Managing Conflicts of Interest
Presentation to Rensselaer’s Large Business Managers Group
By
Jeffrey Armstrong
Whiteman Osterman & Hanna, LLP (Office of the General Counsel)
&
Frank J. DiSanto
Research Administration & Finance
10/16/2008
Overview
- What is a Conflict of Interest?
- What is a Conflict of Commitment?
- How does a college or university manage or
eliminate these conflicts?
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What is a Conflict of Interest?
A potential conflict exists when there is a
possibility that an individual’s outside financial
interests could directly and significantly affect
the individual’s professional actions or decisions.
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Where can a Conflict of Interest occur?
-
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Purchasing and other business relationships
Gifts
Employment
Research
Technology licensing
Activities of family members
What is a Conflict of Interest in Research?
– In the sponsored research setting, a potential conflict
exists when there is a possibility that an individual’s
outside financial interests could directly and significantly
affect the design, conduct, or reporting of the research.
– Under federal law, a financial interest is “significant” if:
• it amounts to more than $10,000 per year in outside income; or
• involves equity either worth more than $10,000 or equity
representing more than 5% of the outstanding equity in a
company.
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Sources of Law
Federal:
- National Science Foundation -“Investigator Financial Disclosure Policy”
- National Institutes of Health “Objectivity in Research”
- Other federal agencies – required FAR clauses imposing conflict of
interest rules
State:
- Contractual clauses in grant and other awards
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Essential Requirement #1
All conflict of interest laws require adoption of
institutional procedures that require faculty and
staff to disclose to the institution outside
financial interests above specified thresholds
when those interests would likely be affected by
the research.
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Goals of a Conflict of Interest Policy
• Protect research participants
• Protect the integrity of the research
• Protect the institution, faculty, students
– Funding Status
– Litigation
– Reputation/Public Image
• Reconsideration & Noncompliance
• “Good Policy Practices”
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Conflict of Interest Policy
- May be more than one policy
- Trustees
- Officers
- Employees
- Faculty
- Research policy
- Institutional Conflict of Interest
- Typical Scenario: Institution has a financial interest in a
technology/company/invention and the research is
conducted at that institution
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Conflict of Interest Policy – Basic terms
-
Definitions:
-
-
including what is a Significant Financial Interest which
must be reported
Disclosures:
-
-
periodic (usually annual) disclosures
ad hoc disclosures when potential conflicts arise
Responsible Individuals:
-
Who are the responsible individuals who will
(i) Receive and review the disclosures
(ii) Create the conflict management plans
(iii) Manage the plan
(iv) Enforce the plan
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Essential Requirement #2
The institution must review the disclosures,
determine whether there is a conflict, and, if so,
manage, reduce, or eliminate it, before funds are
expended.
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How are Conflicts Disclosed at
Rensselaer?
1.
2.
3.
4.
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Annual Survey from HR
Project Information Form (PIF)
Human Subjects Protocols
Intellectual Property Processes (disclosure,
patenting, licensing)
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Essential Requirement #3
The institution must disclose and/or otherwise
notify the sponsoring agency of the nature of the
conflict or the action taken to manage, reduce,
or eliminate it.
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October 4, 2008
Emory U. Psychiatrist Failed to Report Income From Drug Makers
A prominent psychiatrist at Emory University is the latest researcher to come under
fire in Congress for violating federal and university rules against financial conflicts of
interest.
The New York Times reports that Charles B. Nemeroff, chairman of the psychiatry
department at Emory and former editor in chief of the journal
Neuropsychopharmacology, earned more than $2.8-million for consulting with drug
companies from 2000 to 2007 and hid much of that income from his university.
October 14, 2008
NIH Halts Study at Emory Over Concerns About Drug Company's Payments
The National Institutes of Health has halted a $9.3-million five-year research project at
Emory University, pending an investigation into potential conflicts of interest by the
project’s former leader, according to Ron Sauder, vice president for communications
and marketing at Emory.
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Basics of Conflict Management
-
Adopt an Institution-wide Conflict of Interest Policy
Establish training
Establish a disclosure procedure
When the Institution learns of a conflict, adopt
specific plans to manage or eliminate it
- Establish processes to ensure that the management
plans are enforced
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Individual Conflict Management Plans –
Basic Terms
- Summary of Conflict
- Set forth facts which describe the conflict
- Address management of primary conflict
- Is a particular business contract or project allowed or
prohibited
- If allowed, appoint a disinterested person to directly
oversee the relationship or the project
- Make sure that the conduct of the project is reported
to supervisors
- Establish rules for use of resources, such as facilities,
students or staff (e.g. prohibit dual employment of
students or staff, use of university facilities by outside
companies without permission, etc.)
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Individual Conflict Management Plans –
Basic Terms (cont.)
- Consider and manage effects on other projects
- Aside from primary transaction in which conflict exists,
manage other projects that the conflict could affect (e.g.
technology license to a professor’s start up company might
affect other research projects involving similar work, etc.)
- Responsible Individuals
-
- Establish persons who will be responsible to supervise the
conflict management
- Establish an appeal process to resolve disputes
Transparency
- Set
forth procedures to ensure that change in facts will
always be reported
- Require fact that potential conflict exists to be disclosed to all
who might otherwise be misled (e.g. in publications, etc.)
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Individual Conflict Management Plans –
Basic Terms (cont.)
- Follow-Up
- Establish a regular process of ensuring that the
conflict management plan is being adhered to
- Consequences
- Be clear in the plan about the possible penalties for
noncompliance
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What is a Conflict of Commitment?
A conflict of commitment exists when the
commitment to external activities of a faculty or
staff member adversely affects his or her
capacity to meet their job responsibilities.
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What can cause a Conflict of
Commitment?
-
External consulting by faculty or staff
Being over committed on sponsored projects
Outside teaching
Officer or Director in outside organizations, including
churches and nonprofit organizations
- Start Up or other entrepreneurial businesses
- Note: A conflict of commitment often exists alongside of a
conflict of interest and both may need to be addressed at the
same time.
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What can we expect?
-
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Greater focus by government
Continued focus by the press
Audits
OIG involvement
Legal action?
Significant conflict of interest?
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