MAPGuideⓇ
Equitable Access Toolkit
How Do Reporting Obligations and Audit Rights Support the Achievement of Equitable Access Objectives?
Provisions establishing the type, structure, and frequency of reporting that must be provided by developers are an important tool for funders and PDPs in evaluating the progress of a project in achieving its objectives. Failures by a developer to produce timely reporting, meet deliverable and milestone deadlines, and/or manage the project budget can be indicators of risk to a funder’s investment. Reporting requirements should be supported by audit rights that enable a funder or PDP to review underlying records related to the developer’s work on a project.
1. Reporting requirements
There are several types of information that funders and PDPs may need their partners to report during the course of an agreement. The required frequency of reports can depend on factors such as:
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- Product development stage: projects reaching critical milestones such as first doses in clinical trials, regulatory submissions, or commencement of commercialization may require more frequent reporting so that a funder or PDP receives timely information about outcomes.
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- Urgency of need: products intended for response to an ongoing public health emergency may require more frequent reporting to provide input to global response mechanisms.
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- Investment risk level: more frequent reporting can be considered good governance practice for projects perceived to have a higher risk, for example due to an inexperienced partner or the scale of the investment.
The timing and frequency of reporting requirements need to be balanced against a funder or PDP’s resource availability for timely review and follow-up of the information received. Funders and PDPs may also need to ensure that they have the input needed to meet their own reporting obligations both for internal management purposes and for external stakeholders.
As explained in further detail below, common examples of reporting topics include intellectual property, regulatory activities, project progress and results, financial information, equitable access commitments, and general compliance confirmations.
a. Intellectual Property: Reports providing information about the generation or acquisition of new intellectual property related to the project are a tool for funders to evaluate the value generated by a project as well as identify data or technology that will need to be transferred if there is a need to exercise step-in or alternative manufacturer provisions. This type of report can be required on an ad hoc basis when there is a relevant event, rather than according to a predetermined schedule.
Examples from the MAPGuide
The [Developer] will: (a) notify the [Joint Monitoring and Advisory Group] as Project IP is created, discovered or made; any applications for any rights to Project IP are submitted or are otherwise prosecuted; any application regarding the registration of any Project IP is granted, including the granting of any patent or trademark, as part of its regular [Integrated Product Development Plan] reports; […]
Source: taken from a development funding agreement between CEPI (Funder) and Valneva (Developer) for manufacturing and late-stage clinical development of a Chikungunya vaccine. Read in context.
In addition to the foregoing reporting requirements, [Developer] shall promptly disclose to [Funder] in writing (i) Project Intellectual Property; (ii) Background Intellectual Property; and (iii) all data, information and other documentation developed, acquired, controlled or otherwise obtained by [Developer], rights to which are specifically excluded from the definition of Background Information under Subsection [x] to the extent such data, information and other documentation is used or included by [Developer] in the Project Plan.
Source: taken from a development funding & collaboration agreement between PATH (Funder) and Aridis (Developer) for the formulation development of a rotavirus vaccine. Read in context.
During the term of this Agreement and for 5 years after, [Developer] will submit upon request annual intellectual property reports related to the Funded Developments, Background Technology, and any related agreements using the [Funder’s] templates or forms, which the [Funder] may modify from time to time.
Source: taken from a grant agreement between the Bill & Melinda Gates Foundation (Funder) and Arsanis (Developer) for the preclinical development of a monoclonal antibody treatment for respiratory syncytial virus infections. Read in context.
b. Regulatory: Information provided by developers about their communications with regulatory authorities can enable funders to confirm that certain project milestones are being met, and to assess likely outcomes of regulatory submissions that will have an impact on the overall success of the project.
Examples from the MAPGuide
[Developer] shall consult regularly with [Funder] regarding regulatory strategy for a Project Vaccine and shall provide advance copies of all regulatory submissions for review and comment by [Funder] no later than [***] prior to their contemplated submission to a regulatory authority. If a final version is not available by [***] prior to submission, then a mature draft version can be submitted to [Funder] for review at that time. Additionally, [Developer] shall put copies of the following on a confidential electronic archiving service designated by [Funder]:
(a) all submissions to regulatory authorities and regulatory filings in respect of a Project Vaccine together with all data included or referenced therein (other than ministerial submissions that do not involve safety or efficacy issues); and
(b) material documents and information exchanged between any regulatory authority and the [Developer] relating to a Project Vaccine.
