Industry funding fundamentals

Industry-sponsored research and federal or foundation-sponsored research typically serve different purposes at different stages of the innovation lifecycle, and come with different sets of expectations for both the researcher and sponsor. Industry-sponsored research generally aims to advance research projects to product development and commercialization and, by doing so, can help move a researcher’s innovations out of the lab, or help bring new drugs and devices developed by industry to market, to benefit society.

It’s important to remember that industry is generally looking to develop a product or service that it can profitably sell to its customers in a relatively short time. Industry is less likely, therefore, to invest in fundamental or basic research that may take a long time to translate into a product or may represent more research or financial risk than the company may be comfortable taking. As a result, industry tends to invest its research dollars in applied or translational research leading to commercialization that allows innovations to advance from the academic laboratory to products that are available to benefit society.

How does industry sponsorship differ from other mechanisms?

Use the table below to explore some of the manifestations of the differences in how and why industry invests in research at Duke:

	Industry sponsored research contracts	Federal or Foundation sponsored research grants
Initiation and Motivation	Industry-initiated project ideas often with the goal of providing evidence for success of a new drug or medical device, and ultimately to generate profit for the company	PI applies for funding for their research projects that further potential academic and medical impact. Success and career progression is measured by the impact of scientific contribution and number of publications researchers produce
Awareness	Direct outreach from industry, or from PI to industry partners	Request for proposal (RFP)
Proposal	Statement of Work or Project Plan, and associated budget specifically designed to reach the industry's goal	Proposal formatting dictated by sponsor and often standardized. Proposal process is typically competitive
Contracting	Bespoke contract around standard University terms	Prescribed by sponsor
Investigator responsibility	PI is responsible for overseeing the conduct of the trial at the site and ensuring that the sponsor protocol is adhered to	PI is responsible for developing and implementing all aspects of the clinical trial, including oversight of sub-sites and regulatory submissions
Project management	Milestone driven, strict timelines, deadlines must be met unless contractually extended, funding can be withheld and contracts can be terminated for non-performance	Flexibility around grant aims, no-cost extensions common if more time is needed
Study Conduct	Protocol design, data analysis and all decisions impacting the study population and schedule of activities come from the sponsor and the PI oversees implementation.	All aspects of protocol design and conduct are managed by the PI and amendments to the protocol are the responsibility of the PI/grant holder.
Results	Typically, the industry sponsor receives contractual rights to use the data and results, often owning the results developed, while Duke acts as primary steward of the raw records and retains rights to academic publication	Owned by University
Publications	While sponsors receive data, Duke typically negotiates for the freedom to publish results. There may be restrictions around timing and company confidential information	No restrictions, some requirements for public access
Intellectual Property	Owned by University but Sponsor may be granted certain rights which encumbers the IP for future licensing to other companies	Owned by University but government has certain rights under the Bayh-Dole Act

It is very important to understand that industry funding is typically milestone-driven, with an initial, agreed-upon portion of the project funding provided up front to begin the research. Future payments are made once defined project goals or timelines are achieved. If these goals or timelines are not achieved, the industry sponsor may decide to end the project so that they can redeploy these funds to more promising research projects. It is therefore extremely important to carefully create a project plan, budget, and resource timeline that ensures project goals and expectations are met.

Industry sponsored research glossary of terms

See below for a list of commonly used terms in industry-sponsored research

Budget Period/Period of Performance

The time frame during which project expenses are incurred.

Contract Research Organization (CRO)

A CRO is a company (vendor) hired by an industry sponsor to take over certain parts of running a clinical trial. The CRO may manage, and monitor the trial, as well as analyze the results.

Key Differences between a CRO and a sponsor:

Ownership: The Sponsor owns the protocol design, and data; the CRO acts as a vendor/partner.
Responsibility: The sponsor has ultimate accountability to regulatory authorities, while the CRO provides operational services.
Function: Sponsors define the research Strategy; CROs execute the tactics.

Fair Market Value (FMV)

The price that a willing buyer (industry sponsor/CRO) and a willing seller (research site/institution) would agree upon in an arm's length transaction, where both parties are knowledgeable, rational, and under no compulsion to transact. In clinical trials, FMV ensures that compensation for services, such as investigator fees, coordinator salaries, and patient recruitment is reasonable, documented, and not used to induce referrals.

If FMV is not met, payments to researchers might be construed as bribes or illegal inducements, leading to potential investigations.

Investigational Device Exemption (IDE)

An IDE is a request from an investigator for an authorization from the FDA to use an investigational device in a clinical study to collect safety and effectiveness data required to support a premarket approval application or a premarket notification submission to the FDA. IDEs are essentially the same as INDs – they require approval from the FDA prior to use, the only exception is it’s a device being reviewed as opposed to a drug.

