Alabama Circuit Court Complaint Form Negligence by hzp21021

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									Liability &
Clinical Research
June 27, 2007
                Adam Robison, Esquire
                 Health Industry Group
                 Vinson & Elkins LLP
I. Presentation Overview



• Introduction
• Types of Clinical Trial Liability
  – Tort
  – Constitution
  – Criminal
  – Regulatory/Statutory
• Resources
                                      2
   I. Presentation Overview


                 Contract   Billing
                                      False Claims Act
      Informed                                  Misuse of Funds
      Consent
                                                   Research
       Torts
                                                   Misconduct
 Conflicts of                                    Statutory
 Interest                                        Violations
                                               Regulatory
Constitutional                                 Liability
Law Liability

                                                              3
II. Introduction


Definitions

• Definition of Legal Liability - Any legal
   responsibility where a failure to fulfill can give
   rise to claim for damages

• Types of Legal Liability in Clinical Trials
  – Civil Liability (actual damages, punitive damages, injunctive
      relief)
   – Administrative Liability (penalties, recoupment, exclusion)
   – Criminal Liability (imprisonment, criminal penalties)
                                                                    4
II. Introduction


Who Sues

• Research Subjects
• Families or parents of
  research subjects
• Federal and State
  government agencies
• Institutions
• Investigators
• Sponsors
                           5
II. Introduction


Who is Sued

• Institutions & Employees
• Researchers
• Physicians
• Sponsors, drug and
  manufacturers
• IRB members


                             6
II. Introduction

Who is Sued, Continued . . .


Robertson v. McGee (N.D. Okla. 2002)
  –   Allegations
      • Subjects in melanoma research alleged lack of informed
          consent, failure to comply with federal regulations, and
          breach of due process and right to be treated with dignity
      • Lawsuit against Oklahoma University School of Medicine,
          University administration, and individual IRB members
  –   Settlement
      • Settlement included individual IRB members



                                                                       7
III. Tort Liability




                      8
Tort Liability




• Definition of Tort – A civil wrong arising from a breach
  of a duty not originating in contract. It is an act that
  injures someone in some way, and for which the
  injured person may sue the wrongdoer for damages.


                                                             9
Tort Liability


• Examples of Torts Alleged In Connection
  With Clinical Trials:
  –   Negligence – failure to act as a reasonable person would in
      similar circumstances
  –   Negligence Per Se – eliminates the need to prove breach of
      duty; violation of a statute is negligence per se
  –   Informed Consent
      • Battery – treatment without consent of the patient
      • Negligence – breach of the physician/researcher’s duty to
          disclose information about procedure and risks to patient
  –   Breach of Fiduciary Duty – breach of duties of trust,
      confidence, and candor
  –   Strict Products Liability – an absolute duty to make
      something safe; does not depend on a finding of negligence
                                                                  10
Tort Liability


  Negligence and Products Liability
• Quinn v. Abiomed (Pa. 2002)
  CHF patient participated in artificial heart study and died after
  months of painful complications. Subject’s wife sued hospital and
  hospital corporation, medical school, device manufacturer and
  patient advocate (PA)
  – Allegations:
     •   Incomplete & misleading informed consent (cited
         “therapeutic misconception”)
     •   Breach of fiduciary duty
     •   Products liability
  – Result:
     •   $ 125 K private settlement
                                                                 11
Tort Liability


  Negligence Per Se
  – Daum v. Spinecare Medical Group, Inc. (1997)
     •   Daum sued after unsuccessful spinal fusion surgery,
         claiming he was not informed surgical device was
         experimental and part of a clinical trial
     •   Court allowed negligence per se claim based on
         physician-researcher’s failure to follow FDA regulations
         regarding informed consent




                                                                    12
 Tort Liability


Informed Consent (Conflicts of Interest)
• Jesse Gelsinger
  –   In 1999, 18 year old research subject volunteered for gene transfer
      study at the University of Pennsylvania. After receiving large dose
      of viral vector, went into multiple organ failure and died.
  –   Investigation revealed:
      • Consent form did not state that monkeys had died, and other
          humans had experienced serious side effects
      • Principal researcher did not disclose that he was the founder of
          the research company involved
  –   Consequences:
      • Family sued university, director of bioethics program, and
          principal researcher for failing to inform about risks and previous
          adverse events
      • Private Settlement (amount not disclosed)
                                                                         13
 Tort Liability


