Drafting Research Funding Agreements: Potential Landmines

Funding R&D through private sector or charitable donations

Innovations in healthcare are often the result of research and development initiatives. Such initiatives cannot be carried out without funding. Many broader public sector organizations that carry on health-related research in Ontario rely heavily on:

  • partnerships with private sector corporations, and
  • charitable donations from philanthropic individuals and organizations,

to fund their research activities.

Risks

If your broader public sector organization receives funds from corporate partners or charitable donors, then you should ensure that the agreements, through which your organization receives such funds, are properly drafted. If not drafted with some forethought, your organization could agree to contractual obligations that conflict with its legislative or regulatory requirements.

For example, a corporate partner that is providing funding to a public hospital for a research initiative may expect the hospital to utilize the funder’s brand of equipment to carry out the research. However, the purchase of equipment by a public hospital in Ontario must be carried out in compliance with the Broader Public Sector Procurement Directive and the Canada Free Trade Agreement. A hospital cannot purchase a significant piece of equipment without abiding by fair and transparent procurement processes, unless the procurement falls within an exemption or circumstance of non-application under applicable procurement regulations.

As us for guidance

If created with care, a funding agreement could be drafted in a manner that allows a purchasing organization to satisfy conditions imposed on the funds by a funder, while still allowing the purchasing organization to be in compliance with its procurement (and other regulatory) obligations.

DDO would be happy to provide advice on options for drafting your organization’s funding agreements. Contact mgleeson@ddohealthlaw.com.

How DDO Can Assist Your Ontario Health Team

In the Second Report from the Premier’s Council on Improving Healthcare and Ending Hallway Medicine, the Premier’s Council offered 10 recommendations on how Ontario might achieve a healthcare system that is modern, sustainable, integrated and centred on the patient. It will be incumbent on Ontario Health Teams (“OHTs”), as the primary providers of front line health care services, to be examples of how the Council’s recommendations can be put into practice.

Our Experience & Expertise

DDO Health Law has the experience and expertise to help OHTs implement many of these recommendations in practical, effective and cost efficient ways.The

The Premier’s Council Recommendations

1. Integration

Recommendations 1-3 are focused on creating a healthcare system that is integrated around patients and across providers. The system should provide (i) more accessible and effective information to patients, families and caregivers and (ii) health services providers that can guide patients through a full continuum of health care services.

DDO can assist OHTs with:

Accessible and Effective Information

  • Obtaining patient consent
  • Disclosure of information to family and caregivers
  • Sharing of information across health care providers
  • How patient information may be made available for research purposes
  • Policies and procedures related to consent and handling of personal health information
  • Template documents for obtaining consent and for protecting and sharing information
  • Training staff on consent and privacy requirements 

Integration of Health Service Providers

  • Collaborative governance mechanisms, e.g. multi-organization steering committees
  • Moving towards long-term integration, e.g., shared committees, boards or full-on merger/amalgamation
  • Contractual arrangements for shared services and collaborative initiatives
  • Sharing of electronic health records between health services providers

2. Innovation

Recommendations 4 and 5 are attempts to modernize the healthcare system to better use current technology and to expand on the pathways by which healthcare has traditionally been provided.

DDO can assist OHTs with:

  • Providing virtual health care in accordance with applicable laws
  • Creating inter-professional care teams
  • Seeking required approvals for the provision of home and community care services
  • Providing home and community care services in accordance with applicable laws (including privacy and consent requirements)
  • Purchase and use of innovative software and equipment for patient care

3. Efficiency and Alignment

Recommendations 6-8 propose means of creating a healthcare system that: (i) strategically collects and uses data in a manner that will improve health outcomes and (ii) coordinates services to allow for increased value for taxpayer dollars.

DDO can assist OHTs with:

  • Sharing data and electronic health records
  • Using data for research and quality improvement purposes
  • Methods of collaborative governance
  • Co-location options
  • Sharing of management and front-line staff
  • Integration of administrative and procurement services
  • Integrating health services through services agreements and inter-professional care teams
  • Electronic referral processes

4. Capacity

Recommendations 9 and 10 consider how short- and long-term capacity issues might be better addressed by maximizing assets and skills that are currently available. The recommendations propose that collaborative leadership and integrated care are keys to maximizing the benefits of available assets.

DDO can assist OHTs with:

  • Shared governance models
  • Inter-professional care models
  • Data sharing
  • The procurement and use of innovative tools that allow for integrated care

For more information, please contact mgleeson@ddohealthlaw.com.

Update on Ontario Health Teams: The Self-Assessment Process is Complete

On July 18, 2019, Ontario’s Minister of Health and Long-Term Care hosted an audio webinar to announce that the Ministry has completed its review of the first phase of self-assessments to become Ontario Health Teams. Before the end of July, the Ministry expects to make public the list of applicants that have been identified as ready to proceed to the Full Application portion of the approval process.

