1. Managing Conflicts of Interest
10/16/2008
Managing Conflicts of Interest
Presentation to Rensselaer’s 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

2. Overview What is a Conflict of Interest?
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Overview
What is a Conflict of Interest?
What is a Conflict of Commitment?
How does a college or university manage or eliminate these conflicts?
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3. What is a Conflict of Interest?
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What is a Conflict of Interest?
A potential conflict exists when there is a possibility that an individual’s outside financial interests could directly and significantly affect the individual’s professional actions or decisions.
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4. Where can a Conflict of Interest occur?
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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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5. What is a Conflict of Interest in Research?
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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 individual’s 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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6. Sources of Law Federal:
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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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7. Essential Requirement #1
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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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8. Goals of a Conflict of Interest Policy
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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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9. Conflict of Interest Policy
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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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10. Conflict of Interest Policy – Basic terms
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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
Create the conflict management plans
Manage the plan
Enforce the plan
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11. Essential Requirement #2
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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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12. How are Conflicts Disclosed at Rensselaer?
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How are Conflicts Disclosed at Rensselaer?
Annual Survey from HR
Project Information Form (PIF)
Human Subjects Protocols
Intellectual Property Processes (disclosure, patenting, licensing)
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13. 10/16/2008

14. Essential Requirement #3
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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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15. Emory U. Psychiatrist Failed to Report Income From Drug Makers
October 4, 2008
Emory U. Psychiatrist Failed to Report Income From Drug Makers
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's Payments
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 project’s former leader, according to Ron Sauder, vice president for communications and marketing at Emory.
10/16/2008

16. Basics of Conflict Management
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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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17. Individual Conflict Management Plans – Basic Terms
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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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18. Individual Conflict Management Plans – Basic Terms (cont.)
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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 professor’s 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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19. Individual Conflict Management Plans – Basic Terms (cont.)
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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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20. What is a Conflict of Commitment?
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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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21. What can cause a Conflict of Commitment?
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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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22. What can we expect? Greater focus by government
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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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23. Significant conflict of interest?
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