Presentation Conflict of Interest Office University of

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Presentation Conflict of Interest Office University of Powered By Docstoc
and Conflict of Interest
      in Science
        February 23, 2010
      Barbara Barnes, MD
        Ann Mathias, JD
        David Smith, JD
  David Wehrle, CPA, CIA, CFE
What is a Conflict of Interest?

   A potential Conflict of Interest (COI)
    may exist if an individual’s outside
    interests (especially financial) may
    affect, or perceive to affect, his/her
    research, teaching, or administrative
    activities at the University.
Why does Conflict of Interest
management matter?
In order to ensure that research results are
free from bias (whether conscious or
unconscious) arising from the personal
financial interests of the investigators,
universities have an obligation to monitor
and manage conflicts of interest of their
    Legal Requirements
    Public Policy Considerations
    Public Perception
       Conflict of Candor – Transparency

NIH                                        FDA

Investors                           University
  (& SEC)
Legal Considerations

 PHS/NSF    Standard
 FDA Standard

 Stark Act

 Insider Trading Laws
        PHS/NSF Standard
        Considerations in Tech Transfer
   Federal PHS regulations (NSF has similar
    guidelines) require the University to maintain
    written, enforced policies and procedures to
    manage faculty members’ financial conflicts of
   A “Significant Financial Interest” exists if a faculty
       receives annual remuneration in excess of $10,000
        from a company that has an interest in the faculty
        member’s research, or
       has an ownership interest in the company that
        exceeds 5% or $10,000.
                     THE CHRONICLE
                     of Higher Education
Baylor College of Medicine Faces NIH
 Sanctions Over Financial Conflicts
  Paul Baskin  Tuesday, January 20, 2010
  The NIH has ordered tougher financial disclosures on all grant
    applications from Baylor College of Medicine, [citing] ”serious
    concerns” about the college’s compliance with regulations
    governing conflicts of interest….
  The doctors who spoke favorably of Vytorin® included Christie M.
    Ballantyne…who collected $34,472 during a five-month period…
  The NIH informed the institution last month that the agency would
    impose ‘special award conditions” on all future grants.
Tighter PHS Regulations
Coming May 1, 2010
 A combined House and Senate
  appropriations committee agreed on a
  2.3% bump for the NIH, which will
  have a $31 billion budget this year;
 The increase is tied to stricter COI
  regulations, due to be enacted May 1
       FDA Regulations
       See 21 CFR Part 54

   Clinical investigators testing a drug or device must disclose
    certain financial interests in the sponsor, drug, or device under
      $25,000 in outside support from the sponsor (including
        grants to the investigator’s institution);
      equity/ownership interest in excess of $50,000 in a public
        company; or any ownership in a non-public company;
      a proprietary interest of the investigator in the drug or device
        (e.g., a patent).
   The FDA will evaluate the disclosed conflict and may take
    various actions, including requiring further testing with non-
    conflicted investigators before approving the drug or device.
    (see 21 CFR Sect. 312.70)
Chicago Tribune
November 11, 2009
Doctor-drugmaker ties: Psychiatrist
Dr. Michael Reinstein received nearly
 $500,000 from antipsychotic drug’s
     Company paid him to promote Seroquel®
      despite misgivings about his research
F.D.A. Is Lax on Oversight During
  Trials, Inquiry Finds
January 11, 2009

   The Food and Drug Administration does almost
    nothing to police the financial conflicts of
    doctors who conduct clinical trials of drugs and
    medical devices in human subjects,
    government investigators are reporting.
   Moreover, the investigators say, agency
    officials told them that trying to protect patients
    from such conflicts was not worth the effort.
FDA Warning Letter

   The FDA sent a warning letter to
    researcher, Dr. Leslie Baumann,
    January 11, 2010, regarding
    promotional statements made in
    violation of FDA regulations.
Stark Act

 The Stark Act relates to physician
  referral and prescribing practices.
 The law forbids physicians or their
  immediate family members from
  referring patients to a “designated
  health service” from which the
  physicians or family members receive
  “anything of value.”
Federal False Claims Act (Anti-Kickback)

   Violation for knowingly and willfully offering or
    paying/soliciting, or receiving remuneration in
    return for purchasing, leasing, ordering, arranging
    for, or recommending an item or service paid in
    whole or part by Medicare/Medicaid
      Even if the expenditure has a legitimate
        purpose, there is liability if one purpose is to
        induce purchases
      Applies to both the giver and receiver
      Felony: fine and/or imprisonment
   Qui tam: actions can be initiated by
False Claims Cases 1996-2005

   $9.3 billion recovered and > $1 billion
    paid to whistleblowers
   Whistleblowers are frequently physicians
    and executives, 75% of whom are
    employees of defendants
   Actions against pharmaceutical
    companies comprised 4% of cases but
    39% of recoveries
   Integrity in Science Watch Week of 11/05/2007

Orthopedic Surgeons' Buck-raking Exposed

  Nearly 50 orthopedic surgeons, many affiliated with
  the nation's top teaching hospitals, each earned
  over $1 million a year in consulting contracts and
  royalties from the five companies that make
  artificial knees and hips. The payment disclosures
  were posted on the companies' websites last week
  as part of a $311 million anti-kickback settlement
  between four of the firms and the U.S. attorney for
  northern New Jersey.
Industry Relationships

   In response to concerns over the impact
    of industry interactions on the
    prescribing practices of healthcare
    professionals, the University’s Schools of
    the Health Sciences and UPMC adopted
    a policy addressing such relationships:
University COI Policies
Pitt and CMU have policies to address
  the following concerns:
     Consulting Work—Conflict of Commitment
     Management, directorship, or ownership of
      Start-up Company
     Research performed by Pitt and CMU for
      company in which faculty member has an
       • Differences in policies are due to the different
         types of research conducted at our respective
Perspective of the Financing

   Role of a Director/Officer of a
    Company—the fiduciary obligation.
   Need for the Company to evaluate the
    technology as a business matter—rather
    than as a purely scientific inquiry.
   Scientific Advisory Boards for start up
     Conflict of Interest

A research administrator recently received a conflict of interest
disclosure from a faculty member who is part owner of a
company in the same field as her research. She has 25% of the
equity; faculty members in other departments own the remaining
75%. She does some consulting for the company, for which she
earns $5,000 a year.

The company recently licensed her invention from the
Technology Licensing Office. She expects to receive $20,000 in
licensing proceeds next year. The administrator wants to know
how to manage this conflict.

   Further information on the University
    of Pittsburgh’s Conflict of Interest
    Policies can be found at: