Transcript Slide 1

Presents:
Ensuring Compliance with New
Financial Conflict of Interest
Regulations
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Your Panel of Presenters
Bernadette M. Broccolo is a partner in the law firm of McDermott Will & Emery LLP and is based in the
firm’s Chicago office. Bernadette is an expert in conflict of interest compliance and overall corporate
compliance programs. She has been counseling health industry organizations for over 32 years on leading
edge health industry relationship formation and realignments, with a recent focus on development of
provider network strategies for responding to health reform; health information technology acquisitions;
electronic health information network strategy development and implementation to support innovations in
care delivery and payment models, translational research and personalized medicine; and comprehensive
programs for human subject, animal and bench research.
Julie Gottlieb, MA is Associate Dean at the Johns Hopkins University School of Medicine and directs the
School’s Office of Policy Coordination. She coordinated a major revision of the University’s policies on
conflict of interest and professional commitment; the development of a policy on institutional conflict of
interest for the Johns Hopkins University and Health System; the development of a Johns Hopkins Medicine
policy on interaction with industry; and policy and guidelines on the use of the Johns Hopkins Medicine
name and brand. She manages the review of Johns Hopkins Health System and University relationships
with industry with respect to policies on conflict of interest and interaction with industry. Ms. Gottlieb has
been an invited speaker at national and international meetings on conflict of interest and academic
misconduct, and she has provided testimony on proposed legislation in these areas. She is a co-founder
and immediate Past Chair of the AAMC Forum on Conflict of Interest in Academe, a national network of
professionals involved in conflict of interest policy development and administration at academic medical
centers.
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Today’s Agenda
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Overview of PHS policy changes as of August 2012
New disclosure requirements for investigators
Expanded institutional responsibilities
Institutional determination, reporting and management of FCOI
Developing and implementing FCOI management plans
Investigator training requirements
Public Disclosure
Impact on academic start-ups
How undisclosed and unmanaged conflicts of interest can lead to catastrophic
consequences for institutions and investigators
Anticipating heightened government scrutiny
Strategies for softening the administrative burden
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Significant PHS policy changes
effective August 2012
• PHS regulations originally issued 1995
• Major revisions effective August 24, 2012 after 2 years of public comment
and review; apply to PHS grants and contracts
• Investigators’ disclosure obligations expanded
• Institutional responsibilities expanded
– Solicitation of investigator disclosures
– Review for “relatedness,” FCOI
– More detailed and more frequent reporting to awarding agencies both before
and during the study
– Retrospective review for late disclosure/review of FCOIs
– Public disclosure of FCOIs
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New Disclosure Requirements for Investigators
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Investigators must disclose to the institution their “Significant financial Interests”
(SFIs) in any “Entity” if reasonably appears related to their “Institutional
Responsibilities”
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SFIs include:
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> $5,000 in income during 12 months preceding disclosure
> $5,000 in value of equity interest in a publicly traded entity
any equity in a privately held entity
IP rights and interests (e.g., patents, copyrights) upon receipt of income related to
such rights and interests
– Sponsored or reimbursed travel
• When investigator is personally reimbursed or travel is purchased on his/her
behalf by an entity
• Recent clarification: institution may require disclosure only when aggregate
value of travel from an entity over 12 months > $5,000
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New disclosure requirements for investigators
• Included as “SFIs”:
– IP rights and interests (e.g., patents, copyrights) upon receipt of income
related to such rights and interests
– SFIs of spouse and dependent children
• Excluded as SFIs:
– Royalties paid by the Institution to the Investigator if the Investigator is
currently employed or otherwise appointed by the Institution (including IP
rights assigned to the Institution and agreements to share in royalties related
to such rights)
– Compensation from the institution itself
• Regulation does not address/regulate:
– Institutional conflicts of interest
– Associational interests (e.g., uncompensated fiduciary position)
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New Disclosure Requirements for Investigators
OTHER KEY DEFINITIONS:
• Investigator
– Individual responsible for “design, conduct or reporting” of PHS-supported
research
• Entity
– for profit or not-for-profit organizations
– companies, foundations, professional societies
– excludes: income from certain services provided to:
• local, state and federal U.S. government agencies
• institutions of higher education
• teaching hospitals
• affiliated research institutes
• Institutional Responsibilities
– Professional responsibilities conducted on behalf of the institution as defined in
the institution’s COI Policies
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Requirements for Updating Disclosures
• Disclosure at time of Grant Application: Require each Investigator
planning to participate in PHS/NIH-funded research to disclose SFIs to the
designated official(s) at time of application.