Informed Consent
• Grimes v. Kennedy Krieger Institute, Inc. (2001)
  –   1993 research study involving healthy children living in low cost
      Baltimore housing aimed to compare methods of home lead
      abatement. Children were expected to continue living in homes,
      even after presence of toxic amounts of lead was revealed.
  –   Allegations:
      • IRB wrongly approved the research and helped investigators get
          around federal regulations for the protection of children
      • Lack of informed consent
      • Breach of investigator’s special duty of care for vulnerable
          population
  –   Result:
      • Families sued research institution and researchers for
          negligence and breach of contract                             14
      • University and principal researcher sued by government
Tort Liability


Informed Consent (Class Action)
• Diaz v. Hillsborough County Hospital Authority
  (1990)
  –   Class of women who participated in experimental treatment
      while pregnant
  –   Allegations:
      • Flawed informed consent process
      • Violation of right to be treated with dignity
  –   Result:
      • $ 3.8 million settlement


                                                                  15
Tort Liability


Informed Consent (Class Action)
• In re Cincinnati Radiation (1994)
  –   1960’s radiation cancer study was characterized as
      “therapeutic,” though it lacked any therapeutic effect
  –   Allegations:
      • Lack of informed consent
  –   Result:
      • Class certification initially denied, then certified as “hybrid”
          class
      • Settlement for monetary award and injunctive relief


                                                                           16
Tort Liability


Informed Consent (Class Action)
• Craft v. Vanderbilt University (1994)
  –   1940’s research on effects of radioactive iron on pregnant
      women and their fetuses; follow up studies in 1960’s
  –   Complaint alleged failure to obtain informed consent
  –   Court certified two classes:
      • Women who were subjects of the study
      • Children who were fetuses during the study
  –   Plaintiffs awarded injunctive relief in the form of medical
      monitoring


                                                                    17
 Tort Liability


  Breach of Fiduciary Duty
• Moore v. Regents of the University of California
  –   In 1976, Moore was treated for hairy cell leukemia at UCLA
      Medical Center. Moore’s spleen was removed by Dr. Golde,
      allegedly to slow the disease progress
  –   Over the next seven years, Moore returned to UCLA at Golde’s
      direction, as part of “treatment”
  –   Golde obtained a patent and earned several hundred thousand
      dollars using Moore’s spleen cells and T-lymphocytes, but never
      informed Moore about the research



                                                                   18
Tort Liability


Breach of Fiduciary Duty
Moore v. Regents of the University of California (cont.)
–   Moore sued Dr. Golde for breach of fiduciary duty:
    • Golde allegedly concealed his economic interest in Moore’s
      tissue and blood samples
    • Court said, “…the existence of a [physician’s] motivation for a
      medical procedure unrelated to the patient’s health is a potential
      conflict of interest and a fact material to the patient’s decision.”
      (Emphasis supplied)
    • Result does not prohibit research that will lead to patents or
      financial gain; when physician orders procedures, patient
      should be informed of the motivation, if any, besides treatment

                                                                     19
IV. Constitutional Law Liability


• Breach of due process
  right
• Violation of liberty
  interests and right of
  “privacy”
• Breach of right to be
  treated with dignity




                                   20
Constitutional Law Liability


•   Robertson v. McGee (N.D. Okla. 2002)
    –   Allegations
        • In addition to allegations of lack of informed consent and
            violations of federal regulations, complaint alleged
            breaches of right to be treated with dignity
        • Lawsuit against Oklahoma University School of Medicine,
            University administration, and individual IRB members
    –   Settlement
        • Settlement included individual IRB members




                                                                   21
V. Criminal Liability




                        22
Criminal Liability


• U.S. v. Paul H. Kornak (N.D.NY. 2005)
  –   Allegations:
      • Fraudulently enrolled participants who did NOT meet
          study criteria for an investigational cancer therapy
      • Criminally negligent homicide (One participant died
          following improper inclusion in the study)
      • Defrauding sponsor companies of over $600,000
  –   Result:
      • 1 year in prison
      • Required to reimburse drug sponsors
      • Lifetime debarment from Federal agency transactions

