Financial Conflict of Interest June 2011 NIH Regional Seminar

2 Financial Conflict of Interest (FCOI) Regulations 42 CFR Part 50 Subpart F (grants and cooperative agreements) 42 CFR Part 50 Subpart F (grants and cooperative agreements) 45 CFR Part 94 (contracts) 45 CFR Part 94 (contracts) These regulations went into effect on October 1, 1995

3 What is the Purpose of the Regulation? This regulation is aimed at ensuring that the design, conduct, or reporting of research funded under NIH grants and cooperative agreements will not be biased by any conflicting financial interest of the Investigators responsible for the research. This regulation is aimed at ensuring that the design, conduct, or reporting of research funded under NIH grants and cooperative agreements will not be biased by any conflicting financial interest of the Investigators responsible for the research.

4 Objectivity in Research Maintaining objectivity in researchMaintaining objectivity in research Preserves the public trustPreserves the public trust IntegrityIntegrity Institution Institution Investigator Investigator Data Data NIH NIH TransparencyTransparency

The Regulation Compliance (including accurate & timely reporting) Institutional Policy ImplementationManagementOversight Institution DisclosureCompliance Investigator Oversight Education & Outreach NIH

Who is Covered? Each Institution that applies for NIH grants or cooperative agreements for research Each Institution that applies for NIH grants or cooperative agreements for research Domestic, foreign, public, private (not Federal)Domestic, foreign, public, private (not Federal) Any Investigator, as defined by the regulation, participating in the research Any Investigator, as defined by the regulation, participating in the research SBIR/STTR Phase I applications are exempt (current regulation) SBIR/STTR Phase I applications are exempt (current regulation) 6

7 What is an FCOI? A significant financial interest that could directly and significantly affect the design, conduct, or reporting of NIH funded research

Institutional Responsibilities Institutions must establish standards to ensure there is no reasonable expectation that the design, conduct, or reporting of NIH funded research is biased by a conflicting financial interest of an Investigator

9 Institutional Responsibilities Maintain a written, enforced policy that complies with the regulationMaintain a written, enforced policy that complies with the regulation Inform Investigators of the policy, the regulation, and their reporting responsibilitiesInform Investigators of the policy, the regulation, and their reporting responsibilities Establish enforcement mechanisms and provide for sanctions where appropriateEstablish enforcement mechanisms and provide for sanctions where appropriate Maintain records for at least three years from date of submission of final expenditures reportMaintain records for at least three years from date of submission of final expenditures report

10 Institutional Responsibilities Designate an Institutional Official to solicit & review disclosure statement from each Investigator planning to participate in NIH-funded research Provide guidelines to identify conflicting interests related to proposed or NIH-funded research Take action to ensure they are managed, reduced, or eliminated By the time an application is submitted, assure that the Institutional Official has received a financial disclosure statement from each Investigator who is planning to participate in the NIH-funded research.

11 Institutional Responsibilities If NIH-funded research is performed through “subgrantees, contractors, or collaborators,” [aka subrecipients] the grantee Institution must take reasonable steps to ensure compliance by either requiring: If NIH-funded research is performed through “subgrantees, contractors, or collaborators,” [aka subrecipients] the grantee Institution must take reasonable steps to ensure compliance by either requiring: Subrecipient Investigators to comply with the Institution’s policy ORSubrecipient Investigators to comply with the Institution’s policy OR Subrecipient Institutions to provide assurances to the grantee Institution that will enable it to complySubrecipient Institutions to provide assurances to the grantee Institution that will enable it to comply Subrecipients should report identified FCOIs to the grantee Institution. Grantee Institution reports to NIH.

12 Institutional Responsibilities Certify in each application for funding: Certify in each application for funding: There is in effect a written and enforced administrative process to identify and manage, reduce or eliminate conflicting interestsThere is in effect a written and enforced administrative process to identify and manage, reduce or eliminate conflicting interests Report existence of an FCOI prior to expenditure of funds under an award and within 60 days of identification of a new conflicting interestReport existence of an FCOI prior to expenditure of funds under an award and within 60 days of identification of a new conflicting interest Agree to make information available upon request regarding all conflicting interests identified by the Institution and how those interests have been managed, reduced, or eliminated.Agree to make information available upon request regarding all conflicting interests identified by the Institution and how those interests have been managed, reduced, or eliminated.

