Debarment Certification: A Must-Have in Any Clinical Trial Agreement

December 17, 2018

The debarment certification is one of the sections of central importance in a clinical trial agreement (CTA). This certification is a representation or warranty made by the institution, principal investigator, and, if applicable, affiliated hospitals or third-party facilities, that it is not debarred, disqualified or banned by the FDA from conducting clinical trials.

The FDA’s draft guidance document, Submitting Debarment Certification Statements, sets out the agency’s position for sponsor’s debarment certification. That guidance includes the FDA’s suggested wording for the certification statement:

[Name of the applicant] hereby certifies that it did not and will not use in any capacity the services of any person debarred under Section 306 of the Federal Food, Drug and Cosmetic Act in connection with this application.

The sponsor relies upon the institution’s (and any other applicable entity’s) compliance with this provision when submitting its certification to the FDA. Often, however, institutions push back on this language and ask to include a qualifier, such as “to the best of our knowledge.” Sponsors should reject this or any similar qualification related to knowledge. In other words, the sponsor — and, in turn, the study sites — must certify that it’s not using debarred individuals, not just that it has no knowledge of debarred individuals involved in the study.

Often, the request to include such qualifying language stems from the institution’s large size and inability to know at all times the status of every individual employee, supplier or party conducting the study on its campus. There is a legitimate concern that without qualifying language like “to the best of our abilities,” the institution could be held liable for a debarment issue it didn’t know about. On the other hand, the FDA has specifically stated that such qualifying language doesn’t meet its standards.

The balancing of the institution’s need to ensure its compliance with the contract and the sponsor’s need to submit an acceptable debarment certification requires the drafter to find an acceptable compromise. This is often achieved by adding a “diligent inquiry requirement.” This allows the institution to keep a qualifying statement, but it also certifies that it has performed an actual inquiry of their employees involved in the study.

As for particular language, it can be as robust or as lean as necessary. Certain sponsors will want a narrowly targeted clause detailing what that “diligent inquiry” will include, whether that is an annual check of debarment lists or other actions. Others, however, will be satisfied with a statement guaranteeing that due diligence has been performed. A sponsor might consider a phrase like “to its knowledge after diligent inquiry.”

These details will come into play during the negotiation of the agreement and, depending on the risk tolerance of your client, come down to what the parties can come to an agreement on as to how much specificity will be needed in this section.

Mutual Debarment Certification

Another issue that may arise in negotiation is determining whether the debarment certification in the CTA should be unilateral or mutual. In other words, whether both the sponsor and the site should certify to each other that neither is debarred or using debarred employees or suppliers in the conduct of the study.

The language change for mutual certification would be fairly straightforward. You could, for instance, rewrite the statement to read:

Each Party represents and warrants that neither it nor any of its respective employees, agents, suppliers or persons conducting the study have been debarred, disqualified, or banned by the FDA from conducting clinical trials or is under investigation by the FDA or any equivalent regulatory authority outside the U.S. for debarment, disqualification, or any similar regulatory action.

However, from the sponsor’s perspective, this likely will seem unnecessary since there isn’t a regulatory penalty for an institution that contracts with a debarred individual.

Since the sponsor is charged with filing the application to the FDA, it’s the sponsor that bears that regulatory weight. On the other hand, if you are representing the interest of the sponsor, chances are the sponsor is not debarred, and so making such a certification, if it’s something the institution requires, shouldn’t be problematic.

If the issue comes up in negotiation, a recommended solution is to keep the certification one-sided — the institute certifying itself to the sponsor — but add a separate certification in which the sponsor affirms that it is not debarred or excluded from participation in relevant federal programs.

By separating them, the sponsor gives the institution what it needs while not having to revise certain aspects of the institution’s certification that may not apply to the sponsor and vice-versa.

Excerpted from Clinical Trial Agreements: A Guide to Key Words and Phrases, by Eric Babineaux, Lead Legal Counsel, WCG Clintrax Global, Inc. Copyright 2018 by CenterWatch.