Managing Conflicts of

Interest
Presentation to Rensselaers Large Business
Managers Group
By
Jeffrey Armstrong
Whiteman Osterman & Hanna, LLP (Office of the
General Counsel)
&
Frank J. DiSanto
Research Administration & Finance
10/16/2008

Overview
- What is a Conflict of Interest?
- What is a Conflict of Commitment?
- How does a college or university
manage or eliminate these
conflicts?

10/16/2008

What is a Conflict of
Interest?
A potential conflict exists when there
is a possibility that an individuals
outside financial interests could
directly and significantly affect the
individuals professional actions or
decisions.

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Where can a Conflict of

Interest occur?
- Purchasing and other business
relationships
- Gifts
- Employment
- Research
- Technology licensing
- Activities of family members

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What is a Conflict of Interest

in Research?
In the sponsored research setting, a potential
conflict exists when there is a possibility that
an individuals outside financial interests
could directly and significantly affect the
design, conduct, or reporting of the research.
Under federal law, a financial interest is
significant if:
it amounts to more than $10,000 per year in
outside income; or
involves equity either worth more than $10,000 or
equity representing more than 5% of the
outstanding equity in a company.
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Sources of Law
Federal:
- National Science Foundation -Investigator
Financial Disclosure Policy
- National Institutes of Health Objectivity in
Research
- Other federal agencies required FAR clauses
imposing conflict of
interest rules

State:
- Contractual clauses in grant and other awards

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Essential Requirement
#1
All conflict of interest laws require
adoption of institutional procedures
that require faculty and staff to
disclose to the institution outside
financial interests above specified
thresholds when those interests
would likely be affected by the
research.

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Goals of a Conflict of
Interest Policy
Protect research participants
Protect the integrity of the research
Protect the institution, faculty,
students
Funding Status
Litigation
Reputation/Public Image
Reconsideration & Noncompliance
Good Policy Practices
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Conflict of Interest Policy

- May be more than one policy
- Trustees
- Officers
- Employees
- Faculty
- Research policy
- Institutional Conflict of Interest
- Typical Scenario: Institution has a financial
interest in a technology/company/invention
and the research is conducted at that
institution
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Conflict of Interest Policy

Basic terms
Definitions:

including what is a Significant Financial

Interest which must be reported

Disclosures:
-

periodic (usually annual) disclosures

ad hoc disclosures when potential conflicts
arise

Responsible Individuals:
-

Who are the responsible individuals who

will
(i) Receive and review the disclosures
(ii)Create the conflict management plans
(iii)Manage the plan
(iv)Enforce the plan

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Essential Requirement
#2
The institution must review the
disclosures, determine whether
there is a conflict, and, if so,
manage, reduce, or eliminate it,
before funds are expended.

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How are Conflicts Disclosed

at Rensselaer?
1.
2.
3.
4.

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Annual Survey from HR

Project Information Form (PIF)
Human Subjects Protocols
Intellectual Property Processes
(disclosure, patenting, licensing)

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Essential Requirement
#3
The institution must disclose and/or
otherwise notify the sponsoring
agency of the nature of the conflict
or the action taken to manage,
reduce, or eliminate it.

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October 4, 2008
Emory U. Psychiatrist Failed to Report Income From
DrugMakers
A prominent psychiatrist at Emory University is the latest researcher
to come under fire in Congress for violating federal and university
rules against financial conflicts of interest.
The New York Times reports that Charles B. Nemeroff, chairman of
the psychiatry department at Emory and former editor in chief of the
journal Neuropsychopharmacology, earned more than $2.8-million for
consulting with drug companies from 2000 to 2007 and hid much of
that income from his university.
October 14, 2008
NIH Halts Study at Emory Over Concerns About Drug
Company'sPayments
The National Institutes of Health has halted a $9.3-million five-year
research project at Emory University, pending an investigation into
potential conflicts of interest by the projects former leader, according
to Ron Sauder, vice president for communications and marketing at
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Emory.

Basics of Conflict
Management
- Adopt an Institution-wide Conflict of
Interest Policy
- Establish training
- Establish a disclosure procedure
- When the Institution learns of a
conflict, adopt specific plans to
manage or eliminate it
- Establish processes to ensure that
the management plans are enforced
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Individual Conflict
Management Plans Basic
Terms

- Summary of Conflict

- Set forth facts which describe the conflict

- Address management of primary conflict

- Is a particular business contract or project

allowed or prohibited
- If allowed, appoint a disinterested person to
directly oversee the relationship or the
project
- Make sure that the conduct of the project is
reported to supervisors
- Establish rules for use of resources, such as
facilities, students or staff (e.g. prohibit dual
employment of students or staff, use of
university facilities by outside companies
without permission, etc.)

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Individual Conflict
Management Plans Basic
Terms (cont.)

- Consider and manage effects on other projects

- Aside from primary transaction in which conflict
exists, manage other projects that the conflict could
affect (e.g. technology license to a professors start
up company might affect other research projects
involving similar work, etc.)

- Responsible Individuals

- Establish persons who will be responsible to

supervise the conflict management
- Establish an appeal process to resolve disputes

Transparency

Set forth procedures to ensure that change in facts will

always be reported
- Require fact that potential conflict exists to be
disclosed to all who might otherwise be misled (e.g.
in publications, etc.)

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Individual Conflict
Management Plans Basic
Terms (cont.)

- Follow-Up

- Establish a regular process of ensuring

that the conflict management plan is
being adhered to

- Consequences
- Be clear in the plan about the possible
penalties for noncompliance

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What is a Conflict of
Commitment?
A conflict of commitment exists when
the commitment to external
activities of a faculty or staff
member adversely affects his or her
capacity to meet their job
responsibilities.

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What can cause a Conflict of

Commitment?
- External consulting by faculty or staff
- Being over committed on sponsored
projects
- Outside teaching
- Officer or Director in outside organizations,
including churches and nonprofit
organizations
- Start Up or other entrepreneurial
businesses
- Note: A conflict of commitment often exists
alongside of a conflict of interest and both may
need to be addressed at the same time.
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What can we expect?

-

Greater focus by government

Continued focus by the press
Audits
OIG involvement
Legal action?

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Significant conflict of
interest?

10/16/2008