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Negotiating cell, tissue, and gene therapy agreements with health care organizations

This is an article in our “Life Sciences Transactional Insights” series, which aims to provide key practical takeaways for our transactional colleagues by anticipating the needs of their regulatory, intellectual property, and business stakeholders.

31 July 2024

Legal challenges for innovative cell, tissue, and gene therapies (CTGTs) are mainly seen in the still evolving regulatory environment. However, it is also crucial for the manufacture and supply of CTGTs to have agreements in place with all apheresis and treatment centers (ATCs) in the respective launch markets. CTGT companies should be aware that the negotiating and execution of such agreements with (often public) hospitals and other health care organizations (HCOs) can be both challenging and time-consuming. That process should thus be thoroughly planned and initiated long before obtaining marketing authorization for a CTGT product. See below for some key considerations.

For cell, tissue, and gene therapy manufacturers negotiating with health care organizations, the following key terms are often controversial:

Ownership of patient cells collected by the institution (which, depending on the local laws applicable may also need to be aligned with a respective consent by the patient waiving ownership rights in their cells);
Loss of cells and/or product;
Intellectual property, in particular with respect to ownership of product-related inventions made by institution’s employees (although rather unlikely);
Liability, indemnification and insurance, specifically with regard to the demarcation of product liability (to be borne by the pharmaceutical company anyway) and medical malpractice. This is particularly challenging for CTGTs where the hospital is closely involved in the manufacture of the product and its, often very specific, preparation and handling.

Public hospitals tend to not be very flexible in terms of accepting contractual clauses to their disadvantage; in addition, they often have rather long review cycles. Therefore, it is important to develop very clear and balanced template agreements in order to not delay negotiations. In European countries an EU-wide template agreement can be the starting point, but it needs to be localized for key jurisdictions in order to ensure a smooth negotiation process with local ATCs. Also, a negotiation hand book providing for fallback positions in respect to the above and further topics can facilitate the swifter negotiating.

Next steps

Please contact the authors or the Hogan Lovells attorneys with whom you regularly work to discuss your specific needs with respect to agreement considerations in bringing your cell, tissue, and gene therapy products to market.

This is an article in our “Life Sciences Transactional Insights” series, which aims to provide key practical takeaways for our transactional colleagues by anticipating the needs of their regulatory, intellectual property, and business stakeholders. Our dedicated team of life sciences and health care licensing and commercial transactions lawyers understand the challenges and opportunities that strategic alliances and other partnering relationships present. We draw on the depth of our life sciences practice and work seamlessly with our regulatory experts to provide unparalleled transactional support. Ensure you are subscribed to Hogan Lovells Engage to receive our insights.

Authored by Benjamin Goehl, and Joerg Schickert.