• Annual Updates: Require each Investigator to submit an updated
disclosure of SFI at least annually, in accordance with the specific time
period prescribed by the Institution, during the award period.
• Ongoing Updates: Require each Investigator who is participating in the
NIH-funded research to submit an updated disclosure of SFI within 30
days of discovering or acquiring (e.g., through purchase, marriage, or
inheritance) a new SFI during the award period.
• All the foregoing are applicable to Sub-recipient Investigators
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Institutional responsibilities expanded
• Have a written, enforced policy that complies with regulation
• Post policy on publicly available web site
- If no website, then in writing within 5 business days of request
• Must require sub-recipients either to adopt a PHS-compliant policy or
solicit and report SFIs to prime awardee so prime can review for
relatedness and FCOI
• Stringency standard
- If institution’s FCOI policy is more stringent than PHS regulation requires, must
report FCOIs identified under the institutional standard to PHS
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Institutional Determination of FCOI
• Review of SFIs and research for relatedness
– i.e., could the research impact the value of the SFI or entity in which SFI is held?
If yes …
• Review for FCOI
– i.e., could the SFI directly and significantly impact the design, conduct or reporting
of the research? If yes… Provide guidance to institutional official (or committee) to
determine whether SFIs are related to PHS-supported research and, if so, whether
there is a financial conflict of interest (FCOI). If yes …
• Report FCOIs to PHS awarding component
– Investigator’s role in research, nature and value of SFI, name of entity, key elements
of management plan, etc.
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Developing and Implementing
FCOI Management Plans
Prior to the Expenditure of Funds:
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Review SFI disclosures for relatedness and, if related, for FCOI
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Develop conflict management plans (CMPs) that specify the actions that have
been, and shall be, taken to manage or prohibit FCOI of Investigators (including
those of subrecipient Investigators)
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CMP must impose one or more management measures, such as:
– Public disclosure in presentations and publications, informed consent
disclosure, divestiture/limitation of the interest, independent oversight, limit
role in research, modify research plan and/or research team
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Monitor compliance with CMPs throughout life of the study
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Developing and Implementing
FCOI Management Plans
In the course of a Study:
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If an Institution identifies an SFI that was not timely disclosed or reviewed, or a
new interest is disclosed, the designated official(s) shall retrospectively review the
SFI, determine if an FCOI exists and implement an interim management plan, if
needed, within sixty (60) days
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In cases of non-compliance with a CMP, complete and document a retrospective
review to assess bias, revise plan, update FCOI and submit mitigation report if bias
is found
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Investigator Training Requirements
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Institutions must train investigators before they engage in PHS-funded research
• Every four years thereafter
• Immediately when
– Institution revises its policies or procedures
– Investigator is new to an institution
– Investigator is found to be out of compliance with policy or COI management plan
• Training must address
– Institution’s policy on FCOI
– Investigator’s disclosure responsibilities
– FCOI regulation
• Options: CITI online training, custom training
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Public Disclosure Rules
• The policy itself
• Certain FCOIs of “Senior/Key Personnel” (for grants) and “Key Personnel”
(for contracts) identified on grant application
• Updates
– At least annually
– Within 60 days of learning of new FCOIs
• Information disclosed must include:
– Investigator’s position and type and value of the interest (within ranges)
– Date as of which the information is current
• Where/How:
– Publicly available website or in writing within 5 business days of receiving a
request
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Impact on Academic Start-ups
• Startup deal financial terms typically include
– License of IP from institution to startup (payments, royalty payments to institution,
shared with inventors)
– Equity for inventors
– Consulting for inventors (may be compensated)
– Sometimes board service for inventors (may be compensated)
• IP interests derived from institution are exempt from PHS regulation, but
many institutional policies include these interests
• Research – sponsored by PHS, company, foundation, etc.
