Life Sciences Dispute Review Boards
Disputes are common in life sciences collaborations, but most can be resolved early — or avoided — with the right structure in place.
Collaborations in the pharmaceutical, biologics, medical device, OTC drug, dietary supplement and food spaces are common. So are disputes that often tear apart global supply agreements, intensive joint research and development ventures, or patent licensing arrangements.
Unfortunately, dispute escalation clauses in contracts rarely work out well because there is always a vested interest or impractical escalation procedures. And arbitration or litigation as a recourse means hiring lawyers, spending literally millions of dollars, and having two parties entrenched in warfare.
There is a better way. By establishing an expert board of one to three members through a two-page clause in the relevant contract, and by keeping those board members up to date on the business twice a year, disputes can be resolved — or, in some cases, avoided — at a very early stage, without the need to hire outside counsel or declare war on one another.
Most importantly, the millions or hundreds of millions of dollars invested in a commercial relationship don’t have to be put on hold , or in many cases destroyed , when approval deadlines /milestones are missed, when safety signals go unreported and doom a research project, or where GMP issues in raw material supply can be ameliorated early. We have sadly seen many collaborations based on marketing, research, supply, royalties, and CRO/CMO relationships cut short because of the absence of a good early dispute resolution mechanism.
The International Center for Dispute Resolution of the American Arbitration Association has launched a new initiative intended to make deals last and save millions in fees. ICDR offers model contract clauses and forms for the retention of a Life Sciences Dispute Review Board, and manages the process.
Contracting parties agree to appoint the board, either one or three members drawn from regulatory, senior executive, and legal experts. ICDR has a list of recommended people if needed.
Companies pay 5 figures a year in fees to these Dispute Board members and keep them up to date twice a year in virtual meetings. If a dispute arises, there is an additional flat fee (no hourly bills). Without the need to hire outside counsel, the expertise owners at each company prepare a short submission to the Board and the Board comes back with a written recommendation within 30 days (or more quickly in an emergency).
Of course, the parties have a right to appeal to arbitration if they disagree, but in most cases, based upon experience in other industries, the parties will move forward with their marketing, manufacturing, applications, etc.
We are happy to offer expertise in this area based upon many disputes across the life sciences industry. And our mediation certification add to the likelihood of a desirable outcome.
To learn more, please contact us and also visit the ICDR website.