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Impact of Significant Payments
of Other Sorts (SPOOS) on
Clinical Research
12th Annual Cost and Contract
Management for Clinical Trials
Sept 28, 2005
Michael A. Swit, Esq.
Vice President, Life Sciences
THE WEINBERG GROUP INC.
Linda G. Strause, PhD
Exec. Director, Global Site Development
CancerVax Corporation
Outline of Session
Part I – The Law of SPOOS –
Michael A. Swit, Esq.
Part II – SPOOS in Action
Linda G. Strause, Ph.D.
Part III – Q & A
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Part I
The Law of SPOOS
Michael A. Swit, Esq.
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Financial Disclosure – the
Basics
 Goal -- Reduce potential for bias in clinical
studies and enhance human subject protection
 Way to Achieve Goal – Applicants Disclose
“Financial Interests” of Investigators or Certify
Their Absence
 How implemented by FDA
 FDA Rules @ 21 CFR Part 54; Feb. 2, 1998 –
published in F.R.; effective 1 year later
 FDA Guidance: “Financial Disclosure by Clinical
Investigators” – March 20, 2001
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Whose Interests Are Subject to
Disclosure or Certification?
 Those held by
 Investigators and subinvestigators and their family
members (aggregated interests)
 March 2001 Guidance specifically exempts “nurses,
residents, or fellows and office staff who provide
ancillary or intermittent care but who do not make
direct and significant contribution to the data”
 Received From:
 “Sponsor of the covered clinical study” – i.e., the
person who gave support at the time study carried
out
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The Five Types of Financial
Interest Subject to Disclosure
 Five types of compensation and rights
(collectively “Interests”) are the primary
focus of the regulation
 SPOOS -- Direct payments of more than
$25,000.
 excludes the costs for the conduct of clinical studies
 includes honoraria, grants to fund ongoing research,
compensation for or in the form of equipment or
services, or retainers for ongoing consultation
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The Five Types of Financial
Interest Subject to Disclosure
 Equity interest of more than $50,000 in a
publicly traded company
 Ownership interest, stock, stock option or
other financial interest, no matter how
small, the value of which cannot be readily
determined through reference to public
prices, (e.g., any privately held company or
unlisted equity interests)
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The Five Types of Financial
Interest Subject to Disclosure
 Proprietary interest in the investigational
product
 including, but not limited to, patents,
copyrights, trade secrets, and licenses
 Financial arrangements under which the
compensation (e.g., money, equity interest,
royalty interest) could be higher for a
favorable trial outcome than for an
unfavorable trial outcome
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Other Key Rules Governing
Financial Disclosure
 “Covered Study” is:
 a trial that FDA or the sponsor relies on to
establish that the tested product is effective OR
 a study in which a single investigator makes a
significant contribution to the demonstration of
safety
 FDA is particularly concerned with Phase II and III
trials (efficacy) and bioequivalence studies where
results obtained by a single investigator can have
a profound statistical effect on trial outcome
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Other Key Rules Governing
Financial Disclosure
 “Covered Study” is: …
 In general, large open-label studies conducted
at multiple sites, treatment protocols, Phase I
tolerance studies, pharmacokinetic studies, and
most clinical pharmacology studies are not
“covered” studies
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How Disclosure Occurs
 In marketing submissions:
 NDA & ANDAs (e.g., applies to bioequivalence
studies)
 PMAs and 510k’s (with clinical data)
 BLAs
 Device Reclassification petitions
 OTC Monograph Petitions
 Mechanism – via a form
 3354 – no interests to disclose
 3355 – interests required to be disclosed and
steps made to minimize bias
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Getting the Scoop on SPOOS
 Finding the law of SPOOS …
 in the Feb. 2, 1998 Federal Register -- --see preamble to the Final Rule
 binding advisory opinion
 read very carefully
 The rest is commentary …
 The March 2001 Guidance document
 FDA presentations at DIA, RAPS, etc.
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What is a SPOOS?
 Direct “payments” > $25,000 -- aka
“Significant Payments of Other Sorts” or,
more precisely, per 21 CFR 54.2(f), means
payments made by the sponsor of a covered
study to:
…the investigator or the institution to support
activities of the investigator that have a monetary
value of more than $25,000, exclusive of the costs
of conducting the clinical study or other clinical
studies (e.g., a grant to fund ongoing research,
compensation in the form of equipment or retainers
for ongoing consultation or honoraria) during the
time the clinical investigator is carrying out the
study and for 1 year following the completion of the
study.”
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“….payments”
Remember – this is a noun – thus, we