                                                                 23
Criminal Liability


• U.S. v. Eric Poehlman (D. Vt. 2005)
  –   Allegations:
      • Making material false statements on a Federal research
          grant application
  –   Result:
      • Lifetime debarrment from Federal funding
      • Lifetime exclusion from Federal health care programs
      • Must submit letters of retraction and correction addressing
          his scientific misconduct to scientific journals




                                                                  24
    VI. Regulatory and Statutory Liability



Overview of Regulatory
  and Statutory Liability

•    Human Research
     Subject Protection
•    Privacy and
     Confidentiality
•    False Claims Act



                                             25
Human Research Subject Protection


History of Regulations
• Jewish prisoners of the Holocaust were forced to
  undergo scientific “experiments” to observe the
  physical effects of:
  –   Freezing
  –   Malaria
  –   High Altitude
  –   Poison
  –   Mustard Gas (as well as many others)
• The Nuremberg Trial against 20+ German physicians
  began December 1946
• 16 were found guilty; Nazi War Crimes Tribunal set
  forth standards for research involving humans: “The
  Nuremberg Code”
                                                        26
Human Research Subject Protection

Nuremberg Code Standards:
  – Voluntary Consent - voluntary, informed, and
    uncoerced
  – Benefits of participation should outweigh risks
  – Participants should have option to stop participating
  – Experiment should be conducted:
    • By qualified persons
    • With adequate preparation, and
    • At appropriate facilities to protect against harm to
      subjects
  – Researcher should be prepared to terminate
    experiment at any stage if likely to result in injury 27
Human Research Subject Protection


Declaration of Helsinki
• World Medical Association’s guidance to physicians
  engaged in biomedical research involving humans
• Governs international research in two general areas:
  –   Research as part of clinical care
  –   Non-therapeutic research
• Last revised 2000
• Basis for FDA “Good Clinical Practices”




                                                         28
Human Research Subject Protection


National Research Act and Belmont Report
• National Research Act (1974)
 – Created National Commission for the Protection of
   Human Subjects of Biomedical and Behavioral
   Research, which drafted the Belmont Report
• Belmont Report (1979)
 – Statement of basic ethical guidelines for research with
   human subjects
 – Three core principles:
    •   Respect for persons – Individual autonomy and protection for those
        with diminished autonomy
    •   Beneficence – Maximize possible benefits and minimize possible harm
    •   Justice – Fairness in distribution of benefits and burdens
                                                                     29
Human Research Subject Protection

HHS Policy For Protection of Human Research
 Subjects (Common Rule)
1981:
• Regulations pass, based on Belmont Report
• Department of Health and Human Services (HHS): Title 45 (public
  welfare) of Code of Federal Regulations (CFR), Part 46
  (protection of human subjects)
• Food and Drug Administration (FDA): Title 21 (food and drugs)
  CFR, Parts 50 (protection of human subjects) and 56
  (Institutional Review Boards)
1991:
• Other federal agencies adopt section of HHS regulations (45 CFR Part
   46, Subpart A)
• Known as the “Common Rule”
Today:
• Most federal agencies that support or conduct HSR have adopted the
  Common Rule
                                                                   30
Human Research Subject Protection


Common Rule (HHS)
• Located at 45 CFR Part 46, Subpart A
• Applies to: Research funded by federal agency and institutions
  who have agreed to comply through federal wide assurance
  (FWA)
• Key provisions:
  –   Institutional compliance
  –   Informed consent must be obtained and documented by researcher
  –   IRB requirements
  –   Additional protections for “vulnerable” subjects:
      • Children
      • Pregnant women
      • Prisoners
                                                                       31
Human Research Subject Protection

Other Regulations and Guidance
• FDA Regulations at 21 CFR Parts 50, 56
  –   Similar to the Common Rule
  –   Research on new drugs, devices, etc. must comply with FDA
      regulations on HSR
  –   FDA also issues guidance to assist IRBs, researchers,
      manufacturers and sponsors with regulatory compliance issues
• HHS Office of Human Research Protection (OHRP)
  –   Recent guidance (Jan. 2007) on reporting adverse and
      unexpected problems




