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A clinical trial agreement is the legal framework that binds the sponsor, the investigating clinic and the researcher: who funds and manages the trial, who conducts it at the site, how risk is allocated and who answers to the participant if harm occurs. The Law of Georgia on Drugs and Pharmaceutical Activities imposes only a clear statutory minimum on this relationship — the sponsor's insurance obligation before the trial starts and the sanction regime for conducting a trial without a permit — while the remaining terms are left to the parties' agreement. It is precisely in this division, where the statute ends and freedom of contract begins, that the principal legal risk of every research project is hidden.
The sponsor's mandatory obligation: insurance for the duration of the trial
Under Article 5¹ of the law, before a clinical trial begins the sponsor — the person, company, institution or organisation responsible for initiating, managing or funding the trial — must arrange insurance of the trial's risk and liability for the period of the trial's conduct. The insurance must provide for reimbursement or compensation of the treatment costs of a participating person, to the extent those costs were needed for his or her participation in the trial. This requirement is an imperative norm: it cannot be altered or removed by contract. The agreement must therefore be drafted so that the insurance clauses genuinely secure coverage of those costs, make clear who pays the premium, who pursues reimbursement and how the parties deal with the insurer after treatment.
In negotiation practice this is exactly the clause that becomes contested: the investigating site asks that the policy directly cover its own costs related to a participant's treatment, while the sponsor seeks to keep the insurance no broader than the statutory floor. The law does not resolve this dispute — it only sets the lower limit below which an agreement becomes unlawful.
The permit sanction regime and its reflection in the agreement
Conducting a clinical trial of a pharmacological product without a permit is unlawful activity: under Article 37² of the law, conducting a clinical trial without a permit triggers a fine of GEL 4 000, and the same act committed repeatedly — a fine of GEL 8 000. The same sanction regime extends to the manufacture, export or import of a pharmaceutical product subject to special control and to operating without an authorised pharmacy, so the contractual allocation of risk must cover all of these boundaries and not merely the act of conducting the trial.
It is essential that the agreement expressly stipulates who is responsible for obtaining the permit, who assembles and files the permit documentation, within what deadlines, and how the risk of a fine is shared if the sanction results from a given party's neglect. The doubled amount of the repeated fine shows that the state does not forgive non-observance even after a first instance — and that risk is priced in the contract.