Innovative Drug European Associates

Balancing risk and reward: The cost of providing legal representative support

When regulations change there are always a few aspects where the careful reader finds themselves asking “did they really mean that?”. In that vein there is a somewhat ominous clause in the new Clinical Trial Regulation, at least from the point of view of the legal representative.

Article 74 of the regulation states: “Such legal representative shall be responsible for ensuring compliance with the sponsor’s obligations pursuant to this Regulation, …..”. What that means is the EU legal representative now takes on the role of overseeing the sponsor’s compliance and potentially the role of “whipping boy” if the sponsor fails to fully step up to the line.

When the regulation was first published many believed that the decision of whether to require an EU legal representative would be made on a country-by-country basis. However, when asked about the basis on which the decision would be made the European Medicines Agency recently replied  “…the decision to appoint or not a legal representative in the EU, should the sponsor not to be based in the EU, will apply on trial-by-trial basis and would be at the discretion of the Concerned member states (CMS) where the sponsor intends to conduct the clinical trials”. This raises the very real possibility that the member states will look at the sponsor, and, based on their evaluation of them, decide an EU legal representative might only be needed in cases where there are concerns about compliance.

Perhaps not surprisingly, several of the larger and more risk aware clinical trial outsourcing companies (CROs) are starting to set strict stipulations regarding the role of the EU legal representative. They are declining to take on the role of the legal representative unless all clinical trial activity is carried out by them.

This cautious approach is understandable, especially for large businesses which have a lot to lose. Companies seeking legal representative support in the EU typically are smaller companies and have no presence in Europe.. Add to that the possibility that EU legal representatives will only be required for “riskier” trials then should something go wrong – however unlikely that is – the CRO partner stands joint and severally responsible for the failings of the sponsor. And that could be extremely costly.

Given that the EU legal representative role is not by any manner or means the most lucrative aspect service delivery to trials, it does seem like an unbalanced risk/reward profile for all but the most specialist providers to take on this role.

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