Ensuring Compliance with New Financial Conflict of Interest Regulations Presents: 1 - 877-729-0959

Ensuring Compliance with New Ensuring Compliance with New Financial Conflict of Interest Financial Conflict of Interest

RegulationsRegulations

Presents:

1www.technologytransfertactics.com - 877-729-0959

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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.

Your Panel of PresentersYour Panel of Presenters

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Today’s AgendaToday’s Agenda

• 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


Significant PHS policy changesSignificant PHS policy changeseffective August 2012effective 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


New Disclosure Requirements for InvestigatorsNew Disclosure Requirements for Investigators

• Investigators must disclose to the institution their “Significant financial Interests” (SFIs) in any “Entity” if reasonably appears related to their “Institutional Responsibilities”

• SFIs include:– > $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 investigatorsNew 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)


New Disclosure Requirements for InvestigatorsNew 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


Requirements for Updating DisclosuresRequirements 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


Institutional responsibilities expandedInstitutional 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


Institutional Determination of FCOI 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.


Developing and Implementing Developing and Implementing FCOI Management PlansFCOI Management Plans

Prior to the Expenditure of Funds:

• Review SFI disclosures for relatedness and, if related, for FCOI

• 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)

• 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

• Monitor compliance with CMPs throughout life of the study


Developing and Implementing Developing and Implementing FCOI Management PlansFCOI Management Plans

In the course of a Study:• 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

• 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


Investigator Training RequirementsInvestigator Training Requirements

• 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


Public Disclosure RulesPublic 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


Impact on Academic Start-upsImpact 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


Undisclosed/Unmanaged SFIs Can Undisclosed/Unmanaged SFIs Can UnknowinglyUnknowingly

Cause Catastrophic ConsequencesCause Catastrophic Consequences

• “… 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.”


Media Coverage and its Associated Risks

Undisclosed/Unmanaged SFIs Can Undisclosed/Unmanaged SFIs Can Unknowingly Cause Catastrophic ConsequencesUnknowingly 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 federally- funded research.

Expect Increased NIH Enforcement …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.


Collateral Enforcement From OtherCollateral Enforcement From OtherGovernmental Agencies (HHS, FDA, etc.)Governmental Agencies (HHS, FDA, etc.)

• Interplay with Other Laws Applicable to Providers and/or Manufacturers– 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


Strategies For Softening The Strategies For Softening The Administrative BurdenAdministrative Burden

• Take advantage of discretion/flexibility afforded by the Regulation (e.g., defining “Institutional Responsibilities” in policy)

• Ensure close coordination among responsible departments:– 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


Universal Database of Interests

Research Sponsors & Funders Fundraising

COI Reporting Forms

Formulary Drug Manufacturers

Pharmacy and Therapeutics Committee

All Purchasing Officials

Research Support Office/Division

Board of Directors or Trustees

Universal Electronic Database of InterestsUniversal Electronic Database of Interests

Integrate Interests Identified in Diverse Functional Areas Across the Institution Into a Centralized Electronic Database

Vendors

Questions?Questions?

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your question. The panel will address them in the order they are received.

Thank You!


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Ensuring Compliance with New Financial Conflict of Interest Regulations Presents: 1 - 877-729-0959