In this episode Edye Edens and Darshan Kulkarni tackle a hot-button issue in clinical trials: Should all screen fails be paid for? The discussion was sparked by a recent wave of community questions and contract examples around this very topic.

From the sponsor’s perspective, concerns center around cost control and compliance. Sponsors fear that paying for every screen fail, without oversight, opens the door to unlimited financial exposure—and more dangerously, potential kickback violations. They emphasize the need for fair market value, capped budgets, and data-driven estimates of expected screen failure rates.

From the site’s perspective, there’s agreement: not all screen fails are avoidable, especially when a patient appears eligible but fails due to factors like lab results or genetic markers. Sites aren't asking for a blank check—they're asking for reasonable compensation when they've performed due diligence.

Together, we explore:

• Why defining a “well-intentioned” screen fail matters.
  
  
  
• How scientific and protocol-driven caps can align sponsor and site expectations.
  
  
  
• The role of legal and clinical experts in designing fair, compliant agreements.
  
  
  
• The compliance risks, especially under increased federal scrutiny in healthcare fraud.
  
  
  
• Why sites must talk to their PIs and be empowered to negotiate using data—not just accept arbitrary screen fail caps.
  
  

Ultimately, this episode calls for collaboration, transparency, and data-backed contract terms. By using available science and engaging clinical and legal expertise, sponsors and sites can protect patients, stay compliant, and build long-term trust.

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In this episode, we explore a crucial and timely issue: how the Trump administration’s approach to antitrust enforcement—combined with new state-level regulations—is creating a shifting legal environment for life sciences companies, especially those involved in mergers and acquisitions (M&A).

At the federal level, Assistant Attorney General Gail Slater, in her first major antitrust address, emphasized a renewed focus on strict legal enforcement. Rather than relying on expansive regulatory interpretations, the administration is doubling down on clear statutory authority. This signals a return to more traditional antitrust principles, with heightened scrutiny of M&A transactions that may limit competition or consolidate market power.

But the complexity doesn’t stop there.

On April 4, 2025, Washington State passed SB 5122, becoming the first state to mandate broad pre-merger notifications across all industries. Effective July 27, 2025, this law requires companies meeting specific criteria—such as having a Washington-based headquarters, generating over $25.3 million in state sales, and operating as a healthcare provider or organization—to submit their federal Hart-Scott-Rodino (HSR) filings to the state Attorney General’s Office. Although there’s no filing fee or mandatory waiting period, noncompliance can lead to civil penalties of up to $10,000 per day.

This development sets a precedent, and other states like New York and California are already considering similar requirements. Life sciences companies must now navigate a growing web of both federal and state-level antitrust obligations.

Key Implications for Life Sciences Companies:

1. More aggressive M&A oversight: Federal and state authorities are signaling stricter reviews, particularly in transactions involving healthcare players.
   
   
2. Multi-jurisdictional compliance risks: Companies operating across several states must track and comply with differing notification and filing obligations.
   
   
3. Operational readiness is essential: Internal legal and compliance teams need to coordinate more closely with business development to ensure smooth and compliant deal execution.
   
   

Strategic Recommendations:

• Antitrust Risk Assessments: Evaluate all proposed and ongoing transactions for potential red flags at both state and federal levels.
  
  
  
• Monitor Legislative Trends: Keep track of proposed laws in states like Massachusetts, California, and New York that may soon mirror Washington’s model.
  
  
  
• Strengthen Internal Protocols: Develop systems to ensure accurate, timely submissions of required documentation—both federally and at the state level.
  
  
  
• Engage Counsel Early: Legal teams should be involved at the earliest stages of deal structuring to identify issues before they escalate.
  
  

In an environment where both federal enforcers and state regulators are increasing scrutiny, proactive planning is critical. Companies that adapt quickly to these shifting expectations will be better positioned to manage risk and maintain momentum.

Stay tuned for our next episode as we continue exploring the legal and regulatory trends shaping the pharmaceutical and life sciences industries.

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Transferring medical device ownership during a company sale requires careful planning to ensure compliance and operational continuity. The process begins with accurate documentation of 510(k) clearance and thorough due diligence to avoid regulatory delays. Next, companies must assess ongoing clinical trial responsibilities and contractual obligations tied to the device. Compliance programs should align with both the 2024 DOJ and OIG guidelines to demonstrate regulatory commitment. Conducting a comprehensive gap analysis helps identify compliance risks before the sale. The FDA ownership transfer registration is essential to prevent operational disruptions, along with any necessary state-level reporting. Lastly, a clear agreement outlining contract disputes, pharmacovigilance, transition terms, and quality agreements is crucial to avoid post-sale legal issues.

For expert guidance, Kulkarni Law Firm helps FDA-regulated companies navigate this process smoothly. Contact us to safeguard your business.

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