Source: taken from a development funding agreement between CEPI (Funder) and Novavax (Developer) for a COVID-19 vaccine. Read in context.
c. Project progress and results: Project progress reports can include items such as commentary on progress towards the milestones and deliverables set out in a product development plan as well as explanations of actual or foreseen delays or challenges to completing the project activities. This information can provide early indications to a funder of potential risks to the achievement of the intended outcome of the project. Funders often expect progress reports to be provided in a standardized format in order to support onward reporting obligations and consistent assessment across a portfolio of projects.
Examples from the MAPGuide
Developer] shall submit to [Funder] bi-annual written progress and financial reports. Such reports shall also summarize the financial expenditures incurred by [Developer] in implementing the Project Plan. Upon completion of Phase I of the Project Plan, [Developer] shall promptly submit a written report to [Funder] summarizing [Developer’s] progress and results in implementing the Plan. In addition, [Developer] shall submit to [Funder] a final written progress and financial report, with substantiating documentation, within three (3) months following the completion of the Plan or termination of this Agreement if termination occurs prior to completion of the Plan. The form of financial report is as set forth in Appendix E.
Source: taken from a development funding & collaboration agreement between PATH (Funder) and Aridis (Developer) for the formulation development of a rotavirus vaccine. Read in context.
[Developer] will submit reports according to the Reporting & Payment Schedule using the [Funder’s] templates or forms, which the [Funder] will make available to [Developer] and which may be modified from time to time. For a progress or final report to be considered satisfactory, it must demonstrate meaningful progress against the targets or milestones for that investment period. If meaningful progress has not been made, the report should explain why not and what adjustments [Developer] are making to get back on track. Please notify the [Funder’s] Primary Contact if [Developer] need to add or modify any targets or milestones. The [Funder] must approve any such changes in writing. [Developer] agree to submit other reports the [Funder] may reasonably request.
Source: taken from a grant agreement between the Bill & Melinda Gates Foundation (Funder) and Arsanis (Developer) for the preclinical development of a monoclonal antibody treatment for respiratory syncytial virus infections. Read in context.
[Developer] shall complete and submit a detailed report on the work done and outcomes of the Programme (“End of Award Report”) in the prescribed form to the [Funder] such report to be presented to the [Funder] within [**] months of completion of the Programme (or other such date as may be agreed with the [Funder]. The [Funder] will evaluate the End of Award Report and will notify the [Developer] within [**] Business Days of receipt whether the report is acceptable to the [Funder]. If the End of Award Report is not acceptable to the [Funder], it shall notify the [Developer] of its reasons at the same time, which may include that the report is incomplete or insufficiently detailed and the [Funder] shall have the right to withhold further funding until the [Funder] receives an End of Award Report which the [Funder] deems to be acceptable.
Source: taken from a research funding agreement between the Wellcome Trust (Funder) and PTC Therapeutics (Developer) under the Trust’s Seeding Drug Discovery Strategic Award Programme for the discovery and development of a novel glioblastoma treatment. Read in context.
During the Pandemic Period, Awardee shall:
- Provide the JMAG with a regularly updated quarterly statement of its actual capacity and a forecast of its planned capacity for the following four (4) calendar quarters for the manufacturing of Project Vaccine under this Agreement and otherwise;
- Provide the JMAG with advance notice in writing of all manufacturing runs for the Project Vaccine in accordance with agreed forecasting;
- Discuss in good faith with the JMAG how to achieve its requirements for doses of Project Vaccine, including any potential increase in Awardee’s manufacturing capacity.
Source: taken from an outbreak response agreement between CEPI (Funder) and Variation Biotechnologies Inc (Developer) for the development of COVID-19 vaccine candidates. Read in context.
[Developer] shall provide the[Funder] Chief of Research and Development with a status update of clinical studies that are actively enrolling patients to include by study site: cumulative enrollment; new enrollments; screen failures; patients dropped from study; AE and SAEs; activation or inactivation of study sites; investigator appointments or changes; and status of IRB/IEC review/approval/renewal. Status update shall also include a report of all changes in the status of any ongoing clinical study protocols (see Attachment [x]). [Developer] shall provide such status updates on a monthly basis.
