Stopping Disputes Before They Derail Innovation: The Emerging Role of Life Sciences Dispute Review Boards

The pressure points that drive most life sciences disputes are familiar: safety signal reporting and pharmacovigilance obligations, Good Manufacturing Practice (GMP) and quality concerns, disagreements over whether milestones have been met, royalty calculations, promotional compliance, and unresolved questions about the scope of licensed rights. What unites these issues is that they tend to be technically complex, time-sensitive, and deeply entangled with day-to-day operations. Deferring these disputes to arbitration before a neutral third party new to the dispute can lead to delays, the cost of which is measured not just in legal fees but in regulatory exposure, lost development time, and damaged commercial momentum.

The American Arbitration Association (AAA), through the International Centre for Dispute Resolution (ICDR), has launched a new life sciences-specific offering intended to address this gap: Life Sciences Dispute Review Boards (DRBs). While DRBs are well-established in other industries, most notably construction and infrastructure, their formal extension into life sciences is a meaningful development for in-house counsel and deal teams structuring complex collaborations.

The AAA-ICDR introduced the Life Sciences DRB in March 2026, and the framework is now largely in place: model clauses for single-member and three-member boards, a model agreement among the parties and the board members, administrative procedures, and, more recently, a published fee schedule. Six months in, there is no publicly reported use of a Life Sciences DRB to date. This means that the first parties to adopt a DRB will be answering, in their own agreements, the questions the model documents leave open, and those questions are better answered at the contracting stage than in the middle of a dispute.

Understanding the Life Sciences DRB

Disputes in life sciences collaborations rarely begin in a courtroom or an arbitral tribunal. They begin months or years earlier, in joint governing committee meetings, missed milestones, quality or financial audits, and divergent commercial expectations. By the time formal proceedings begin, the underlying relationship has frequently already deteriorated, and the cost of resolution — financial, operational, and strategic — has multiplied.

A DRB is neither arbitration nor mediation. It is a standing panel of neutral experts, typically one or three members established at the outset of a commercial relationship and engaged throughout its life cycle. Unlike a traditional alternative dispute resolution neutral, who is appointed only after a dispute has crystallized, the DRB is briefed on the parties’ contract, operations, and evolving risks on an ongoing basis.

The AAA-ICDR’s model DRB clause spells out the mechanics. The DRB’s function is “to maintain a current knowledge of the [Parties/Joint Venture/Company/Project/implementation of the Contract] and to resolve disagreements at an early stage before they escalate into an adversarial posture.” The model rules go on to provide that “all disagreements or disputes arising out of or in connection with the present Contract […] shall be submitted — in the first instance — to the DRB.”

To keep the board current, “the [p]arties shall host two meetings per year with the DRB,” including “at least one tour of the relevant facility,” and “shall additionally provide to the DRB quarterly updates on the status of the Contract.” Once a dispute is referred, each party has 10 days to submit “a memorandum to the DRB not exceeding 10 pages;” the DRB holds an informal hearing within 30 days, with “no summary or transcript of the proceedings;” and it issues a written recommendation “within 30 days of the hearing.”

The simplest way to think about a DRB is as an upstream layer in a company’s dispute resolution architecture. Ideally, the process will operate before the parties engage in dispute resolution under the arbitration or litigation provisions already embedded in most life sciences contracts.

The AAA-ICDR has positioned the Life Sciences DRB for high-value, operationally complex agreements in which disagreements can quickly disrupt development timelines, supply chains, or regulatory standing.

Strategic Benefits and Trade-Offs

Benefits

• Relationship preservation. Many life sciences collaborations are multiyear, capital-intensive investments in which the cost of relationship breakdown materially exceeds the cost of the underlying dispute. A standing board is built to resolve issues before they harden.
• Speed and expertise. A panel already familiar with GMP, pharmacovigilance, regulatory pathways, and licensing economics can resolve technical disagreements faster than a tribunal appointed after the fact.
• Less management distraction. Senior executives and in-house lawyers stay focused on the business rather than on dispute strategy.

Trade-Offs

• Recurring costs. Standing fees, periodic meetings, and information-sharing obligations are incurred even in years when no dispute arises.
• Advisory by default. Recommendations are nonbinding unless the parties contract for binding or conditionally binding effect; a rejected recommendation simply shifts the dispute to arbitration.
• Confidentiality and privilege. Continuous briefing of a third-party panel raises questions about privilege and the handling of sensitive operational, regulatory, and trade secret information.
• Record building. Under the AAA-ICDR model agreement, DRB submissions and recommendations are admissible in any later arbitration or litigation. Positions taken early — sometimes before discovery — can constrain later strategy, and a recommendation from credentialed industry experts may carry significant persuasive weight. Parties may feel pressure to “win” the DRB phase, pulling some of the cost and intensity of arbitration earlier in the timeline.

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The AAA-ICDR’s new Life Sciences DRB offering is a meaningful addition to the dispute resolution tool kit available to pharma, biotech, medical device, and other life sciences companies. For the right relationship — joint R&D agreements, licensing and intellectual property arrangements, contract development and manufacturing organization and contract manufacturing organization relationships, supply and distribution agreements, and strategic collaborations and joint ventures — it can preserve commercial value, reduce management distraction, and bring industry expertise to bear before disagreements harden into formal disputes. The companies most likely to extract value are those that evaluate the offering deliberately at the contracting stage, draft the clause with care, and align internal stakeholders on how the DRB will be used in practice. As a relatively new entrant in the life sciences dispute resolution landscape, the DRB framework will inevitably be refined as adoption grows and early users develop institutional experience.

For more information or questions about whether a DRB may be appropriate in your circumstances, reach out to Alexandra Valenti or James Breen.