Draft Regulation on clinical trials - Abolishment of obligatory insurance

By Evelyn Tjon-En-Fa


In July 2012 the European Commission published its proposal for a "Regulation on clinical trials on medicinal products for human use" (COM 2012 369 final). This proposal is intended to repeal Directive 2001/20/EC, which has been widely criticised by many stakeholders – including the pharmaceutical industry, clinical researchers, academics and patients – for being excessively bureaucratic. A key objective of the legislative proposal, therefore, is to reduce the administrative costs and operational burden for sponsors and investigators. The proposal entails abolishment of obligatory insurance of study subjects for sponsors.

Directive 2001/20/EC

Clinical trials are investigations in human subjects intended to discover or verify the clinical, pharmacological and/or pharmacodynamics effects of one or more Investigational Medicinal Products (IMPs), in order to assess the safety and/or efficacy of these medicinal products. The Clinical Trials Directive (Directive) introduced requirements for inter alia the protection of the rights, safety and wellbeing of subjects participating in these trials in the EU. The main purpose was to ensure the safety and rights of subjects, and the reliability of data generated in a clinical trial, through the harmonization of regulation of clinical trials in the European Union.

However, the medical field has long been complaining that the current Directive puts Europe at a disadvantage in the competition for research funding. For example, in 2007 there were more than 5,000 applications to conduct trials in the EU — but by 2011, that number had dropped to 3,800. At the same time, costs for bureaucracy and resource requirements to handle paperwork have doubled, and delays have increased by 90% [19]. According to the Commission and various stakeholders this is due to separate submissions and diverging assessments of applications for the same clinical trial conducted in different Member States.

Proposal Clinical Trials Regulation

In order to resolve the issues coming forth from the Directive, the Commission came up with a proposal for a Regulation. The legal form of a Regulation warrants direct applicability of the rules in all Member States and minimizes divergent interpretations on applicability of the European rules within the Community Member States - uniform implementation of the rules concerning clinical trials is envisaged.

The proposed Regulation is aimed at "cutting the red tape and bringing patient-oriented research back to Europe, while restoring the Union’s competitiveness in clinical research" [20]. In order to reach this goal the proposal introduces, for example, a new authorisation procedure based on a single portal and a harmonised authorisation dossier.

As the Directive was heavily criticized for imposing the same burden on all trials – regardless of the risks involved – the Commission wanted to adopt a more proportional approach to the assessment of clinical trials. The proposed Regulation therefore introduces a new category of “low-intervention clinical trials”, for which the assessment timelines are shorter and simplified administrative requirements apply. One of these simplified requirements is the abolishment of obligatory insurance.

Abolishment of Obligatory Insurance for Clinical Trials 

The 'obligatory insurance' was introduced with the implementation of Directive 2001/20/EC. This insurance was meant to cover damages to be paid to the subject by the sponsor and investigator in case of liability for injury or death [21].  However, according to the Commission, the relevant insurance market is small and costs for insurance coverage increased disproportionately. The insurance fees rose by a staggering 800% for industry sponsors of trials since the implementation of the Directive, but there is no evidence that the number of damages has increased. Moreover, as liability regimes differ widely between Member States, it is difficult and burdensome for the sponsor of a multinational trial to obtain insurance in accordance with all those national legislations.

The National Indemnification Mechanism 

Therefore, the proposed Regulation introduces an obligation for each Member State to establish a national indemnification mechanism. This national indemnification mechanism compensates subjects in accordance with the laws concerning liability of sponsors and investigators of that Member State. This damage compensation shall be provided independently of the financial capacity of the sponsor and the investigator [22].  The use of the mechanism by the sponsor will be free of charge if the clinical trial is not intended for obtaining a marketing authorisation for a medicinal product [23].  This shall help in particular 'non-commercial sponsors' (such as academic hospitals) to obtain coverage for possible compensations. For all other clinical trials (such as clinical trials within the scope of obtaining marketing authorisation), the use of the national indemnification mechanism may be subject to a fee. The sponsor may still choose to take out insurance. That fee has to be established by the Member State on a not-for-profit basis, taking into account the risk of the clinical trial, the potential damage, and the likelihood of the damage.