                                                               32
Human Research Subject Protection


Federal Enforcement Agencies
1. HHS Office for Human Research
   Protection, Division of Compliance
   Oversight (DCO)
2. HHS Office of Inspector General
   (OIG)
3. HHS National Institute of Science,
   Office of Research Integrity (ORI)
4. FDA Bioresearch Monitoring
   Program (BIMO)
5. U.S. Department of Justice (DOJ)
                                        33
Human Research Subject Protection



                 HHS

  NIH      FDA         OIG      OPHS


          BIMO               OHRP         ORI


                                    DCO
                                                34
    Human Research Subject Protection


Office for Protection of Human Subjects (OHRP)
•   Conducts complaint investigations and not-for cause
    investigations
    –   Not-for-cause investigations can be triggered by relatively few
        reports of unanticipated problems or noncompliance
•   Findings of investigation published on OHRP website
•   Based on noncompliance with assurance, OHRP can:
    –   Suspend all research conducted under assurance
    –   Require notice of an institution’s or investigator’s past
        noncompliance to DHHS scientific peer review groups prior to
        review of new projects
    –   Debar an institution or investigator from all government programs
                                                                        35
 Human Research Subject Protection


Enforcement Action
• John Hopkins University
  –   In 2001, healthy college student volunteered for asthma study at
      Johns Hopkins University, but later died as a result of inhaling
      hexamethonium
  –   Investigation revealed:
      • Failure to sufficiently consider history of hexamethonium
      • Failure to obtain IRB approval for protocol deviations
      • Failure of PI to timely report unanticipated adverse events to
          officials
      • Total of 31 research-related deficiencies identified (24 unrelated)
  –   Administrative Consequences:
      • OHRP temporarily suspended all University’s federally-funded
          research (consisting of 2,400+ studies involving 15,000+
                                                                         of
          subjects); required University to submit and comply with plan 36
          correction
 Human Research Subject Protection


• FDA Bioresearch Monitoring Program (BIMO)
  –   Program of on-site inspections/data audits of clinical
      investigators, research sponsors, and IRBs involved in INDs to
      monitor compliance
• Based on noncompliance with FDA requirements,
  agency can:
  –   Withhold approval of new studies at the institution or reviewed by the
      IRB
  –   Prohibit new subjects from being added to ongoing studies
  –   Terminate ongoing studies
  –   Notify regulatory agencies/other parties of the deficiencies in the
      operation of an IRB
  –   Disqualify institution or IRB
      • FDA will not approve an application for a research permit
      • May refuse to consider data from disqualified institution in agency’s
          consideration of a marketing permit application
                                                                         37
  Human Research Subject Protection


Enforcement Action
• Tufts University School of Medicine
  –   FDA put four gene therapy studies at St. Elizabeth’s Medical
      Center on clinical hold after PI failed to promptly report deaths
      of two volunteers
      •   Studies sought to use gene therapy to reverse heart disease
      •   At least one death may have been related to study treatment
  –   St. Elizabeth’s submitted plan of correction in Feb. 2000
      •   Enhancement of IRB responsibilities, especially with respect to
          reviewing and reporting adverse events
      •   Development of a training program relating to adverse event
          reporting
      •   Updating of all adverse events associated with gene therapy
          research conducted by Dr. Isner
                                                                        38
      •   Simplification of documentation of IRB policies
Privacy and Confidentiality




                              39
 Privacy and Confidentiality

                                            •   Medical record numbers
HIPAA Privacy Rule:                         •   Health plan ID numbers
 –   Protected Health Information           •   Account numbers
     (PHI) is any data that contains        •   Certificate/license numbers
     at least one of the following:         •   Vehicle identifiers and serial
     •   Name                                   numbers, including license
     •   Social security numbers                plate numbers
     •   Street address, city, county,      •   Device identifiers/serial
         precinct, zip code, and                numbers
         equivalent geocodes                •   Web addresses (URLs)
     •   All elements of dates (except      •   Internet IP addresses
         year) for dates directly related   •   Biometric identifiers, incl.
         to an individual and all ages          finger and voice prints
         over 89
                                            •   Full face photographic images
     •   Telephone numbers                      and any comparable images
     •   Fax numbers                        •   Any other unique identifying
     •   Electronic mail addresses              number, characteristic, or 40
                                                code
Privacy and Confidentiality


