conflicts of interest: recognition and management

CONFLICTS OF INTEREST: CONFLICTS OF INTEREST: RECOGNITION AND RECOGNITION AND

MANAGEMENTMANAGEMENT

Judith L. CurryAssociate General Counsel

NC State University

January 20, 2011

Introduction Introduction What are Conflicts of Interest and

Conflicts of Commitment?

Why should you be concerned?

Consequences if not handled properly?

Overview Overview Conflicts of Interest in the academic

community may arise in:– Conduct of Research– Economic Development – Consulting and Other External Activities for

Pay http://www.ncsu.edu/general_counsel/legal_topics/consulting-faqs.php

– Student Supervision– Contract Management

Conflict of Commitment Conflict of Commitment DefinedDefinedWhen pursuit of outside activities involves

an inordinate investment of time that interferes with one’s obligations to University responsibilities

Managing Conflicts of Managing Conflicts of CommitmentCommitment

External Activity for Pay (Consulting) Review http://www.ncsu.edu/sparcs/coi/

“Time” related

Generally more easily dealt with

Conflict of Interest DefinedConflict 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 RequirementsFederal RequirementsPublic 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 ServicePublic Health ServiceAll 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

ComplianceCompliance

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 InterestSignificant Financial InterestSFI: 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 InterestDisclosable Financial InterestIf SFI would reasonably appear to be

affected by the research for which funding is sought

it is a

Disclosable Financial Interest http://www.ncsu.edu/sparcs/coi/index.php

Managing Conflicts of InterestManaging Conflicts of InterestInstitutional 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 change

Managing Conflict (cont.)Managing Conflict (cont.)Public DisclosureMonitoring by Independent ReviewersModification of Research PlanPublication OversightStrict Adherence to Data Retention Alternate Supervision of StudentsFull Disclosure to Students

NC Gen. Stat. NC Gen. Stat. §§14-234 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. NC Gen. Stat. §§14-234 (cont.)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 contract

OTHER CONSEQUENCESOTHER CONSEQUENCESFalse 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 InformationMore Information

Observations on Targeted Site Reviews (NIH) http://grants.nih.gov/grants/policy/coi/index.htm

American Association of Medical Colleges http://www.aamc.org/research/dbr/coi.htm#questions

NIH Review of Institutional Conflict of Interest Policieshttp://grants.nih.gov/grants/policy/coi/nih_review.htm