The Hidden Implications of Clinical Trial Disclosure Noncompliance

By Thomas Wicks

Over the past decade, industry sponsors of clinical trials have expanded their commitments to data transparency, and overall compliance with trial disclosure regulations is markedly better. However, most of these improvements have been made by the larger companies. Many smaller biopharmaceutical organizations are reluctant to share data more broadly and remain significantly noncompliant with clinical trial results regulations.

With increasing attention to clinical data transparency practices and the growing likelihood of negative consequences for nondisclosure, industry sponsors of all sizes should ensure full compliance with regulations and consider more generous transparency policies. Those consequences are wide-ranging — not just possible financial penalties but also, for example, negative evaluations by potential investors and partners.

While industry sponsors with 100 or more trials listed on ClinicalTrials.gov average more than 98% of their trials compliant with current results disclosure regulations in the US, those with fewer than 100 studies on average fall below 65% compliance. (See chart below.)

The real costs of inadequate trial disclosure are often underestimated by those who consider only the lack of enforcement actions to date. Although financial penalties have yet to be levied, the potential fines are significant. Additionally, focusing only on fines fails to recognize the other effects of inadequate transparency.

One data source for analysts covering the biopharmaceutical industry is the public registries, especially ClinicalTrials.gov. This is by far the largest registry, with more than 500,000 trials listed as of July 2024.

The regulatory due diligence assessment is a key element of a merger or acquisition in the life sciences sector. While the focus may be on marketing authorization and clinical documentation, applications, quality management, and disclosure, noncompliance will raise significant concerns and derail or delay a transaction. Publicly available compliance websites such as the FDAAA TrialsTracker, the EU TrialsTracker, or the Good Pharma Scorecard can point to potential issues that may raise significant concerns during due diligence.

Regulatory Inspections

In the US, the Food and Drug Administration completed pilot inspections and issued final guidance on penalties relating to disclosure noncompliance. A sponsor faces potential financial penalties of over $14,000 per noncompliant trial for every day the issue remains unresolved (a figure adjusted annually for inflation since the original $10,000 set in the 2007 FDA Amendments Act). In addition, notification of noncompliance will be made public on ClinicalTrials.gov.

Beyond Financial Penalties: The Broader Impact of Noncompliance in the EU

Financial penalties aren't the only concern for sponsors operating in the EU. With the implementation of the EU Clinical Trial Regulation (EU CTR) in 2023, which emphasizes transparency, member states now have the authority to establish a broader range of sanctions for noncompliance. These could include limitations on a sponsor's ability to conduct future trials in the EU. So far, 14 of the 30 EU/EEA members have announced their enforcement plans. For example, Belgium may assess penalties of up to 500,000 Euros and up to three years in prison for repeated violations of the EU CTR. In addition to these penalties, sponsors may suffer significant reputational damage from noncompliance during inspections, which could deter potential partners and investors in the European market.

Specific Focus: Noncompliance with EU CTR Article 25

While the potential sanctions for noncompliance with the EU CTR continue to evolve, Article 25 presents a specific consequence for sponsors. This article mandates the registration of clinical trials in a public registry compliant with the World Health Organization (WHO) before participant recruitment begins. Failure to comply with this requirement could lead to the data from the trial being excluded from future clinical trial applications (CTAs) within the EU/EEA.

This exclusion can significantly impact a drug's path to market in Europe. Sponsors would be forced to conduct additional trials or find alternate data sources to satisfy regulatory requirements, causing delays and potentially incurring substantial additional costs.

With increasing scrutiny from health authorities, transparency advocates, and industry analysts — not to mention the negative impact nondisclosure has on brand reputation — sponsors are well advised to assess their current level of compliance with regulations in every country where they have conducted trials. To ensure inspection-ready disclosure, organizations should review their transparency policy and update related standard operating procedures and processes for managing clinical trial disclosure.

¹ A trial meeting the requirements of the FDAAA final rule on clinical trial registration is called an Applicable Clinical Trial or ACT.