HIPAA Privacy Rule:
 – PHI can only be used in a clinical trial if it is:
    •   De-identified (or partly de-identified)
    •   Authorized to be used by the subject
    •   Approved for use by an IRB
    •   To be used in preparation for research, or to recruit
        subjects
    •   Information from a decedent (with certain restrictions)
    •   Required by law to be disclosed, or
    •   “Grandfathered” research under HIPAA



                                                              41
Privacy and Confidentiality

HIPAA Enforcement Actions
• Regulated by Office of Civil Rights
  –   Civil Penalties: $100 per violation, limited to $25k per year
  –   Enforcement: To date, OCR has engaged only in educational
      efforts.
• Criminal prosecutions referred to Department of Justice
  –   Criminal :
      • $50k and up to 1 year in prison for knowingly use/cause to
         be use health identifier, obtains identifiable health info, or
         discloses identifiable health info
      • $100k and up to 5 years in prison if committed under false
         pretenses
      • $250k if committed with intent to sell, transfer, or use for
         personal advantage, gain, or malicious harm
      • To date, DOJ has prosecuted 4 defendants (employees of
         health care entities) for egregious HIPAA violations,
         including theft and sale of individually identifiable health
         information
                                                                          42
Privacy and Confidentiality


HIPAA Violations in the Context of Research
Examples:
  –   To recruit subjects for a new HIV drug clinical trial, the PI asks a
      hospital employee to look through medical records of patients to
      find names of individuals who are HIV positive so that he may
      contact them directly about participating in the study.
  –   After blood is drawn for a routine blood test on a patient who has
      a rare form of leukemia, the physician instructs a hospital
      employee to save a portion of the sample, marked with the
      patient’s name, for research purposes.
  –   A researcher has properly obtained tissue samples for a study on
      kidney stones. Unfortunately, funding fell through for the study,
      but now she wants to use the samples for a new clinical
      investigation on genetic kidney disease. The tissue samples are
      marked with the subjects’ social security numbers
                                                                      43
Privacy and Confidentiality


Common Rule: Privacy Requirements
• Generally, the IRB must determine that there are
  adequate provisions in the protocol to:
  –   Protect the privacy of subjects
  –   Safeguard confidentiality of sensitive private health
      information
• If PHI is properly coded, it is not considered human
  subject research under the Common Rule, but may
  still be treated as PHI under HIPAA



                                                              44
False Claims Act Liability




                             45
False Claims Act Liability


• Under the FCA, any person who:
  –   Knowingly presents or causes to be presented a false or
      fraudulent claim for payment or approval
  –   Knowingly makes, uses, or causes to be made or used, a false
      record or statement to get a false or fraudulent claim paid or
      approved by the Government, or
  –   Conspires to defraud the Government by getting a false or
      fraudulent claim allowed or paid


• Is liable to the U.S. Government for:
  –   Civil penalty between $5,500 and $11,000 per claim, plus treble
      damages
                                                                  46
False Claims Act Liability


• Types of false claims in research:
  –   Upcoding, overbilling, and double-billing for services
  –   Billing for services not rendered or not covered
  –   Improperly billing government before other payors
• Other violations that may give rise to a “false claim”
  –   Engaging in scientific misconduct
  –   Investigator submission of false reports or false data
  –   Fraud in obtaining or misusing federal grant funds
  –   Conflicts of interest
  –   Failure to comply with federal informed consent requirements


                                                                 47
False Claims Act Liability
Medicare Secondary Payer



• Medicare Secondary Payer laws
  prevent Medicare from paying
  as primary payer in certain
  situations
   –   Medicare is generally billed second
   –   It is illegal to bill the government for
       items or services that are to be paid
       for by the research sponsor
• Knowingly submitting claims in
  violation of the MSP laws
  violates the FCA