The proposed Regulation acknowledges that clinical trials do not in all cases pose an additional risk to subjects compared to treatment in normal clinical practice. Consequently, where there is no additional risk, or where that additional risk is negligible (the so-called "low-intervention" clinical trials), it is not necessary to provide a specific damage compensation for the clinical trial. According to the Commission, in these cases either the regular professional indemnity insurance of the medical practitioner or of the institution (the hospital or the Contract Research Organisation) or the product liability insurance of the sponsor will generally provide sufficient coverage.

However, with respect to product liability, the following may be noted. Pursuant to Directive 85/374/EC on product liability, it may be questionable whether the manufacturer could be held liable for its (putatively) defective product since the product may – when used within the scope of a clinical trial - either not have been put into circulation [24] (yet), or the product may not have been manufactured with the aim of sale or was distributed by him in the course of his  business [25]. Besides, within the purpose of studying a new possible indication for a medicinal product for which a marketing authorisation has already been granted, it could be discussed whether such use is 'the use to which it could reasonably be expected that the product would be put' [26]; Moreover, in case of damage due to a defective product within the scope of a clinical trial, the injured person is required to prove the damage, the defect and the causal relationship between defect and damage [27].

According to the proposed Regulation, the national indemnification mechanism is therefore not applicable to low-intervention clinical trials. It is not clear (yet) how to interpret the term "low-intervention".

Article 2(3) of the proposal outlines the criteria for low-intervention, including the fact that the trial procedures should "not pose more than minimal additional risk or burden to the safety of the subjects compared to normal clinical practice in any Member State concerned". This definition still requires a determination as to which trials pose "minimal additional risk or burden". For now, the term seems open to interpretation. Obviously, it needs to be experienced whether clinical trials, assessed as 'low-intervention', will ever give rise to high damages.
Finally, it is noteworthy that in cases where damage caused to the subject in the course of a clinical trial leads to civil or criminal liability of the investigator or the sponsor, the conditions for liability, including issues of causality and the level of damages and sanctions, remain governed by national legislation. According to case law of the Court of Justice of the EU, the applicable laws should ensure that in clinical trials with non-authorised investigational medicinal products, or if the intervention poses more than an insignificant risk to subject safety, compensation for damages can be successfully claimed. As mentioned above, invoking product liability within the scope of a clinical trial may be somewhat more difficult than it may seem at first sight – especially when considering that the burden of proof of the damage, the defect and the causal relationship between defect and damage, lies with the injured person.

Next steps

Following the ordinary legislative procedure the proposal must now navigate the European Parliament and Council of Ministers before it can become law. It will be discussed in the European Parliament during the second part of this year, with a vote in the Committee being (provisionally) scheduled for 24 April 2013. Final approval is not expected before 2014, which means that the proposed Regulation could come into effect in 2016 at the earliest.

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[18] http://www.cbg-meb.nl/CBG/nl/humane-geneesmiddelen/actueel/Overgangstermijn_Tissue_Engineered_Products_verloopt_per_31_december_2012/default.htm, and: www.igz.nl
[19] European Commission, Proposal for a Regulation on Clinical Trials, COM (2012) 369 final. 
[20] European Union, Press release 'Proposal for a Clinical Trials Regulation' <http://europa.eu/rapid/press-release_MEMO-12-566_en.htm, 17 July 2012.
[21] Article 3 (2) sub f of Directive 2001/20/EC. 
[22] Article 72 of the proposed Regulation. 
[23] Article 73(3) of the proposed Regulation.
[24] Article 7(a) of Directive 98/374/EC 
[25] Article 7(c) of Directive 98/374/EC 
[26] Article 6 of Directive 98/374/EC 
[27] Article 4 of Directive 98/374/EC