During the webinar, the Ministry announced that 31 applicants will be invited to submit Full Applications. Full Applications are to be submitted for review in October of this year. The Ministry will soon make available online materials that will describe the processes and requirements for completion of a Full Application.

The Ministry hopes to provide final approval for the first wave of Ontario Health Teams before the end of the calendar year.

Procuring through a distributor: Set expectations early!

When procuring goods our clients are sometimes faced with purchasing a good through a third party distributor rather than directly from the manufacturer of the good. An indirect purchase through a distributor can be problematic from a contractual perspective if the distributor is not willing to take full responsibility for all aspects of providing the relevant good (e.g., the delivery, performance, installation, and maintenance of the good, as applicable). Distributors sometimes attempt to avoid providing all of the product representations and warranties that would routinely be provided by a manufacturer of goods. A distributor may be hesitant to provide warranties on a good that it has neither manufactured nor tested itself.

In some such situations, a distributor may seek to share the risks related to the supply of a good by requesting that the purchaser enter into separate agreements with each of the distributor and manufacturer. The agreement with the distributor would identify such things as the products being purchased, pricing, and delivery terms, while the agreement with the manufacturer would address such things as product warranties, specifications, and service or maintenance terms. In our experience one of the primary difficulties of a two contract approach in this type of arrangement is that, unless the risk allocation terms of the two contracts are very carefully drafted and responsibilities are clearly delineated, the result could be that the purchaser is unclear as to which party is responsible for which obligations and risks. If something goes wrong, a purchaser could find itself in a situation in which all parties are pointing fingers at each other because the relevant contracts do not provide sufficient clarity as to which party bears responsibility for a particular type of damage.

The best case scenario from a purchaser’s perspective is for the purchaser to enter into only an agreement with the distributor, rather than agreements with both the distributor and manufacturer. This agreement with the distributor will require the distributor to take full responsibility for all risks related to the good and its supply to the purchaser. If the distributor wants the manufacturer to share responsibility for the good, then the distributor can enter into a separate agreement with the manufacturer to allocate risk between the distributor and manufacturer. This agreement would be separate and apart from the purchase agreement between the purchaser and distributor.

One solution that DDO has used to help avoid debate about what contractual arrangements will be utilized when purchasing through a distributor is to address this issue at the request stage of a procurement. If a purchaser requires, as a condition of participation in its RFP (or other requesting document, as applicable), the distributor to agree that it will be directly accountable to the purchaser for all risks and obligations related to the provision of the required good, then the purchaser can avoid having to negotiate this aspect of the contractual arrangements at a later stage in the procurement process. In this way we find that we can avoid some headaches related to a purchase through a distributor.

Drafting Research Funding Agreements

Innovations in health care are often the result of research and development initiatives. Such initiatives cannot be carried out without funding. Many broader public sector organizations that carry on health-related research in Ontario rely heavily on:

  • partnerships with private sector corporations; and
  • charitable donations from philanthropic individuals and organizations,

to fund their research activities.

If your broader public sector organization receives funds from corporate partners or charitable donors, then you should ensure that the agreements, through which your organization receives such funds, are properly drafted. If not drafted with some forethought, your organization could agree to contractual obligations that conflict with its legislative or regulatory requirements.

For example, a corporate partner that is providing funding to a public hospital for a research initiative may expect that the hospital will utilize the funder’s brand of equipment to carry out the research. However, the purchase of equipment by a public hospital in Ontario must be carried out in compliance with the Broader Public Sector Procurement Directive. A hospital cannot purchase a significant piece of equipment without abiding by fair and transparent procurement processes, unless the procurement falls within an exemption or circumstance of non-application under applicable procurement regulations.

If created with care, a funding agreement could be drafted in a manner that allows a purchasing organization to satisfy conditions imposed on the funds by a funder, while still allowing the purchasing organization to be in compliance with its procurement (and other regulatory) obligations. DDO would be happy to provide advice on options for drafting your organization’s funding agreements.

Ontario Health Teams – Update on Timelines

The Ministry of Health and Long-Term Care has announced updated timelines for the process by which it will identify the first cohort of Ontario Health Teams. The Ministry has extended the time period for its review of submitted self-assessments. Rather than issuing invitations to submit full applications in early June, as previously expected, the Ministry now anticipates beginning to issue such invitations in early July. The deadline for submitting full applications is correspondingly extended until September of this year.

The Ministry update describing the revised timelines for Ontario Health Teams can be found at the following website: https://mailchi.mp/ontario/june-06-update?e=ca30a798b1.