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.

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