Source: taken from the template CARB-X (Funder) cost-reimbursement agreement with subrecipients (XDeveloper) for the early stage development of antibiotics, vaccines, and rapid diagnostics against bacterial threats. Read in context.
An example of a required progress reporting format from CEPI can be found in Schedule 9 of this development funding agreement for the development of CureVac’s mRNA platform for the rapid manufacturing of vaccines against infectious diseases.
The Bill & Melinda Gates Foundation publishes templates for progress narrative reports and final reports.
d. Financial information: Periodic reports of actual expenditure against budgeted costs for the project for grant agreements can provide an additional indicator of the developer’s actual progress on a project compared to the project plan.These reports can also enable funders to assess whether the grant funding is likely to be sufficient for completion of the project. Partnering agreements that do not structure funding payments on a milestone basis sometimes link payments to the provision of financial reports with information about expenditure to date.
In addition to financial information related directly to the activities under a partnering agreement, annual financial statements and audit reports for an organization as a whole can provide funders with useful insights as to the overall financial stability of their partner. Substantial changes to a partner’s financial position can indicate increased risk levels for a funder’s investment.
Examples from the MAPGuide
[Developer] shall provide reports of its expenditure under the Budget with supporting documentation and using a template provided by [Funder] (“Financial Reports”) within thirty (30) Business Days of the end of each calendar quarter during the term of the Project or such other date(s) as may be identified in the Budget. [Developer] shall submit a final Financial Report for a Work Package within sixty (60) days after the completion of any Work Package.
Source: taken from an outbreak response agreement between CEPI (Funder) and Variation Biotechnologies Inc. (Developer) for the development of COVID-19 vaccine candidates. Read in context.
Following the annual audit of [Developer] by its external auditors, [Developer] shall provide the [Funder] with the audited financials which shall indicate whether the external auditors have signed their opinion on the annual accounts of [Developer] without qualification. [Developer] shall further confirm in writing to the [Funder] that the management letter from the auditors raises no matters that did or could significantly affect the administration of grants awarded by the [Funder]. If the auditors have raised any such matters in their management letter, [Funder] shall, on request from the [Funder], provide the [Funder] with relevant extracts from the letter.
Source: taken from a research funding agreement between the Wellcome Trust (Funder) and PTC Therapeutics (Developer) under the Trust’s Seeding Drug Discovery Strategic Award Programme for the discovery and development of a novel glioblastoma treatment. Read in context.
In addition to reports required to be delivered to the [Funder] under the Investment Documents, the [Developer] will furnish, or cause to be furnished, to the [Funder] the following reports and certifications: […]
(iv) full and complete financial reports of the type ordinarily required by commercial investors under similar circumstances to the extent required pursuant to Treasury Regulation 53.4945-5(b)(4).
Source: taken from a strategic relationship agreement between the Bill & Melinda Gates Foundation (funder) and Arsanis (developer) in connection with an $8 million investment by the Foundation to support a Staphylococcus aureus antibody development program. Read in context.
An example of a required progress reporting format from CEPI can be found in Schedule 8 of this development funding agreement for the development of CureVac’s mRNA platform for the rapid manufacturing of vaccines against infectious diseases.
The Bill & Melinda Gates Foundation publishes a template financial report.
e. Equitable access commitments: Specific reporting requirements related to the achievement of equitable access objectives, in addition to general project progress reports, can assist funders with monitoring and onward reporting of the status of their portfolio in relation to those objectives. These reporting requirements can also serve as a reminder that the fulfillment of equitable access commitments is central to the success of the project.
