CRO Engagement: A compliance checklist to identify red flags and prevent bribery compliance risks

Conducting international clinical trials poses various bribery compliance risks because of complex regulatory environment, including extensive oversight by local government regulatory agencies and review boards that are charged with the responsibility for ensuring that the trial is conducted in accordance with applicable regulatory requirements, global industry standards and good clinical practices. The need to obtain regulatory approvals in connection with clinical trial activity creates bribery compliance risks given the substantial financial incentives that exist for expediting the regulatory approval process, and these risks can be heightened when sponsors work with CROs that are outside of their direction and control. The complex nature of global clinical trials generally provides for challenging oversight of the CRO’s activities by the sponsor. The engagement of CROs also brings complex cost structures with difficult benchmarking and fair value assessments. As CROs are often used in emerging markets and are usually instructed to coordinate large parts of the clinical trial activities across multiple jurisdiction, they may also be interacting on a regular basis with public officials and authorized to pay regulatory fees and other payments to public entities, thereby increasing the overall bribery risk profile associated with their activity on behalf of the sponsor.

Potential bribery red flags to look out for when engaging a CRO in light of these heightened bribery risks include:

• The CRO indicates it has "good relations" with health care professionals (HCPs) / public officials/government agencies in the relevant jurisdiction;
• The CRO "guarantees" that it will expedite regulatory submissions, recruitment of researchers, and meet or exceed patient recruitment milestones in a timely manner without disclosing its approach;
• Lack of transparency with respect to the contractual arrangements between the CRO and its vendors or other participants in the clinical trial (e.g., sub-contracting with other CROs or working with Site Management Organizations ("SMOs" without appropriate documentation or transparency as to the respective roles of each participant);
• Lack of transparency with regard to the payment structure established by the CRO (including requests to perform services in one country but be paid in another country, or requests to be paid through a separate legal entity with unclear connections to the CRO performing the services);
• No documentation of any needs assessment for engaging the CRO or supporting the CRO’s actual use or processing of data from the clinical trial;
• No documentation of the CRO’s justification for selection of any particular site/investigator (e.g. no documentation supporting repeated selection of high volume prescribers, consultants, key opinion leaders, or frequent speakers);
• No detailed documentation of the actual services performed by the CRO;
• Agreements with/payments to individual investigators instead of sites;
• CRO wholly/partly owned by public officials in the relevant jurisdiction or their family members; and
• Personnel, financial, or organizational overlap between the CRO and investigators/HCPs/public officials or their family members in the relevant jurisdiction.

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

1. Risk-based due diligence procedures for CRO engagement and its selection of sites and investigators, including the identification of involved entities and individuals as well as the subsequent assessment of, inter alia, compliant historical relationships between the CRO with HCPs/public officials/government agencies, any financial connections between the CRO and subcontractors/HCPs/public officials/government agencies, and potential compliance risks and red flags associated with the CRO’s vendor contracts and payments to third parties.
2. Appropriate documentation of need of CRO involvement and objective selection criteria regarding the CRO engagement and its selection of sites and investigators.
3. Conclusion and documentation of written service agreements including, inter alia, robust 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. Milestone-based payment arrangements based on the clinical trial protocol and fully documented budgets based on a fair market value assessment.
5. On-going and proactive monitoring of, inter alia, receipt of services from the CRO, the fair market value of such services received from the CRO, and other potential red flags.

Authored by Désirée Maier and Vincent Rek