The Role of Contract Law in Shaping the Pharmaceutical Sector: A Legal Study
Abstract
Any agreement which can be enforced by law is a contract. The law of contracts is crucial in pharmacy, regulating agreements between various stakeholders like pharmaceutical companies, suppliers, distributors, government entities and even patients. These contracts cover areas like supply agreements for raw materials and finished products, clinical trial agreements, licensing agreements for intellectual property, and more. Effective contract management ensures compliance, minimizes risk, and facilitates the smooth operation of the pharmaceutical industry. Business connections are established by every pharmaceutical company, with different manufacturers, suppliers, service providers, financial institutions, etc. In all these transactions, contracts are involved and regulatory authorities worldwide mandate for clearly defined, agreed and controlled contracted services. Various types of contracts, along with types of clauses required to be covered in such contracts, which are entered into by the pharmaceutical industry, with its various stakeholders, in India as well as outside, have been explored in this article. The application of Law of Contracts has been illustrated in the regulatory agencies of USA, European Union and India. Application of Law of contracts has been explored from the stage of inception to closing of a pharmaceutical company. The three types of contracts (Contracts by Agreement, Standard Form Contract and Promissory Estoppel) have been described, with cited case studies. Salient features, key types of agreements, key considerations, common examples, and specific applications in pharmaceutical industry, common clauses, of the three types of contracts have been described. The authors conclude that in view of the significant application of Law of Contracts in pharmaceutical industry, it would be prudent if the students / researchers in pharmacy, particularly those in the area of drug regulatory affairs, be fully aware of this law, and that this law may be included in the Pharmacy curriculum.
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References
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