                                                  48
False Claims Act Liability
Medicare Secondary Payer


• U.S. ex. rel McCaslin v. Harris County Hospital
  District (2003)
  –   Allegations:
      • Submitting claims to Medicaid and Medicare where those
          payors were not primary
      • Submitting claims to Medicaid and Medicare for items and
          services provided to incarcerated individuals
  –   Result:
      • $15.4 million settlement (announced June 2007)
      • Hospital District entered into Compliance Agreement with
          HHS OIG to ensure future compliance


                                                               49
 False Claims Act Liability
  Billing for Noncovered Services


Medicare Coverage
Associated with Clinical Trials
• Medicare Coverage Policies:
  –   Generally, items or services related to experimental drugs or
      devices are not covered by Medicare. 42 USC 1395y(a)(1)(A)
  –   2000 President Clinton’s Executive Memo authorized Medicare
      payment for routine patient costs
  –   2001 CMS National Coverage Decision (NCD)
      • Authorizes payment for routine patient care costs associated
         with qualifying clinical trials
  –   2007 Proposed NCD policy
      • Revised coverage rules for Routine Clinical Services
• Knowingly filing false/fraudulent claim for payment in
  violation of NCD violates FCA                                    50
False Claims Act Liability
Billing for Noncovered Services


• Rush University Medical Center (2005)
  –   Hospital voluntarily disclosed to the DOJ improper billing
      procedures
      • Services related to cancer trial should not have been billed
         to Medicare as “routine care costs”
  –   Results:
      •   $1 million settlement (refund + 0.50 additional damages)
      •   3 year Certification of Compliance Agreement with OIG
      •   Major compliance oversight
      •   Increased awareness of liability in billing, importance of
          coordinated billing procedures

                                                                       51
    False Claims Act Liability


OIG Compliance Guidance Regarding Federal
  Grants
•    Time and Effort Reporting: Billing for more effort than is possible;
     billing for documented, not predicted, effort; and not accounting
     properly for clinical practice time.
•    Properly Allocating Charges to Award Projects: Institutions’
     accounting systems must appropriately separate funds and be
     attuned to “clearly fraudulent practices” (e.g., PIs on different
     projects trading award funds)
•    Financial Support from Other Sources: Institutions must report
     financial support from all sources. Failure to do so may result in
     charging duplicative charges to award fund and Medicare.

                                                                      52
False Claims Act Liability
Misuse of Federal Funds


• Mayo Foundation
  –   Allegations:
      • Improper transfer of costs from overspent grants to
          underspent grants
      • Accounting system in use did not meet federal
          requirements
  –   Result:
      • $ 6.5 million settlement




                                                              53
False Claims Act Liability
Misuse of Federal Funds


• Thomas Jefferson University, PA (2000)
  –   Allegations:
      • Reported false data on government grant applications
      • Named as principal researcher a scientist who was not
          involved in the study
      • Charged grant for salaries of individuals not involved in the
          research
  –   Result:
      • $ 2.6 million settlement




                                                                   54
False Claims Act Liability
Misuse of Federal Funds


• Harvard University and Beth Israel Deaconess
  Medical Center (2002)
  –   Institutions voluntarily disclosed violations to federal
      authorities after internal audit revealed violations
  –   Allegations:
      • Billing unallowable expenses
      • Researcher salary and equipment expenses exceeded
          budget
      • Charging of expenses unrelated to grant
  –   Result:
      • $ 2.4 million settlement

                                                                 55
False Claims Act Liability
Time and Effort Reporting


• Northwestern University (2003)
  –   Allegations:
      • Overstating time worked by researchers on federally-
          sponsored projects
      • Knowingly failing to comply with time requirements
      • Inappropriately treating doctors’ outside salary as part of
          the institution-based salary
  –   Result:
      • $ 5.5 million settlement




                                                                      56
False Claims Act Liability
Effort Reporting; Billing


• University of Alabama (2005)
   –   Allegations:
       • Overstating work efforts of researchers and employees
       • False billing of Medicare for patients not seen
       • Double billing of Medicare for services also billed to the
           grant sponsors
   –   Result:
       • $ 3.39 million settlement (to resolve two separate false
           claims suits)