Examples from the MAPGuide
[Developer] shall provide the following to [Funder] to the extent not already included in the reports and information provided by the Partner to [Funder]:
(i) progress report on the scale-up of the Platform for Manufacturing and a good faith estimate of the cost of the scale-up where such scale-up is necessary;
(ii) progress report on the scale-up of Manufacturing of Project Vaccine for use in the Field to fulfill any requirements of an Approved Regulatory Authority for the grant of marketing approval for such Project Vaccine for use in the Field in the Affected Territory;
(iii) progress reports on submissions to Regulatory Authorities for a Platform Confirmation or plans to do the same;
(iv) a good faith estimate of the number of doses of each Project Vaccine for use in the Field the [Developer] and/or Trusted Manufacturers are capable of producing, using the Platform and dates by when Partner estimates such volume will be achieved;
(v) a good faith estimate of Cost of Goods of doses of each Project Vaccine for use in the Field for both the investigational stockpile and any additional doses; and
(vi) the documents and information any estimates are based on together with any information on any factors that may impact the cost of each Project Vaccine use in the Field.
Source: taken from a development funding agreement between CEPI (funder) and CureVac (developer) for the development of CureVac’s mRNA platform for the rapid manufacturing of vaccines against infectious diseases. Read in context.
In addition to reports required to be delivered to the [Funder] under the Investment Documents, the [Developer] will furnish, or cause to be furnished, to the [Funder] the following reports and certifications:
(i) within [**] days after the end of each of the [Developer’s] fiscal years during which the [Funder] owns any securities in the [Developer], a certificate from the [Developer] signed by an officer of the [Developer] and substantially in the form attached to this Letter Agreement as Appendix 3, certifying that the requirements of the [Funder] Investment set forth in this Letter Agreement were met during the immediately preceding fiscal year, describing the use of the proceeds of the [Funder] Investment and evaluating the [Developer’s] progress toward achieving the Global Access Commitments; […]
(iii) any other information respecting the operations, activities and financial condition of the [Developer] as the [Funder] may from time to time reasonably request to discharge any expenditure responsibility, within the meaning of Sections 4945(d)(4) and 4945(h) of the Code, of the Foundation with respect to the [Funder] Investment, and to otherwise monitor the charitable benefits intended to be served by the [Funder] Investment. The [Funder] will reimburse the [Developer] for any reasonable third-party expenses incurred by the [Developer] in order to prepare any information the [Developer] is required to prepare solely as a result of this Section 6(a)(iii);
Source: taken from a strategic relationship agreement between the Bill & Melinda Gates Foundation (funder) and Arsanis (developer) in connection with an $8 million investment by the Foundation to support a Staphylococcus aureus antibody development program. Read in context.
f. General compliance confirmations: Periodic confirmations that a partner is in compliance with the general conditions and warranties of a partnering agreement can be used as part of corporate governance processes to ensure that funding is used in accordance with the laws and regulations applicable to the project.
Examples from the MAPGuide
You will conduct, control, manage, and monitor the Project in compliance with all applicable ethical, legal, regulatory, and safety requirements, including applicable international, national, state, local, institutional, and school district or school network standards (“Requirements”). You will obtain and maintain all necessary approvals, consents, and reviews before conducting the applicable activity. As a part of Your annual progress report to the Foundation, You must report whether the Project activities were conducted in compliance with all Requirements.
Source: taken from a grant agreement between the Bill & Melinda Gates Foundation (funder) and Arsanis (developer) for the preclinical development of a monoclonal antibody treatment for respiratory syncytial virus infections. Read in context.
2. Audit Rights
Partnering agreements often include provisions for both financial and non-financial audit rights. Financial audits involve the review of accounting systems and data related to the project budget, actual expenditure, calculation of the cost of goods for the funded product, and/or sales of the funded product. Non-financial audits may involve the review of scientific, manufacturing, and other project data, as well as physical inspections of facilities related to the conduct of research, development, and manufacturing activities.
Audit rights enable funders to validate the accuracy of reports that they receive, obtain assurance that their investment is being used in accordance with expectations, and assess whether a project is on track to meet its objectives. The use of audit rights need not be limited to cases of suspected wrongdoing – they can be exercised as part of a funder or PDP’s business as usual project and financial governance activities.
Examples from the MAPGuide
During the term and for a period of [***] after expiration or termination of this Agreement, [Funder], or its designee (which shall be a internationally recognized certified public accounting firm, not engaged on a contingent basis), and at [Funder’s] reasonable cost, shall have on-site access to inspect [Developer’s] Project- related financial records once annually upon at least [***] advance notice. Such inspections shall be conducted during normal operating hours in a manner to minimize disruption to [Developer’s] business. For clarity, access to such records also shall be provided to records related to Cost of Goods as described in Clause [x].