13 Institutional Responsibilities Reports of an identified Financial Conflict of Interest include: grant and/or contract number, PD/PI or contact PD/PI, name of Investigator with the FCOI, and an indication whether the conflict has been managed, reduced or eliminated. For grants, all FCOI reports must be submitted through the eRA Commons FCOI Module. For contracts, reports should be sent to the appropriate Director, Office of Acquisitions.Director, Office of Acquisitions

14 Institutional Responsibilities eRA Commons – FCOI Module eRA Commons – FCOI Module Enables grantees to report identified FCOIs to NIH through the eRA CommonsEnables grantees to report identified FCOIs to NIH through the eRA Commons Mandatory use began 7/1/09Mandatory use began 7/1/09 NIH Guide Notice: NOT-OD files/NOT-OD html NIH Guide Notice: NOT-OD files/NOT-OD html files/NOT-OD html files/NOT-OD html

15 eRA Commons FCOI Module/reporting tool System allows institutions to: System allows institutions to: Initiate and send a new FCOI report electronically through the eRA CommonsInitiate and send a new FCOI report electronically through the eRA Commons Search previously created recordsSearch previously created records Edit a previously submitted recordEdit a previously submitted record Respond to a request for additional informationRespond to a request for additional information Rescind a previously submitted recordRescind a previously submitted record View history of actionsView history of actions To prepare, institutional Signing Officials must assign FCOI roles to users in eRA Commons. To prepare, institutional Signing Officials must assign FCOI roles to users in eRA Commons. More information on the FCOI Module can be found at More information on the FCOI Module can be found at

Summary of FCOI Reporting Requirements At the time of application: Investigators must submit known significant financial interests to the Institution Prior to the expenditure of funds: The Institution must report an identified financial conflict of interest to the NIH and assure that it has been managed, reduced, or eliminated FCOI identified after the initial report: The Institution must report to the NIH within 60 days of identification and assure that it has been managed, reduced, or eliminated.

17 Definition of Investigator The Principal Investigator (PI) AND any other person who is responsible for the design, conduct, or reporting of NIH-funded research, or proposed for such funding The Principal Investigator (PI) AND any other person who is responsible for the design, conduct, or reporting of NIH-funded research, or proposed for such funding Includes Investigator’s spouse and dependent children Includes Investigator’s spouse and dependent children

18 Investigator Responsibilities Submit financial disclosure statements which is a listing of Significant Financial Interests that would reasonably appear to be affected by the research for which you are seeking funding, and in entities whose financial interests would reasonably appear to be affected by the research Comply with all Institutional requirements

19 Significant Financial Interest Anything of monetary value, including but not limited to: Anything of monetary value, including but not limited to: Salary or other payments for services (e.g., consulting fees or honoraria)Salary or other payments for services (e.g., consulting fees or honoraria) Equity interests (e.g., stocks, stock options or other ownership interests)Equity interests (e.g., stocks, stock options or other ownership interests) Intellectual property rights (e.g., patents, copyrights and royalties from such rights)Intellectual property rights (e.g., patents, copyrights and royalties from such rights)

Salary, royalties, or other remuneration from the applicant Institution Ownership interests in the Institution, if the Institution is an applicant under the SBIR program Income from seminars, lectures, or teaching engagements sponsored by public or non-profit entities Income from service on advisory committees or review panels for public or non-profits entities Salary, royalties, or other payments that when aggregated for the Investigator and the Investigator’s spouse and dependent children over the next 12 months are not expected to exceed $10,000 Significant Financial Interest Exclusions

21 Significant Financial Interest Exclusions An equity interest that when aggregated for the Investigator and the Investigator’s spouse and dependent children meets both of the following tests: An equity interest that when aggregated for the Investigator and the Investigator’s spouse and dependent children meets both of the following tests: Does not exceed $10,000 in value as determined through reference to public prices or other reasonable measures of fair market value ANDDoes not exceed $10,000 in value as determined through reference to public prices or other reasonable measures of fair market value AND Does not represent more than a 5% ownership interest in any single entityDoes not represent more than a 5% ownership interest in any single entity

