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International pharmaceutical and biotechnology companies and groups of researchers can conduct clinical trials in Australia. However, the trials must be sponsored by an Australian entity. The entity can be an individual, company, institution or organisation that takes responsibility for the initiation, management, provision of insurance and indemnity, and/or financing of a clinical trial.

Clinical trials can also be sponsored by individual Australian researchers (e.g. medical practitioners) or bodies and organisations (e.g. hospitals, area health services, nongovernment organisations, cooperative research groups). The type of sponsor will vary from trial to trial, depending on who takes overall responsibility for the conduct of the trial.

It is often a commercial company or other organisation that initiates, organises and supports a clinical trial study and carries the medico-legal responsibility associated with the conduct of the trial. In these circumstances, authorisation of the trial depends upon the company or organisation providing an indemnity (such as in the Medicines Australia format) and evidence that it is covered by relevant insurance arrangements for the conduct of the clinical trial.

In circumstances where an investigator initiates and organises the trial, he or she may be defined as the sponsor of the trial and will be responsible for the sponsor's functions. In other cases, the investigator’s institution (e.g. hospital, research institute or university) is defined as the sponsor with the same functions.  These scenarios often arise when another party (usually a pharmaceutical or medical device company) provides the medicinal product or device used in the clinical trial but has no other involvement in the conduct of the trial.