In Short
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Pharma partnerships often require sharing highly sensitive information before commercial terms are agreed.
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NDAs help control how confidential information is used, but poor drafting can leave gaps in protection.
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NDAs should be supported by practical security measures to reduce the risk of misuse or leaks.
Tips for Businesses
Before sharing any sensitive information, ensure your NDA clearly defines what is confidential, limits use to a specific purpose, and sets out strong remedies for breach. Restrict access internally on a need-to-know basis, use secure systems to share information, and keep records of disclosures. Review NDAs carefully where data protection or evolving R&D information is involved.
Summary
This article explains the role of non-disclosure agreements in managing confidentiality risks during early-stage pharma partnerships, for pharmaceutical and life sciences businesses in the United Kingdom. Prepared by LegalVision, a commercial law firm specialising in advising clients on commercial contracts and risk management in the pharma sector, it outlines key NDA considerations and practical steps to protect sensitive information.
Commercial pharma partnerships and projects between pharmaceutical companies usually require the businesses involved to share highly sensitive information at an early stage. This is often before agreeing on the commercial structure of their partnership or collaborative project. As this information is so valuable, confidentiality risks must be managed carefully from the outset and contractually protected.
Non-disclosure agreements (NDAs) are commonly used to manage these risks in the pharmaceutical industry and wider life sciences industry. However, NDAs must be carefully reviewed to ensure they are fit for purpose and sufficiently protective to protect pharma businesses.
This article explores NDAs for risk prevention at the early stages of commercial collaboration discussions in the pharma sector. For example, for discussions around proposed research, development or other joint projects.
The Role of NDAs in Pharma Partnerships
Many pharma partnerships can be complex and technical, and often begin with crucial initial discussions. At this stage, the disclosure of various confidential and sensitive information is often required. An NDA allows those discussions to take place while helping to limit the risk of misuse of confidential information.
Simply put, an NDA is a commercial document that sets out the rules governing how a receiving party may use confidential information. Different types of information may be shared with high sensitivity in pharma partnerships and collaborations, including:
- research and development data;
- know-how;
- significant trade secrets; and
- manufacturing processes.
Key Considerations for an NDA
A pharma partnership NDA should clearly define what constitutes confidential information and set out the rules for handling it in practice. This can include:
- rules around how the information is stored;
- who can access it; and
- which parties are allowed to see it.
Many NDAs also limit use of the information to a specific purpose, such as assessing a potential collaboration.
The key purpose is to safeguard the confidential information as much as possible and offer contractual remedies if a party breaches its obligations.
The NDA will often set out important key remedies. For instance, if a party breaches an NDA, the other party may seek damages. In some cases, they may also seek injunctive relief, such as a court order requiring the other party to stop leaking their confidential information.
Once confidential information is disclosed, the damage can be difficult to reverse. This is particularly true for business-critical information, such as:
- trade secrets;
- proprietary research; and
- manufacturing information.
Being Aware of Risks and Problems in NDAs
Poorly drafted NDAs can increase the chance of legal risks. For example, risks can arise when NDAs use vague or overly narrow definitions of confidential information. If this is the case, the NDA may not offer enough protection. This can be a problem in progressive R&D discussions, e.g. if information shared evolves as talks progress.
Confidential data shared in a pharma partnership could include personal data, such as during clinical trials. If data protection issues are not addressed in a compliant manner in the NDA with appropriate clauses, this could result in breaches of data protection law and misuse of personal information about individuals.
Practical Ways to Protect Information in Pharma Partnerships
NDAs alone may not offer enough protection in high-risk fields like pharma. As such, additional practical measures are often necessary when approaching partnership discussions.
Access to confidential information should be limited to individuals who genuinely need it, and an up-to-date record should be kept of who accessed the information, when, and why.
Appropriate security measures should also be used when sharing information, such as:
- secure storage systems;
- encryption; and
- controlled communication channels.
Employees who have access to sensitive information for the purposes of third-party discussions should receive training. This can help reduce the risk of accidental leaks or inappropriate disclosure of confidential information.
Taking Legal Advice on Legal Risk Prevention
In pharma partnerships, sharing information with third parties can pose a higher risk for a business due to the nature of the information involved. Early discussions might often require you to share sensitive information that is central to your brand value and competitive position in the market. This could include matters such as:
- clinical trial data;
- manufacturing plans or formulation know-how;
- regulatory strategies; or
- your product pipeline information.
If this information is misused or shared more widely than intended, then the damage can be significant and often cannot be undone. It may:
- affect your ability to protect your rights and intellectual property;
- weaken your strategy; or
- even undermine future investment.
Taking legal advice can help ensure your NDA is as robust as possible and reflects the risk you face in practice. A strong NDA can clearly control how different types of pharma information can be used, but also include stringent remedies to deter third parties from misusing your information.
Involving a lawyer to help you draft and negotiate your NDA can help reduce the risk of disputes and share information with greater comfort.
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Key Takeaways
Pharma partnerships commonly entail early disclosure of valuable and often highly sensitive information. NDAs help manage this risk, but they require careful review and drafting.
Clear definitions of confidential information and confidentiality obligations can offer clarity and help manage risk. However, practical confidentiality measures should support your contractual protections.
LegalVision provides ongoing legal support for pharma businesses through its fixed-fee legal membership. Our lawyers help businesses in the recruitment industry manage contracts, employment law, disputes, intellectual property, and more. Members receive unlimited access to specialist lawyers for a fixed monthly fee. To learn more, call 0808 196 8584 or visit our membership page.
Frequently Asked Questions
Many pharma partnerships may involve early disclosure of sensitive and confidential information. In those situations, an NDA is typical and vital. Without an NDA, control over confidential information may be heavily reduced, and fewer remedies may be available if misuse occurs.
An NDA provides important protection, but it cannot remove all risk. Once confidential information is shared without permission (even with an NDA in place), your business could face significant risks. Practical steps such as limiting disclosure on a need-to-know basis and controlling what information you share strictly are essential, alongside any NDA.
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