22 SFI vs. FCOI A Significant Financial Interest (SFI) is not always an FCOI An FCOI exists when a designated Institutional official reasonably determines that an SFI could directly and significantly affect the design, conduct, or reporting of the NIH-funded research Institution must consider whether an SFI is related to the NIH-funded research

23 NIH Responsibilities NIH may request information regarding all conflicting interests identified by the Institutions and how those interests have been managed, reduced, or eliminated to protect research from bias. If the failure of an Investigator to comply with the Institution’s conflict of interest policy has biased the design, conduct, or reporting of the NIH-funded research, the Institution must promptly notify NIH of the corrective action taken or to be taken. NIH will consider the situation and, as necessary, take appropriate action, or refer the matter to the Institution for further action, which may include directions to the Institution on how to maintain appropriate objectivity in the funded project.

24 NIH Responsibilities NIH may at any time inquire into the Institutional procedures and actions regarding conflicting financial interests in NIH-funded research, including a requirement for submission of, or review on site, all records pertinent to compliance. NIH may decide that further corrective action is needed or that the Institution has not managed, reduced, or eliminated the conflict in accordance with requirements. If necessary, NIH may suspend funding until the matter is resolved.

25 NIH Responsibilities In any case in which an NIH-funded clinical research project whose purpose is to evaluate the safety or effectiveness of a drug, medical device, or treatment has been designed, conducted, or reported by an Investigator with a conflicting interest that was not disclosed or managed in accordance with the regulation, the Institution must require the Investigator(s) involved to disclose the conflicting interest in each public presentation of the results of the research

Recent Environment Since the existing rules were promulgated in 1995: Since the existing rules were promulgated in 1995: biomedical and behavioral research has grown in complexitybiomedical and behavioral research has grown in complexity interactions among Government, research institutions, and the private sector have increasedinteractions among Government, research institutions, and the private sector have increased public scrutiny has grownpublic scrutiny has grown All these factors have raised the question whether a more rigorous approach is required All these factors have raised the question whether a more rigorous approach is required 26

27 Advanced Notice of Proposed Rulemaking (ANPRM) “NIH Requests Comments on Proposed Amendment of Regulations on the Responsibility of Applicants for Promoting Objectivity in Research for which Public Health Service Funding is Sought and Responsible Prospective Contractors” – “NIH Requests Comments on Proposed Amendment of Regulations on the Responsibility of Applicants for Promoting Objectivity in Research for which Public Health Service Funding is Sought and Responsible Prospective Contractors” – Published May 8, 2009 in the NIH Guide to Grants and Contracts: NOT-OD Published May 8, 2009 in the NIH Guide to Grants and Contracts: NOT-OD Federal Register (Vol. 74, No. 88) May 8, 2009 Federal Register (Vol. 74, No. 88) May 8, day comment period – closed July 7, day comment period – closed July 7, comments received and considered78 comments received and considered All comments are posted at: tDetail?R=NIH All comments are posted at: tDetail?R=NIH tDetail?R=NIH tDetail?R=NIH

28 Advanced Notice of Proposed Rulemaking (ANPRM) Asked for comment on various topics including: Asked for comment on various topics including: Expanding the scope of regulation and disclosure of interests;Expanding the scope of regulation and disclosure of interests; Definition of “Significant Financial Interest”;Definition of “Significant Financial Interest”; Identification and management of conflicting interests by institutions;Identification and management of conflicting interests by institutions; Assuring institutional compliance;Assuring institutional compliance; Requiring institutions to provide additional information;Requiring institutions to provide additional information; Broadening the regulations to address institutional conflict of interestBroadening the regulations to address institutional conflict of interest

29 ANPRM response Several professional societies (e.g. AAU/AAMC) and institutions that conduct research provided comments. All the questions raised in the ANPRM were addressed in the comments. Many of the comments addressed the definition of Significant Financial Interest and what information should be provided to the funding agency.

