Conflicts of Interest

Judith L. Curry
Associate General Counsel
NC State University
January 20, 2011
What are Conflicts of Interest and
Conflicts of Commitment?
Why should you be concerned?
Consequences if not handled properly?
Conflicts of Interest in the academic
community may arise in:
– Conduct of Research
– Economic Development
– Consulting and Other External Activities for
– Student Supervision
– Contract Management
Conflict of Commitment Defined
When pursuit of outside activities involves
an inordinate investment of time that
interferes with one’s obligations to
University responsibilities
Managing Conflicts of
External Activity for Pay (Consulting)
“Time” related
Generally more easily dealt with
Conflict of Interest Defined
Financial or other considerations that may
compromise (or have the appearance of
compromising) one’s objectivity or
independent professional judgment in meeting
university duties or responsibilities
Federal Requirements
Public Health Service
National Science Foundation
Both require recipients of federal research
funding to have policies and require
reporting of financial conflicts of interest
Public Health Service
All research funded by PHS must comply
with 42 C.F.R. 50.600 et seq., ensuring
that the design, conduct or reporting of
research will not be biased by conflicting
financial interests of an investigator, or the
investigator’s spouse or dependent child
Compliance Requires:
– Disclosure by Investigators of Significant
Financial Interests (SFI);
– Determination by Responsible Official as to
whether SFI results in Conflict of Interest and,
if so, how to manage, reduce or eliminate such
Conflict of Interest;
– Institution’s compliance with disclosure
obligations to PHS
Significant Financial Interest
SFI: Anything of monetary value,
including consulting fees, stock, stock
options, and IP rights
 SFI excludes:
– Phase I SBIR’s
– Income from certain non-profit activities
– Equity interests valued at less than $10K and
less than 5% ownership interest and
– Salary or other payments not exceeding $10K
per year
Disclosable Financial Interest
If SFI would reasonably appear to be
affected by the research for which funding
is sought
it is a
Disclosable Financial Interest
Managing Conflicts of Interest
Institutional responsibility to identify
– Proposal based
– Routine reports of external financial interests
Prior to expenditure of funds, notify funding
agency of COI and assure that managed,
reduced or eliminated
Updates annually and/or as circumstances
Managing Conflict (cont.)
Public Disclosure
Monitoring by Independent Reviewers
Modification of Research Plan
Publication Oversight
Strict Adherence to Data Retention
Alternate Supervision of Students
Full Disclosure to Students
NC Gen. Stat. §14-234
“No …employee who is involved in
making or administering a contract on
behalf of a public agency may derive a
direct benefit from the contract”
“Administers” = oversees performance, or
make decisions about the contract
“Direct Benefit” = >10% ownership in
other party, or derives income directly
NC Gen. Stat. §14-234 (cont.)
Even if not involved in “making or
administering” the contract, it’s illegal for
one getting direct benefit to “attempt to
influence” any other person who is
involved in making or administering the
False Claims Act (31 U.S.C. 3729 et seq.)
– Researchers who make false certifications
because of failure to disclose COI’s are
subject to liability
– University subject to liability for failure to
disclose known conflicts (See, e.g.Gelsinger v
U Penn)
– Loss of funding
More Information
Observations on Targeted Site Reviews (NIH)
American Association of Medical Colleges
NIH Review of Institutional Conflict of Interest Policies
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