– Relatedness, FCOI tests
• Should inventor/founder participate in the research?
– Significant bias, limits on SFIs in human subject research, FDA COI rules
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Undisclosed/Unmanaged SFIs Can Unknowingly
Cause Catastrophic Consequences
Media Coverage and its Associated Risks
• “… as the volume of disclosure rises, some fear the ritual will become a
mere formality…”
• “[T]he cozy relationship between prominent academics and the drug
industry…”
• “The health institutes could place restrictions on the hospital’s grants or
even suspend them altogether.”
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Undisclosed/Unmanaged SFIs Can Unknowingly
Cause Catastrophic Consequences
•Two Pronged Attack by Senate Finance Committee
(effort to fuel enactment of Federal Sunshine legislation)
- Review of manufacturers’ records
- Cross-matching against COI disclosures made to institutions by prominent
clinicians/researchers (Harvard, Emory, University of Wisconsin)
•Chair of the Emory University psychiatry department
- Resigned after the congressional investigation determined that he failed to fully
disclose payments received from Glaxo while he was simultaneously
conducting research into Glaxo Drugs
- Barred from participation in NIH grant applications for 2 years
- Emory as large recipient of NIH grant funds undertook extensive internal
investigation that resulted in agreed-upon sanctions
- Senator wrote a letter requesting OIG of HHS to investigate Emory University
over possible violations of NIH grant rules and other laws governing federallyfunded research.
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Expect Increased NIH Enforcement …
January 2008 OIG Report: NIH Conflicts of Interest in Extramural Research
• Among the Findings:
- NIH is not aware of the types of financial conflicts of interest that exist within
grantee institutions because details are not required to be reported and most
conflict-of-interest reports do not state the nature of the conflict.
Among the Recommendations:
- Increase oversight of grantee Institutions to ensure compliance with Federal
financial COI regulations
- Require grantee Institutions to provide details regarding the nature of COI and its
management
- Require NIH to maintain all COI from the grantee Institutions in a database
• Federal and State “Sunshine Laws” make information on financial interests
and relationships readily available to NIH to supplement and validate COI
disclosures under new regulations.
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Collateral Enforcement From Other
Governmental Agencies (HHS, FDA, etc.)
• Interplay with Other Laws Applicable to Providers and/or Manufacturers
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Medicare Anti-Kickback Law
Stark Law
False Claims Act
Federal Food, Drug and Cosmetic Act and FDA regulations concerning labeling,
promotion and advertising
– Medicaid “best price” requirements
– Prescription Drug Marketing Act (PDMA) (samples)
– State laws
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Strategies For Softening The
Administrative Burden
• Take advantage of discretion/flexibility afforded by the Regulation
(e.g., defining “Institutional Responsibilities” in policy)
• Ensure close coordination among responsible departments:
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Sponsored projects office
IRB
Technology transfer office
Conflict of interest office (research and non-research)
Compliance office
• Electronic disclosure lightens burden for investigators and can improve
accuracy and completeness of the information provided
• Shared/centralized electronic databases of interests helps
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Universal Electronic Database of Interests
Integrate Interests Identified in Diverse Functional Areas Across the
Institution Into a Centralized Electronic Database
Board of Directors or Trustees
Vendors
Research Sponsors &
Funders
COI Reporting
Forms
Fundraising
Universal Database of
Interests
Pharmacy and
Therapeutics
Committee
Formulary Drug
Manufacturers
Research Support
Office/Division
All Purchasing Officials
Questions?
Utilize the public chat
at the bottom left of your screen to submit
your question. The panel will address them in
the order they are received.
Thank You!
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