30 Notice of Proposed Rulemaking (NPRM) NIH carefully considered and analyzed comments submitted in response to the ANPRM and on behalf of the Department of Health and Human Services and the Public Health Service prepared an NPRM which proposes changes to the regulations NIH carefully considered and analyzed comments submitted in response to the ANPRM and on behalf of the Department of Health and Human Services and the Public Health Service prepared an NPRM which proposes changes to the regulations The NPRM was published in the Federal Register on May 21, 2010 for Public Comment initially until July 20, 2010 The NPRM was published in the Federal Register on May 21, 2010 for Public Comment initially until July 20, 2010 NIH solicited comments on all aspects of the NPRM; in addition, preamble highlights certain topics for which comments were specifically solicited, e.g., definitions (SFI, “institutional responsibilities”), public disclosure requirement; elements of FCOI reports, Institutional conflict of interest policy requirement. NIH solicited comments on all aspects of the NPRM; in addition, preamble highlights certain topics for which comments were specifically solicited, e.g., definitions (SFI, “institutional responsibilities”), public disclosure requirement; elements of FCOI reports, Institutional conflict of interest policy requirement.

Notice of Proposed Rulemaking (NPRM) Supplemental Notice published on July 21, 2010 for public comment by August 19, 2010 Supplemental Notice published on July 21, 2010 for public comment by August 19, 2010 HHS developed a proposed Final Rule HHS developed a proposed Final Rule Next Steps – Next Steps – Obtain clearance of Final RuleObtain clearance of Final Rule Publish Final RulePublish Final Rule 31

Notice of Proposed Rulemaking (NPRM) Comments can be read at eRulemaking.gov Portal: using Docket Number: NIH or see notices for further submission options and instructions Comments can be read at eRulemaking.gov Portal: using Docket Number: NIH or see notices for further submission options and instructionshttp:// for questions about the proposed rule – NO COMMENTS PLEASE for questions about the proposed rule – NO COMMENTS PLEASE See NIH Guide to Grants and Contracts (NOT-OD ), at files/NOT-OD html See NIH Guide to Grants and Contracts (NOT-OD ), at files/NOT-OD html files/NOT-OD html files/NOT-OD html See NIH Guide to Grants and Contracts (NOT-OD ), at files/NOT-OD html See NIH Guide to Grants and Contracts (NOT-OD ), at files/NOT-OD htmlhttp://grants.nih.gov/grants/guide/notice- files/NOT-OD htmlhttp://grants.nih.gov/grants/guide/notice- files/NOT-OD html 32

Major proposed changes to the regulations Significant Financial Interest (SFI) definition Significant Financial Interest (SFI) definitionCURRENT: -De minimis threshold of $10,000 for disclosure generally applies to payments or equity interests over the next 12 months -Exclusions include income from seminars, lectures, or teaching, and service on advisory committees or review panels, for public or nonprofit entities PROPOSED: -De minimis threshold of $5,000 for disclosure generally applies to payments and/or equity interests 12 months preceding the disclosure and the value of any equity interest as of the date of disclosure -Includes any equity interest in non-publicly traded entities -Exclusions include income from seminars, lectures, or teaching, and service on advisory or review panels, for government agencies or institutions of higher education 33

34 Major proposed changes to the regulations (cont.) Investigator disclosure requirements Investigator disclosure requirementsCURRENT: -Only SFIs related to PHS-funded research as determined by the Investigator PROPOSED: -SFIs include financial interests that are related to an Investigator’s institutional responsibilities -Institutions responsible for determining whether SFI relates to PHS-funded research and is a FCOI

Major proposed changes to the regulations (cont.) Public disclosure Public disclosureCURRENT: -No requirement PROPOSED: -Make FCOI policy available via a publically assessable web site -Before spending funds for PHS-supported research, an Institution shall post on a publicly accessible web site information on certain SFIs that the Institution determines are related to the PHS-funded research and are FCOI ( $250K) 35

Major proposed changes to the regulations (cont.) Management of an identified FCOI by the InstitutionManagement of an identified FCOI by the InstitutionCURRENT: - Manner of compliance with regulation not specified (manage, reduce or eliminate are indicated as options) PROPOSED: - For all identified FCOI, Institutions must develop and implement a management plan (may include reduction or elimination of the SFI) 36

