recently to benefit all involved.
Clinical drug trials require enormous commitments of money and time, and sponsors are understandably motivated to ensure they’re run efficiently. Late patient enrollment, delayed site activation, and missteps during the course of the trial are just some occurrences that can raise the already high stakes in developing new therapies.
So when we recently performed a double-blind trial of a treatment for major depressive disorder, the contract included bonuses - and corresponding penalties - tied to five factors: U.S. patient enrollment (40 percent), enrollment in Australia and Canada (7.5 percent each), database lock (30 percent), and first patient screened (10 percent).
When contract provisions like these started showing up a few years ago, they were generally an afterthought. Only recently have they started to become a standard part of the negotiation process, with risk-reward terms typically tied to milestones such as:
Time from contract award to first patient screened.
Time from contract award to opening of the first study site.
Percentage of sites activated within a prescribed period.
Date of database lock relative to last patient last visit, with a greater incentive paid for every week that lock date precedes LPLV.
A maturing business model
The expanding role of incentives is a healthy trend in an industry defined by high costs and the pressure of project deadlines, and these agreements between drug makers and their clinical research providers have matured significantly in recent years - to each party’s mutual benefit.
Part of that maturation has been the recognition that everyone has much to gain from a successful trial - and everything to lose from a failed one. A sponsor that enters a negotiation seeking to extract penalties from an underperforming CRO overlooks the real value of risk-sharing as much as a CRO that grudgingly accepts these terms as a threat to its profitability. In fact, I prefer to avoid the word “risk” altogether, seeing these instead as opportunity-sharing arrangements.
No risk-reward deal set up as a trip wire - the sponsor seeking to extract its pound of flesh for missed commitments - has any real chance of succeeding. Indeed, smart drug companies pursue these deals hoping the CRO hits those incentive milestones and happily paying for performance that meets or exceeds contract terms. In turn, we share these payments as project team bonuses, a great motivator for our staff in an industry that’s synonymous with rapid employee turnover.
Many things drive the high-functioning teams that are so important to successful trial execution, of course, and bonus payments alone cannot provide all the needed impetus. Professionals in this field thrive on teaming with sponsors on work that has potential to advance science and improve lives, and on the satisfaction that comes from collaborating with talented colleagues. But bonuses have shown to be an important tool in improving employee morale and retention.
Choosing the right measures
A vital part of effective performance incentives is agreeing on measurements that are meaningful and equally advantageous. Some of the targets the industry tried early on were just plain unworkable, such as penalties without corresponding rewards (it’s hard to imagine a worse deal from our perspective) and CROs agreeing to accept royalties from future drug sales as part of their fee (a long wait for a very uncertain return).
We’ll assume risk only at a level commensurate with the control we’re allowed over the study’s execution - things like:
Protocol design and site selection, which have a significant bearing on patient recruitment, retention, and compliance.
Appropriate level of feasibility assessments to be performed.
Operational strategy, such as recruitment plans, monitoring, strategy, data management and statistical analysis planning."
https://www.appliedclinicaltrialsonline.com/view/growing-role-performance-incentives
Sounds like that $90 million program was run sub-optimally, and one could have secured some kind of guarantees abut completion.
To be fair $90 million isn't a lot in the context of pharmaceutical studies, so I can understand why some companies are insouciant about getting their data delivered in a timely fashion.
On the other hand, as one company's mantra has it, "the patient is waiting".
Which is a position I agree with.
Results, whether positive or negative should be made available just a soon as possible.
Particularly when dealing with a public health emergency like COVID-19.
"Nobody ever went broke underestimating the intelligence of the
American public."
H. L. Mencken
"It’s easier to fool people than to convince them that they have been fooled."
Anon
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