Considerations for Conducting International Clinical Trials

As a startup life science company, you are excited by the promising laboratory results for your novel drug, but you must first test the product’s safety and efficacy through clinical trials. To expedite the process, you work with a clinical research organization to conduct trials outside the United States. 

All goes well until a clinical trial participant in a foreign country experiences an unexpected side effect. The participant is hospitalized and ultimately passes away. To your surprise, the hospital refuses to release the body of the participant to her family unless you immediately pay the hospital bills. You have no local insurance in place to respond, despite recently enacted local laws requiring coverage. 

You are left with additional and unexpected costs, regulatory uncertainty, and significant delays. Your hopes for expedited approval of a blockbuster drug by the FDA have been dashed. 

Why Foreign Clinical Trials?

The scenario described above is just one example of an unexpected event that could derail a sponsor engaged in foreign clinical trials. 

Why would a start-up company complicate the clinical trial process by conducting trials outside of the United States? 

Even for start-ups, foreign clinical trials present distinct benefits.

From a scientific standpoint, foreign clinical trials allow a sponsor to enroll participants from a more diverse population. This could enhance the sponsor’s ability to show that trial participants better reflect the population most likely to use the drug and even broaden eligibility criteria, ensuring approval of the drug for use by a wider population. This is particularly important given the FDA’s increased focus on ensuring diversity in clinical trials. See June 2024 Draft Guidance, “Diversity Action Plans to Improve Enrollment of Participants from Underrepresented Populations in Clinical Studies”

From an economic standpoint, enrolling participants and conducting clinical trials in other countries may be significantly less expensive. Of particular note, the litigation environment outside of the U.S. is far less onerous and costly. Most foreign jurisdictions have “no-fault” or other alternative compensation schemes or require parties to pay their own attorney’s fees, thereby discouraging lawsuits and minimizing the cost to the sponsor if a participant is injured.

Foreign Clinical Trial Challenges

Foreign clinical trials do present significant challenges, not the least of which is compliance with ever-changing, country-specific laws and regulations. In the European Union, for example, a new regulation referred to simply as the “Clinical Trials Regulation,” EU Clinical Regulation 536/2014, came into force on January 31, 2022, repealing the Clinical Trial Directive. While the goal of the new regulation is to harmonize the rules applicable to clinical trials conducted across various EU countries, sponsors are still grappling with its implementation, especially regarding the specifics of obtaining informed consent from participants. Outside of the EU, requirements for conducting clinical trials may be completely different. Sponsors engaged in such trials will need to pay close attention to country-specific laws to ensure compliance.

Insurance Considerations for Foreign Clinical Trials

One essential consideration when pursuing foreign clinical trials is whether insurance coverage is required by law. In some countries, insurance for clinical trials is compulsory; in others, it is not. In some countries, including the United States, insurance may not be compulsory but is typically third-party coverage designed to protect the sponsor from claims brought by participants. In France and other EU countries, first-party coverage is the norm under which injured participants can seek relief directly from the insurance company. 

Another consideration is how medical expenses are addressed. Are such expenses paid under a country’s national health insurance?  Where national health insurance is not in place or will not respond, insurance coverage for medical expense payments is valuable. Paying an injured participant’s medical expenses upfront can sometimes serve as a form of claims mitigation. In theory, if an injured participant’s medical expense payments are satisfied without an assessment of fault, the participant is less likely to pursue a lawsuit against the sponsor. 

Even if a sponsor addresses a country’s compulsory insurance requirement for clinical trials, the vagaries of the country’s insurance law must also be addressed. In many countries, insurance obtained from an insurer based outside of the country is not allowed. “Admitted” insurance is required, meaning that coverage can only be offered by a local “admitted” insurer, i.e., an insurer approved by the country’s regulator to provide such insurance. 

The limits of insurance required to be in place for each trial may also vary from country to country, and in some countries, such as Australia, internally from region to region. In other countries, regardless of whether specific policy limits are mandated by law, ethics committees may impose their own limits requirements or request specific policy language before approving a trial.  

Even if the minimum coverage is provided, sponsors must consider how to protect themselves in the event of a catastrophic situation. Although local coverage may be obtained for the mandatory limits, these limits may be too low to protect the sponsor against an unexpected side effect resulting in injuries to numerous participants. 

To address this scenario, sponsors may back their country-specific, admitted policies with a “master” policy providing excess coverage or additional, broader coverage to address events excluded by the local policy. This coverage, known as “Difference in Conditions/Difference in Limits (DIC/DIL),” must be carefully evaluated to determine whether sufficient protection is afforded. 

The Path Forward

While pursuing clinical trials in multiple countries can provide sponsors with distinct benefits, the process is complex and subject to its own compliance risks. It is essential to consult with trusted insurance representatives that have relationships with insurance carriers skilled in providing foreign clinical trial coverage. Experienced brokers and insurers have trusted resources and alerts in place to identify local requirements and know when they change and will modify coverage products accordingly to ensure compliance with each country’s evolving laws and specific requirements. 

Authored by Maria-Cristina Smith, Berkley Life Sciences, AVP, Products & Professional Liability Specialist