By Mike Slotznick, Esquire
You've been there. After fighting for months or years to win a research project from a pharmaceutical or medical device manufacturer - or just to get on its list of preferred vendors so that you're positioned to bid - the manufacturer presents you with a lengthy master services agreement or an equally lengthy one-off service contract.
The density and complexity of the words are mind-numbing. You sense that most of the language protects the client, not the researcher. But you fear that suggesting any changes in language could anger the client. Finally, in despair, you may figure that it's "all just legal boilerplate anyway," doesn't bear on the business relationship, and therefore is alright for you to sign as-is.
But not all of those suppositions would be accurate. Pharma and device manufacturers are often open to discussions of many of the legal provisions that appear in their form documents but that may be inappropriate and even dangerous for a particular transaction. Here are six healthcare-specific contracting points that a research company should seek - and that the client more often than not will appreciate.
1. Limitation of Liability
. Over the past dozen or so years, manufacturers have become familiar with researchers' requests to limit their liability for errors in their work product Ð such that, for example, a simple mistake on a small project doesn't give rise to a legal claim that would bankrupt the researcher. This may be the single most important "ask" for researchers in discussing the contract terms, and it's become a standard "ask" in our industry. (An additional way to protect your business is to purchase professional liability insurance, including through CASRO's program
, which is specifically tailored to marketing research.)
2. Restrictions on Physician Incentive Payments
. Federal and state laws in this area are a moving target, but currently only a few jurisdictions impose restrictions. Nonetheless, pharma clients are beset by many "urban legends" about states in which researchers should not interview physicians. CASRO and the Pharmaceutical Marketing Research Group (PMRG) can provide their members with specific information as to the few states that restrict such interviews and verify those that do not. Then in the project specifications, the parties should determine not to forego useful research in states where no restrictions exist; and to either avoid research in the others, or to advise respondents in advance that the payments they receive will be reported.
3. Social Media Monitoring
. As this methodology gathers momentum in healthcare research, the contract should adhere to CASRO's thorough and thoughtful ethical guidelines on the topic
- much of which amounts to a rule of informed consent on the part of the data subjects.
4. Off-Label Marketing
. Manufacturers are keenly sensitive to the FDA's intolerance of off-label marketing, and to the serious penalties that can attend infractions. They commonly seek to keep such marketing out of any communications to physicians - including during the course of marketing research sessions. The manufacturer should agree to review all research questionnaires with this issue in mind, and to be responsible for any infractions that may arise.
5. Subpoena Costs
. If a manufacturer becomes the target of a private lawsuit or a governmental investigation, the records of its marketing researchers can be subpoenaed. The retrieval and legal costs associated with subpoena compliance can be expensive for a researcher, to the point of erasing the researcher's margin on the pertinent projects - or worse. So the manufacturer should agree to bear those costs when the research company itself isn't implicated in any wrongdoing. (Indeed, this can be a useful protection for research companies working in any industry sector.)
6. Adverse Event Reporting
. The agreement should state that because the researcher isn't expert at evaluating adverse events, the researcher should only be responsible to make good faith efforts in its reporting - not be liable for any misreporting. Additional limitations on the researcher's obligations are possible as well.
But why would a manufacturer agree to any negotiation of its terms at all, when so many researchers are hungry for the manufacturer's business? My answer: because many manufacturers respect researchers who are as careful in their contracting controls as in their research controls; because manufacturers often appreciate an honest discussion, illumination and allocation of specific risks; because manufacturers' attorneys, when involved, understand what's fundamentally fair; and because many manufacturers' legal forms are meant for service providers generically and simply not tailored for marketing research engagements.
Counsel with experience in the marketing research industry can help researchers navigate these and many other contracting elements - including volume discount terms, exclusivity provisions and other "business" points - without antagonizing clients or otherwise upsetting business relationships. In custom marketing research, a reasoned and fair understanding and allocation of risk between the two parties is always preferable for both than an undue adherence to pre-existing legal forms.
Mike Slotznick's law practice is dedicated to the marketing research industry. In addition to representing research companies, he's legal counsel to the Pharmaceutical Marketing Research Group, an association of pharma and device manufacturers and their marketing research contractors. His Web site is www.MarketInformationLaw.com