CHAPTER EIGHT: Industry Awards and Agreements
Various types of awards to and agreements with the University of Louisville Research Foundation (ULRF) are made to support work at the University of Louisville. While all such agreements and awards must adhere to the basic policies of the University, there are often special considerations inherent in the acceptance of these awards. For example, industry sponsors may not limit spending to particular budget categories like federal funding sources do. Industry sponsors may give the PI/PD more latitude in expenditures provided the final project stays within budget. Clinical trials typically are budgeted on a per patient budget as contrasted with the per category budget common to most federal agencies. Industry sponsors may have less formal proposal review processes or the process from research project inception to final contract may be a more iterative process than the proposal submission, review and notice of award process typical of federal government agencies and non-profit foundations. Most clinical trial proposals begin with a non-disclosure agreement to review a protocol to determine if the PI/PD wishes to participate in the particular study. (If the sponsor requires an institutional signature on the non-disclosure agreement, use the OIC/NDA - REVIEW OF INDUSTRY SPONSOR SUPPLIED CONFIDENTIALITY/NONDISCLOSURE AGREEMENTS link on the EVPR Forms page.) Then a draft contract and budget are transmitted for review. After several iterations an acceptable agreement is executed and the research study begins.
8.1 Industry-Sponsored Agreements
The University of Louisville encourages interactions and research with the private sector. These interactions are essential to the vitality of the University and the community it serves and are recognized as an integral part of the University’s mission and goals.
An agreement outlining the responsibilities of the ULRF and the industry sponsor must be in place prior to beginning work on a project.See Deposit of Checks without a Properly Executed Agreement for details. The agreement must contain basic understandings including a successfully negotiated and agreed-upon statement of work, an agreement on the University's ability to publish--including a sponsor's right to review and comment but not to edit or have final approval over the University data or conclusions–and the ownership of intellectual property. The Office of Industry Contracts is responsible for negotiating the terms and conditions of such agreements.
Principal Investigators/Project Directors should be familiar with the following and convey these accurately to a potential sponsor during preliminary discussions. “A Guide to Industry” is available on the web to assist in this process. Sharing this basic information promotes better understanding between the parties and allows negotiations to proceed smoothly.
The following considerations are important in dealing with industry sponsors:
· The statement of work should be detailed enough to allow a clear understanding of the research project and the expected deliverables such as technical reports or prototypes.
· A fixed time period, with provisions for extension or renewal of the project, should be included. Provisions for mutual termination, such as would occur with the departure of a PI/PD or other unforeseen circumstances, should be stated.
· Full costs of the research, including recovery of the University corporate indirect cost rate, must be included in the budget.
· The University may neither warranty nor guarantee research products but will use best and reasonable efforts consistent with good scientific practices. Reasonable changes in research direction by the PI/PD should be allowed, and if the change is significant allowances for a cost adjustment included.
· For those projects with expenses not being invoiced on a periodic basis, some initial payment (typically 10-15% of the project budget) should be made at the time of execution of the agreement. Final payments should not exceed 20-25% of the total project budget.
When the above considerations are used as guidelines, the final agreement should be one that is mutually beneficial to the University of Louisville and the sponsor. A sample Sponsored Research Agreement is available at the Industry Awards and Agreements website.
Some industry sponsors obtain funding from federal agencies and will subcontract a portion of the research to the University. This is referred to as “federal flowthrough.” The F&A rate for research work which is funded by the federal government via industry must use the appropriate F&A rate for federally funded projects. In particular, SBIR and STTR proposals fall into this category.
8.2 Clinical Study/Trial Agreements
Clinical trial agreements provide for testing of a drug or device on a human subject. In addition to the considerations given above for industry sponsored agreements, other considerations apply to clinical trial agreements:
. Clinical trials expose the investigator and the ULRF to legal action by third parties claiming to be harmed directly or indirectly by the research protocol. Therefore, industry sponsored clinical trial agreements must include an appropriate liability/indemnification clause.
· Clinical trials carry a risk for unanticipated adverse effects, injuries, illnesses or reactions and the sponsor is normally expected to pay for any injuries to subjects resulting from the use or application of the sponsor's investigational drug or device in the study.
· The agreement must contain a statement that indicates that the sponsor supports the principles of the Belmont Report, the Helsinki Report, Good Clinical Practices or some statement indicating that the sponsor supports accepted research practices that protect human subjects in research.
· The agreement must allow for the maintenance of the confidentiality of patient records and be in conformity with applicable privacy laws and regulations (e.g. HIPAA).
· The sponsor must use protected health information in accordance with the HIPAA-compliant research authorization and conduct the study in accordance with the provisions outlined in the informed consent to the subject.
· The agreement should address the ability for the University and/or PI(s) to be able to publish study results. For multicenter, industry sponsored and industry developed protocols, the PI may request, with department head concurrence, a waiver of his/her right to publish provided the sponsor is willing to publish or make the results public within two years of the clinical trial’s completion.
Some clinical trials are operated or coordinated by a Contract Research Organization (CRO). The CRO executes the agreement with the Institution and manages the trial on behalf of the sponsor. It is important to determine which entity, the CRO or sponsor, will be making the payments and include this information on the appropriate transmittal form. See FAQ on the MIRA home page for details about which transmittal form to use. (e.g. MIRA). If there is a CRO involved, typically a separate letter of indemnity (LOI) is obtained from the sponsor.
A Sample Clinical Study Agreement is available at the Industry Awards and Agreements website.
8.3 Service Agreements
Service agreements enable the conduct of a specific procedure, usually on specific material supplied by the sponsor. An example would be the testing of a sponsor-furnished compound with University-owned equipment. The agreement should reserve the right to use the results for academic and research purposes, including publication of overall results or methods.
Financial considerations include recovery of the full direct costs and the corporate F&A rate. If equipment purchased with federal funding is used, the revenue may be accountable as program income to the federal award. Arrangements must be competitive with costs assessed by commercial organizations for comparable work and may be subject to unrelated business income tax.
The University’s standard Service Agreement is available at the Industry Awards and Agreements website.
8.4 Equipment Loan Agreements
If a University researcher wishes to participate in a joint research program involving the loan of equipment such as hardware or software for research use, the agreement should minimize ULRF risk and liability and should define the responsibility for maintenance and the disposition of the loaned equipment. The department should contact the University’s Risk Management office to address the risk of loss of such loaned equipment.
8.5 Material Transfer Agreements
8.6 Special Considerations for Budgeting of Industry Awards
Industry awards may be budgeted by category like most federal agency-sponsored awards, or they may provide only an overall budget with no budgets for individual categories. For new budgets established after the implementation of PeopleSoft release 8.8, industry awards with budget categories will have the prefix of OICB (instead of GRNT.) Typically most clinical trial budgets are non-category budgeted because the sponsor is making payments on a per patient or milestone basis. For new budgets established after the implementation of PeopleSoft release 8.8, industry awards without category budgets (i.e. non-category budgeted) will have the prefix of OICN (instead of GRNT). If an industry sponsor does not require category budgeting, the PI/PD should indicate this in the budget section of the appropriate transmittal forms (e.g. PCF, MIRA).