Investigational New Drug (IND)

An IND is a request from an investigator for an authorization from the FDA to administer an investigational drug or biologic to humans. The FDA considers an investigational drug to be any substance which is not currently approved for marketing by the FDA or is approved but the study is to expand its use to a new indication, route of administration, or dose that significantly changes the risk profile. After an investigator applies for an IND, the clinical trial cannot start for another 30 days, ensuring the FDA has ample time to review the IND for the safety and wellbeing of research participants.

Key Opinion Leader (KOL)

A highly respected expert (typically a physician, researcher, or academic clinician) whose specialized knowledge, research contributions, and professional standing give them significant influence over how their peers perceive, adopt, and utilize new medical therapies.

Industry sponsors (e.g., drug companies) collaborate with KOLs because their endorsement and insights are essential for navigating the complex journey from research and development (R&D) to clinical adoption, regulatory approval, and marketing.

Master Agreement (or Master Research/Clinical Trial Agreement)

An overarching legal contract between Duke and an industry sponsor that sets the baseline terms and conditions for research. It eliminates the need to renegotiate core legal terms for every new study, allowing future projects to be initiated through a simple project-specific document.

Medical Monitor (MM)

A licensed physician or equivalent professional (e.g., PharmD) designated by the sponsor to provide scientific and medical oversight of a clinical trial. Acting as a "linchpin" for patient safety and trial integrity, the MM serves as an independent advisor, bridging the gap between clinical operations teams, regulatory bodies, and site investigators.

Suspected Unexpected Serious Adverse Reaction (SUSAR)

An adverse event in a clinical trial that is serious (life-threatening, results in death, or requires hospitalization), unexpected (not listed in the investigator's brochure), and likely caused by the study drug.

It is required that the sponsor distribute any SUSAR information to all clinical trial sites conducting an investigation with the study drug, even if the SAE happens in a different trial using the same drug.

Types of agreements used in industry sponsored research

Below is a list of the types of agreements that may be used between Duke and industry partners

Clinical Trial Agreement (CTA)

A legally binding contract between an industry sponsor and Duke, defining the obligations, financial terms, risks, and responsibilities for conducting a clinical study.

Can also be referred to as:

Clinical Trial Research Agreement (CTRA)

Clinical Research Agreement (CRA)

Clinical Study Agreement (CSA)

For more information see: Industry Clinical Trial Agreement (CTA) process summary

Collaboration Agreements

Between Duke and outside researchers allow scientists with common interests to pursue common research objectives without exchanging funding.

Confidential Disclosure Agreement (CDA)/Non Disclosure Agreement (NDA)

A Confidential Disclosure Agreement (CDA), also referred to as a Non-Disclosure Agreement (NDA), is an agreement between two or more parties that outlines the terms under which the parties will exchange information they consider confidential for a specified industry supported research collaboration, including, but not limited to the confidentiality period, and the disclosure period.

For more information see: Confidential Disclosure Agreement (CDA) guidance

Data Use Agreements (DUAs)

Allow Duke researchers to receive or share data sets with researchers at companies for research purposes.

Equipment Loan Agreements

Provide the terms for companies to lend equipment to Duke labs for research purposes.

Industry Sponsored Research Agreements (SRAs or RAs)

Used when companies fund research at Duke.

For more information see: Basic science, non-clinical, and translational Research Agreement guidance

Material Transfer Agreements (MTAs)

(Including Human Material Transfer Agreements) govern the transfer of incoming and outgoing materials between Duke and other entities.

For more information see: Material Transfer Agreement (MTA) guidance

What is the difference between Big Pharma and Small Pharma?

'Big Pharma' refers to large, established, widely-recognized companies such as Eli Lilly or AstraZeneca. 'Small Pharma' is predominantly made up of emerging biotechs and startups. Small firms drive the majority of early-stage innovation and first-in-class discoveries, while big pharma provides the capital, global infrastructure, and expertise required to navigate complex phase 3 trials and regulatory approval. Some important differences to take into consideration when thinking about research project funding are as follows:

Small Pharma is an important source of innovation. These companies are generally more agile, allowing fast movement and decision-making. Small pharma may be willing to take risks on novel, unproven technologies with focus often on specific platforms or programs. They operate on a high-pressure "binary outcome" model where success determines survival. Researchers should consider the implications of sponsorship from a less financially stable source.

Big pharma has vast resources for large-scale, international trials. Their goals may be around refining and improving existing compound development, navigating later-stage trials, or funding complex, multi-site, international trials.

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