US biotech pursues Cetero for drug development delay costs

US biotech pursues Cetero for drug development delay costs

I came across this news today (obviously related to the outsourcing of a non-clinical project), and it made me wonder which elements in a contract with a clinical CRO that could lead to a similar action by a sponsor dealing with a clinical project.

Of course a typical contract contains many elements that can be breached by a vendor - and which could lead to a litigation process. However, would clauses linked directly to study progress make sense - and be acceptable?

Apart from the obvious fraud or non-compliance related aspects, a clinical project is definitely more complex and it will be much harder to define which specific action or decision may be responsible for a project delay (e.g missed submission deadline to an EC - due to lack of internal focus or poor management by the CRO staff?).

Obviously, sometimes  the way the CRO is managing the project may have significant impact on study progress - can those elements be identified and turned into contract clauses?

And how to calculate the loss of value associated with a delay - can loss of opportunity cost be expected to be calculated in on the indemnification and damages claims?

Would it at all be possible to initiate a litigation process on those grounds - and would it be worth negotiating terms in this direction?