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Clinical trial fraud has come under the microscope at two of the largest federal overseers – and life sciences companies need to take notice.  

In December 2021, U.S. Department of Justice (DOJ) Deputy Assistant Attorney General Arun Rao identified clinical trial fraud as one of four key areas of enforcement focus during his address at the Food & Drug Law Institute’s (FDLI) 2021 Enforcement, Litigation and Compliance Conference. However, clinical trial fraud isn’t only on DOJ’s radar. The U.S. Food and Drug Administration (FDA) has also made it clear that this type of fraud will be subject to close examination now and in the near future.  

This increased scrutiny is ramping up. General regulatory enforcement in the life sciences industry took a back seat throughout much of 2020 and 2021 when the focus in life sciences enforcement was squarely on the COVID-19 pandemic. While that is still the case in some respects, priorities are beginning to shift. 

In fact, enforcement actions and guilty pleas in clinical trial fraud cases are being made public. In July, two Florida medical study coordinators pleaded guilty in connection with their participation in a conspiracy to falsify clinical trial data by making it appear as though subjects were participating in trials when, in truth, they were not. Similarly, a Miami physician recently admitted to falsifying research data and patient participation figures in a pediatric asthma trial.  

Buchanan’s George Karavetsos is the former director of FDA’s Office of Criminal Investigation. With that unique perspective, he can say with confidence that clinical trial fraud will remain in FDA’s sights for years to come. With both the FDA and DOJ making clinical trial fraud an area of enforcement focus, life sciences companies and trial sponsors must take notice. The consequences for committing fraud can be severe, and include potential clinical holds, site shutdowns, reputational damage with the public and regulators, multimillion-dollar losses, and even prison time.  

Fraud can take place during any clinical trial – even those with well-meaning trial sponsors that have good intentions and significant compliance resources. As someone with deep experience advising a variety of pharmaceutical companies – plus a Ph.D. in molecular biology – Barbara Binzak Blumenfeld has seen it firsthand. In light of this intensified scrutiny, any life sciences company taking on the role of trial sponsor will need to strengthen its internal controls and ensure that federal regulations are being followed.  

Here are a few steps clinical trial sponsors should take to protect themselves from a potential investigation into fraudulent clinical trial practices. 

1. Perform thorough due diligence before hiring a CRO

Sometimes, accusations of fraud during clinical trials can come as a result of a contract research organization (CRO) not meeting FDA requirements or having issues with its reporting responsibilities. In the past, CROs have been held liable and sponsors have avoided any criminal penalties for the conduct of the CRO. However, this may be changing. Although some pharmaceutical companies may find it difficult to closely monitor a CRO’s activity when there are dozens of clinical sites operational at the same time, it is the sponsor who ultimately remains responsible for how a clinical trial is conducted. 

Because of this, trial sponsors need to be absolutely sure they’re working with a CRO they can trust. Before contracting with one, sponsors should conduct their due diligence to ensure the CRO has a quality reputation and can address any enforcement-related issues. Asking for references and engaging a law firm to assist with this due diligence are other important steps to ensure you’re working with a dependable CRO.  

2. Perform consistent and regular audits of data and trial sites

Fraud is typically identified by investigators in two key places – at physical clinical trial sites and in the reported data. Sponsors must perform thorough audits at trial sites, in addition to reviewing all data coming out of those trial sites, to ensure the findings are legitimate. These audits should be performed throughout the trial and without warning to ensure that all federal rules and requirements are being followed. These audits should be conducted based on clear standard operating procedures that are specifically designed to identify fraud and correct it.  

Hiring a CRO through a law firm—and bringing legal counsel to trial site audits—will help ensure that communications and any findings are protected by the attorney/client privilege. If fraud is detected, having legal counsel can be beneficial to the sponsor and position it more favorably should an investigation arise, and may help to avoid a clinical hold or trial site shutdown.

3. Increase oversight of decentralized trials

The COVID-19 pandemic has accelerated the adoption of decentralized clinical trials so that study subjects do not have to travel to centralized clinical trial sites. While this model has helped to improve subject recruitment and participation, it does introduce additional trial monitoring and oversight challenges. The use of in-home subject monitoring, with or without the assistance of a clinical trial nurse for example, increases the possibility of fraud. Therefore, whenever conducting a decentralized trial, sponsors must understand the risks of doing so and increase their level of scrutiny accordingly.  

4. Thoroughly monitor foreign and international trials 

Many life sciences companies are performing trials over diverse geographical areas, sometimes partially or entirely outside of the U.S. Although this approach can increase enrollment, it also makes oversight more difficult. Different governments also have different rules and regulations governing clinical trials, which means ensuring that the trial complies with multiple sets of legal requirements.

FDA has released updated guidance on foreign trials that sponsors should review closely when conducting trials overseas. Sponsors must also be careful to avoid improper payments to foreign government officials that could create a conflict of interest or violate the Foreign Corrupt Practices Act. These individuals can include those affiliated with foreign government-controlled corporations, medical centers, or educational institutions. Implementing proper trainings, procedures, and policies can help prevent making improper payments to foreign researchers, research institutions or CROs, and to take corrective action if it does occur.  

5. Consider investing in high-quality tracking and automation technology

Artificial intelligence (AI) driven technology has emerged that makes recording data and monitoring subjects a much more streamlined and accurate process, especially in remote or decentralized clinical trials. AI driven technology has become highly sophisticated and can monitor subject adherence with trial protocols. For example, AI can detect certain subject behavioral patterns, such as avoidance of taking the medication. Likewise, AI also can eliminate human error when recording information, and can speed and enhance data analysis. As this technology continues to become more available and affordable, trial sponsors should consider implementing it in ways that help reduce the risk of fraud.  

Decreasing fraud with experienced legal and regulatory counsel    

Life sciences and adjacent companies should view the increased scrutiny we’ve seen over the past few months as just the tip of the iceberg. The DOJ and FDA have made it clear that it’s never been more important to partner with experienced counsel when sponsoring a trial to avoid any potential fraud. By working with the right legal counsel, life sciences companies can head off any issues before they turn into more serious investigations and other legal challenges. The attorneys and government relations professionals at Buchanan Ingersoll & Rooney have extensive experience across the life sciences sector and can guide your team through all aspects of a clinical trial and beyond, including FDA approval.