CONFLICTS OF INTEREST: RECOGNITION AND MANAGEMENT

1. CONFLICTS OF INTEREST: RECOGNITION AND MANAGEMENT Judith L. Curry Associate General Counsel NC State University January 20, 2011

2. Introduction • What are Conflicts of Interest and Conflicts of Commitment? • Why should you be concerned? • Consequences if not handled properly?

3. 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

4. Conflict of Commitment Defined • When pursuit of outside activities involves an inordinate investment of time that interferes with one’s obligations to University responsibilities

5. Managing Conflicts of Commitment • External Activity for Pay (Consulting) Review http://www.ncsu.edu/sparcs/coi/ • “Time” related • Generally more easily dealt with

6. 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

7. 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

8. 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

9. Compliance 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

10. 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

11. 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 http://www.ncsu.edu/sparcs/coi/index.php

12. 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 change

13. 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

14. 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

15. 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 contract

16. OTHER CONSEQUENCES • 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

17. More 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 Policies http://grants.nih.gov/grants/policy/coi/nih_review.htm