                                                                      57
False Claims Act Liability
Misuse of Federal Funds


• Weill Medical College of Cornell University (2005)
  –   Allegations:
      • Improper use of federal funds
      • Charging for full salaries of two nurses who had never
          provided any services related to the grant; University also
          charged full salaries of other employees, even though
          100% of time was not spent on grant-related services
      • Failure to account for outpatient services
      • Double-billing of government
  –   Result:
      • $ 4.3 million settlement


                                                                    58
False Claims Act Liability
Research Misconduct


• Research Misconduct –

  – “Fabrication, falsification, or plagiarism in
    proposing, performing or reviewing research, or in
    reporting research results.” 42 C.F.R. Part 93.

  – Regulations require institutions to implement
    certain procedures to report research misconduct.



                                                         59
False Claims Act Liability
Research Misconduct


• U.S. ex rel. Milam v. University of California (D. Md.
  1995)
  –   Qui Tam action filed by disgruntled former researcher for
      University, after ORI had determined no further investigation
      was warranted for the conduct
  –   Allegations:
      • Making false statements in NIH grant applications for
          cancer research
  –   Result:
      • Complaint dismissed
      • Generally, there is no FCA liability for divergent scientific
          methodologies that do not rise to the level of misconduct
                                                                        60
False Claims Act Liability
Research Misconduct


• U.S. ex rel. Chandler v. Cook County, Ill. (7th Cir.
  2002, aff’d S. Ct. 2003)
  –   PI filed FCA qui tam action after employment ended at
      research center
  –   Allegations:
      • Making false statements in grant applications to National
          Institute of Drug Abuse (NIDA) regarding compliance with
          federal regulations on human subject protections
      • Falsifying data on progress reports of study
  –   Result:
      • Supreme Court affirmed Appellate court decision allowing
          a municipality to be held liable
      • Litigation continues

                                                                 61
False Claims Act Liability
Conflict of Interest


Conflicts of Interest
• Under PHS regulations
  – >$10,000 equity interests held by investigator
    and/or immediate family
  – Equity interest amounting to more than 5%
    ownership in entity
  – >$10,000 in salary/royalties/other payments to
    investigator and/or family
  – Interest that will reasonably appear to be affected
    by research
                                                          62
False Claims Act Liability
Conflict of Interest


Conflicts of Interest
• Under FDA regulations significant financial
  interests must be disclosed:
  –   Compensation affected by outcome of clinical study
  –   >$50,000 equity in sponsor of a covered study
  –   Proprietary interest in tested product
  –   >$25,000 payments of other sorts (including grants)



                                                       63
False Claims Act Liability
Conflict of Interest


U.S. ex rel Cantekin v. University of Pittsburgh

• Allegations:
  – Dr. Cantekin alleged that the University defrauded
     the government by making false financial disclosure
     statements in applications for Federal grants.
  Results
  – Circuit court reversed dismissal of case finding
    there was a genuine issue whether the disclosure
    of the funding would have had an impact on the
    award of the government grant application.

                                                       64
False Claims Act Liability
Multiple Regulatory Violations

• University of Pennsylvania & Children’s National
  Medical Center (2005)
  –   Allegations (from experiment in which Jesse Gelsinger died):
      • Submission of false claims in connection with grant applications and
          reports for federal funds
      • Making false statements and claims in connection with submissions
          to FDA
      • Making false statements and claims in connection with the failure to
          obtain properly informed consent from human research participants,
          and
      • Making false statements to IRBs charged with oversight of research
  –   Result:
      • University and CNMC paid $1 million settlement
      • Restricted research activity (main researcher prohibited from
          serving as a sponsor of an FDA-regulated trial for five years)
      • Increased research oversight and training requirements
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VII. Resources


• OHRP: http://www.hhs.gov/ohrp
• ORI: http://ori.dhhs.gov/
• FDA Clinical Trial Guidance:
  http://www.fda.gov/oc/gcp/
• BIMO: http://www.fda.gov/ora/compliance_ref/bimo/
• OIG: http://oig.hhs.gov/
• DOJ: http://www.usdoj.gov/
• NIH Clinical Trials Website: http://clinicaltrials.gov



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