are describing types of remuneration
Rule – silent directly, but indirectly
(“e.g.”) makes clear can include:
 honoraria
 equipment
 retainers for consultation
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“….payments”
 Preamble – fairly silent on what’s a payment
other than those examples actually in the
Rule.
 exception – FDA: no duty to disclose competing
interests that also could bias the investigator (see
Comment #17)
 Guidance – travel expenses added to mix
 excessive; or
 for other family members (FAQ #26)
 Common sense – has an immediate or
measurable value – arguably is a payment; if
your friendly CPA would regard as income if
you were a sole proprietor
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“….by the sponsor.”
 “By”
 what if made by someone else, but the money
came from the sponsor originally?
 might look to CME rules for guidance
 conspiracy to avoid 21 CFR 54?
 “Sponsor” -- per 21 CFR 54.2(h) = “…the
party supporting a particular study at the time
it was carried out” –
 thus, the “applicant” – a term itself defined in 21
CFR 54.2(g) – may not be “sponsor”
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“….sponsor…”
 Preamble: silent
 Guidance:
 whoever provides “material” support (either money
or test product)
 “sponsor” here is not same as some other FDA
regulatory definitions of sponsor (e.g., 21 CFR
312.53 and 812.43, where a “sponsor” is someone
who submits a marketing application)
 Common sense: usually whoever pays the
bills
 Trap for the unwary – a CRO can be a
sponsor under Guidance if it provides things of
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value to CI’s (FAQ #9)
“….to the investigator”
 21 CFR 54.2(d) defines “clinical investigator”:
“…means only a listed or identified investigator or
subinvestigator who is directly involved in the treatment
or evaluation of research subjects. The term also
includes the spouse and each dependent child of the
investigator.”
 PhRMA – companies err on side of inclusion
out of fear of omission leading to regulatory
challenge by FDA
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“….to support activities of the
investigator....”
 “Support”
 FDA – little written on its precise meaning
 presumably, it’s inverse of a study cost
 “Activities of the investigator”
 what if give money for “indirect” reasons –
 agreement not to study anyone else’s NSAID?
 scholarship/fellowship funds
[allows institutional funds to be used for other
purposes; indirectly leaving more money for CI’s
activities]
 general grant to CI’s Dept.?
 Guidance – “direct support” (FAQ #25)
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“….that have monetary
value…”
 When is value measured?
 at initial donation?
 $75,001 piece of lab equipment; 3-year depreciation;
study takes 2 years; do you need to disclose?
 at end of study?
 How long does it have to stay >$25G?
[contrast here to stock; which is not SPOOS]
 What if value fluctuates – rarer; could
happen – e.g., donated raw materials for
experiments; Rule and Preamble are silent;
Guidance – only addresses stock fluctuations
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“….of more than $25,000….”
 Thus, must be at least $25,000.01.
 Picayune lawyer’s observation # 1 – Guidance
incorrectly says “$25,000 or more”
 Aggregate payments relative to the >$25G
threshold?
 Rule – silent
 Preamble – silent
 Guidance – “cumulative monetary value”
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“….exclusive of the costs of
conducting the study or other
clinical studies…..”
Exclusion – necessary or you would be
disclosing the study costs themselves;
presumably those are “for services
rendered” and/or direct expenses
Costs – what is a cost:
 overhead – what if excessively allocated to
the study?
 profit allowed?
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“…(e.g. a grant to fund ongoing
research, congratulation in the form of
equipment or retainers for ongoing
consultation or honoraria)…”
 By including some examples, does NOT
exclude others meeting definition
 Specifics listed:
 a grant to fund ongoing research
 compensation in the form of:
 equipment, or
 retainers for ongoing consultation, or
 honoraria
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“during the time the clinical
investigator is carrying out the
study”
 When does a study begin?
 Guidance – by implication, cites to 21 CFR
312.53 and 812.43 as keying when an
investigator’s involvement in a study starts (FAQ
#6)
 Why important?
 what if there was a payment just before site
initiation cleared, but the protocol has been
signed?
 IND on file naming that investigator?
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“….and for 1 year following
completion of the study...”
 Varies – no hard and fast rules
 But, what if the investigator’s role in the study
ends on 12/31/02, but the study continues at
other sites for more than a year thereafter?
 Guidance – flexible; can make site specific (FAQ
#14)
 Be sure to establish up front and stick by it
and make sure the investigators understand
the measure
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Part II
SPOOS In Action
Dr. Linda G. Strause
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SPOOS in Action
From study start to study finish:





Site Selection
Site Qualification
Study Conduct
Study Closure
Submission of application
27
SPOOS in Action
From study start to study finish:





Site Selection
Site Qualification
Study Conduct
Study Closure
Submission of application
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Site Selection
Investigator and institution/site
experience
Ability to conduct the study
 additional requirements?
Completion of the 1572
 who is to be listed?
SOP: guidance not always clear
 define in SOP
Can’t start study without obtaining
financial info – 21 CFR 314.53(c)(4)
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Site Selection
Standard Operating Procedure -- Key
points
 Make sure that includes provision to
possibly follow up with FDA – prior to
initiating the study -- to determine, if there
are disclosed financial interests, whether:
 Study size impacts bias
 Other efforts are needed to minimize bias
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Minimizing Bias in Event of
Financial Disclosure
 Key – take the action early; you will have to
describe it later in your marketing application
and you also may not be able to address
effectively later
 Possible angles:




multiple study sites/investigators
blinding
objective endpoints
randomized assignment of patients to treatment v.
control groups
 have someone other than investigator measure
subjective endpoints
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SPOOS in Action
From study start to study finish:





Site Selection
Site Qualification
Study Conduct
Study Closure
Submission of application
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Site Qualification
 Who is to be on the 1572 and why?
 Anyone on 1572 must complete Financial
Disclosure form/questionnaire
 Do you review completed form at the IND
stage (remember – no need to submit to
FDA at this point)?
 Yes, to assess potential a conflict will bias study
 Other studies of same sponsor?
 KOL on another study? (Marketing)
 SPOOS: contracts department?
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Site Qualification
 1572: Review carefully
 21 CFR 54.2(d) defines ‘clinical investigator’:
“...means only a listed or identified
investigator or sub investigator who is
directly involved in the treatment or
evaluation of research subjects. The term
also includes the spouse and each
dependent child of the investigator.”
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Site Qualification
 Sponsor vs. Study:
 Equipment provided by sponsor for
another study?
 Identified as KOL by marketing team for
another therapeutic indication by same
sponsor?
 How do you manage internally?
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SPOOS in Action
From study start to study finish:





Site Selection
Site Qualification
Study Conduct
Study Closure
Submission of application
36
Study Conduct
Tracking investigator financial activity
Remember -- SPOOS:
“…payments made by the sponsor….to
investigator or the institution….a monetary
value of more than $25,000, exclusive of
the costs of conducting the clinical study
or other clinical studies…)
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Study Conduct
Examples: (>$25,000)
 Honoraria
 Equipment



DEXA
Biosafety hood
Electron
microscope
 Cumulative: fax
machine, water
bath, transporter
 Speakers bureau
 KOL activities
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Study Conduct
Cumulative monetary value:




over duration of study?
multiple studies?
all monies received?
maintenance costs?
 What if returned – or Not?
 Depreciation: over time, across
studies
 What if 100% utilization is for your
study?
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SPOOS in Action
From study start to study finish:





Site Selection
Site Qualification
Study Conduct
Study Closure
Submission of application
40
Study Closure
 End of study


Guidance doesn’t define
Your protocol should!
 What if investigator leaves before study
ends?
 Tracking of documents –
 Site – know how they’re organized in case PI
leaves
 One year follow-up
 Make sure in SOP in case sponsor study team
changes
41
Study Closure
Hire a PI to find the PI?
42
SPOOS in Action
From study start to study finish:





Site Selection
Site Qualification
Study Conduct
Study Closure
Submission of application
43
Submission of Application
 Required disclosure/certification must be
included in marketing application [NDA, BLA,
PMA, 510(k)]
 If not included, FDA may refuse to file
application.
 If FDA determines that the information
disclosed raises a serious question about the
integrity of the data from a clinical trial, the
agency claims the authority to take actions;
 auditing or reanalyzing data
 refusing to accept the trial as providing data that
can support marketing approval
 making you do a new study
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Submission of Application
 Responsibility of sponsors –
Recommendations:
 Compliance with regulations should be a part of
selection process and documented
 Clinical Trial Agreements (CTA) should contain
provisions requiring compliance with disclosure
regulations (CROs, licensing agreements)
 Establish and maintain tracking system for
investigator disclosure
 Collateral issue – SEC compliance on PI insider
trading
 Establish and implement tracking system for types
of interests paid and how managed
45
Submission of Application
 Hire an Accountant to Calculate and Track!
 Irony -- ~ 1% of investigators are impacted!
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SPOOS in Action
THANK YOU !!
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Other SPOOS Considerations
 The Jesse Gelsinger scenario -- If an
investigator has a significant financial
interest, has that been adequately disclosed
in the study’s informed consent
documents??
 California – Moore v. Regents – financial
interest is an element of informed consent
 Other entities may also impact financial
disclosure duties, such as:
 the investigator’s institution (e.g., university
or hospital) may have separate rules with
different, lower thresholds
 HHS rules may apply as well (e.g., if federally
funded); and are not identical
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Tired of SPOOS
A few truly obscure things to know
about SPOOS:
 According to CDRH, applies to
payments made for “consolation” –
means you have to disclose if they pay
you for failing results?
 on Wall Street, “SPOOS” is the
nickname for the Standard & Poors 500
Futures Contract
 a SPOO is a life form on the TV show
Babylon 5
 rule was created on Groundhog’s Day
 [some of foregoing brought to you
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courtesy of Google®]
Part III
Q&A
50
MORE QUESTIONS?
Linda Strause, Ph.D.
CancerVax Corporation
[email protected]
1-760-494-4224
San Diego Hospice & Palliative
Care
[email protected]
1-858-509-9054
51
MORE QUESTIONS?
Call, e-mail, fax or write:
Michael A. Swit, Esq.
Vice President, Life Sciences
THE WEINBERG GROUP INC.
336 North Coast Hwy. 101
Suite C
Encinitas, CA 92024
Phone 760.633.3343
Fax 760.633.3501
Cell 760.815.4762
D.C. Office 202.730.4123
[email protected]
www.weinberggroup.com
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