During the term and for a period of [***] after expiration or termination of this Agreement, if requested by [Funder], and at [Funder’s] reasonable cost, [***] notice, [Developer’s] external auditors shall conduct a Project audit in accordance with ISA800 and/or ISA805 and like standards and provide [Funder] with audited statements. Such requests shall not occur more frequently than [***] and will be conducted during normal operating hours in a manner to minimize disruption to [Developer’s] business.
Source: taken from a development funding agreement between CEPI (Funder) and Novavax (Developer) for a COVID-19 vaccine. Read in context.
Without limiting the foregoing, at the [Funder’s] request, the [Developer] will permit the [Funder] or its representatives to inspect (at a reasonable time and location) the scientific records of the [Developer] relating to each Program with due regard to the reasonable need to protect trade secrets covering the Platform Technology.
Source: taken from a strategic relationship agreement between the Bill & Melinda Gates Foundation (Funder) and Arsanis (Developer) in connection with an $8 million investment by the Foundation to support a Staphylococcus aureus antibody development program. Read in context.
During the Project Commencement Period, within [*****] of the end of each calendar quarter, [Developer] will (A) provide the [Funder] with written reports in form and detail reasonably satisfactory to the [Funder] and confer with the [Funder] (by teleconference or in scheduled site visits as appropriate) regarding progress with respect to the Projects including information regarding progress against the Global Access Commitments and (B) coordinate with the [Funder] to determine reasonable times for the [Funder’s] representatives to make site visits to the [Developer’s] facilities and to conduct any inspections with respect to the Projects. Such site visits may be conducted in [*****] by a consultant selected by the [Funder] and approved by the [Developer] (such approval not to be unreasonably withheld or delayed) who is subject to a confidentiality agreement that is reasonably acceptable to the [Developer] and the [Funder].
Source: taken from a development funding agreement between the Bill & Melinda Gates Foundation (Funder) and CureVac (Developer) for a COVID-19 vaccine. Read in context.
The [Funder] may appoint a Site Visit Group, made up of a small team of independent experts and observers from the [Funder]’s Technology Transfer Division. The Site Visit Group shall have reasonable access for the duration of the Programme during normal working hours and at mutually agreed times to visit all the premises where the Programme is being conducted to consult informally with [Developer]’s employees, researchers, consultants or contractors working on the Programme to evaluate progress, performance and key issues and to report back to the [Funder] and the RSG on their findings.
The Site Visit Group may recommend that the [Funder] terminates the Programme due to a serious failure in the progress, management or conduct of the Programme (including but not limited to a finding that the Programme will be unable to achieve the next Milestone within a reasonable time period after the relevant Milestone Date), or due to a major external scientific, technical or commercial barrier which means that the Programme is unlikely to succeed in its objectives. If the Site Visit Group makes such a recommendation pursuant to this Clause [x], it must provide written notice of its recommendations and the rationale therefor to the Parties.
If [Developer] is unable to remedy a serious failure or external barrier identified by the Site Visit Group pursuant to Clause [x] within [**] Business Days, or such longer time period as the [Funder] may, in its sole discretion, allow, the [Funder] may terminate this agreement pursuant to Clause [x].
Source: taken from a research funding agreement between the Wellcome Trust (Funder) and PTC Therapeutics (Developer) under the Trust’s Seeding Drug Discovery Strategic Award Programme for the discovery and development of a novel glioblastoma treatment. Read in context.
Related Commentaries
Audit rights can be used to support assessments of product affordability, particularly through validation of estimated cost of goods calculations.
Reporting schedules should align with any steering committee or other project governance related meetings to ensure that the partners have up-to-date data available for discussion.
Reporting requirements should be linked closely to funder information needs for measuring the impact of their investments.
This toolkit has been built based on the data in the MAPGuide and the GHIAA team’s experience of negotiating and implementing agreements. We intend that the toolkit will evolve and expand over time based on input from MAPGuide users and availability of new agreements showing examples of alternative approaches. We welcome ongoing constructive dialogue around these materials and encourage you to contact us or fill in our feedback survey to share your thoughts, questions and suggestions.
Authors: Bridie Telford
First publication date: November 21, 2022