Major proposed changes to the regulations (cont.) Management of an identified FCOI by the Institution (cont.) Management of an identified FCOI by the Institution (cont.) − Key elements of the Institution’s management plan The role and function of the conflicted Investigator in the research project The role and function of the conflicted Investigator in the research project The rationale for including the conflicted Investigator in the research project The rationale for including the conflicted Investigator in the research project The conditions of the management plan The conditions of the management plan How the management plan will safeguard objectivity in the research project How the management plan will safeguard objectivity in the research project Confirmation of the Investigator’s agreement to the management plan Confirmation of the Investigator’s agreement to the management plan How the management plan will be monitored to ensure Investigator compliance How the management plan will be monitored to ensure Investigator compliance Other information as needed Other information as needed 37

Major proposed changes to the regulations (cont.) Management of an identified FCOI by the Institution (cont.) Management of an identified FCOI by the Institution (cont.)CURRENT: -No requirement PROPOSED: −If FCOI is one that was not disclosed or reviewed in a timely manner, the Institution must also implement a mitigation plan which shall include review and determination as to whether any PHS-funded research conducted prior to identification and management of the FCOI was biased 38

Major proposed changes to the regulations (cont.) Information on an identified FCOI reported by the Institution to PHS Awarding Component Information on an identified FCOI reported by the Institution to PHS Awarding ComponentCURRENT: -Grant/Contract number -Project Director/Principal Investigator (PD/PI) or Contact PD/PI -Name of Investigator with FCOI -Whether FCOI was managed, reduced, or eliminated PROPOSED: -Current requirements, plus: -Value of the financial interest $0-4,999;$5K-9,999; $10K-19,999; amounts between $20K-$100K by increments of $20K or statement that a value cannot be readily determined -Nature of FCOI, e.g., equity, consulting fees, travel reimbursements, honoraria, and description of how FCOI relates to PHS-funded research -Key elements of the Institution’s management plan 39

Major proposed changes to the regulations (cont.) Timing of reporting of an identified FCOI to the PHS Awarding Component Timing of reporting of an identified FCOI to the PHS Awarding ComponentCURRENT: -Prior to the Institution's expenditure of any funds under the award -Within 60 days for any interest that the Institution identifies as conflicting subsequent to the Institution's initial report under the award PROPOSED: -Current requirements, plus annual updates on any previously-identified FCOI for the duration of the research project 40

41 Major proposed changes to the regulations (cont.) Scope of the regulation Scope of the regulationCURRENT: -Does not cover Small Business Innovation Research/Small Business Technology Transfer Research (SBIR/STTR) Phase I applications PROPOSED: -Includes SBIR/STTR Phase I applications

42 Major proposed changes to the regulations (cont.) Clarification of subrecipient requirements Clarification of subrecipient requirementsCURRENT: -Institutions must take reasonable steps to ensure that Investigators working for subrecipients comply with the regulation PROPOSED: -Clarifies by requiring the Institution to incorporate language as part of a written agreement with the subrecipient terms that establish whether the FCOI policy of the awardee Institution or that of the subrecipient will apply to the subrecipient’s Investigators

Major proposed changes to the regulations (cont.) Investigator training Investigator trainingCURRENT: -No requirement PROPOSED: -FCOI training required for Investigators before engaging in PHS-funded research, and every two years thereafter 43

Major proposed changes to the regulations (cont.) HHS authority to inquire about FCOI HHS authority to inquire about FCOICURRENT: -The HHS may at any time inquire into the Institutional procedures and actions regarding conflicting financial interests in PHS-funded research PROPOSED: -Clarifies that HHS authority applies before, during, or after an award with regard to any Investigator disclosure of financial interests, whether or not the disclosure resulted in the Institution’s determination of a FCOI 44

45 Information OER FCOI Web Site OER FCOI Web Site Mailbox for inquiries Mailbox for inquiries Mailbox for inquiries about the NPRM Mailbox for inquiries about the NPRM

46 Questions? Diane Dean Director Division of Grants Compliance and Oversight, OPERA/OER Kathy Hancock Assistant Grants Compliance Officer, Division of Grants Compliance and Oversight, OPERA/OER