Key finance question: Is relationship covered?
By J. Mark Waxman, JD
General Counsel
CareGroup Healthcare System, Boston
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As you already are aware, last December, the Washington, DC-based Association of American Medical Colleges (AAMC) issued the first of its two-part model addressing policies and guidelines to be used as baseline standards for the oversight of financial interests in research. The first installment addresses the interests of faculty, employees, students, and staff. The second, due later in 2002, will address constitutional financial interests. The AAMC guidelines target relationships where covered individuals have a significant financial interest. A covered individual is one who conducts research involving human subjects. This includes any faculty, whether or not salaried, or faculty agent. Faculty agents can be further defined to include staff, students, fellows, trainees, or administrators. Conducting research is defined broadly to encompass not only the direct process of research as defined in an approved protocol, but also enrolling subjects in research, or even submitting manuscripts concerning the research for publication.
Know the key definitions
Significant financial interests generally mean any "entitlements to payments in connection with the research not directly related to the reasonable costs of the research [as specified in the research agreement between the sponsor and the institution]." This includes service as an officer, director, or any other fiduciary role for a commercial entity which itself has a financial interest in the research, whether that position is paid or not.
In defining these interests, a series of specific categories are set forth as examples of relationships that are and are not covered. Among the covered relationships are:
• Consulting fees.
Fees include honoraria, either directly or indirectly from an interested commercial interest, gifts or "in-kind compensation." The definition encompasses a wide variety of activities which are within the scope of this example — lectures, service or an advisory board, or consulting. A specific limitation is that to be considered significant or purposes of the AAMC, the "de minimus" threshold established in existing law (U.S. Public Health Service regulations currently establish $10,000) must be exceeded within a calendar year or are expected to exceed that amount in the next 12 months. (Why the guidelines did not make the exception threshold applicable to any 12-month period is unknown).
• Private equity interests.
This includes the right to such an interest whether by stock option or otherwise of any amount in a nonpublicly traded interested company.
• Public equity interests.
Included is the right to such an interest in a publicly traded company. As in the private interests, it must exceed a de minimus amount. Whether this is to be an aggregate number that once crossed forever meets the standard or can be later mitigated or eliminated does not appear to be addressed.
• Royalty issues.
Royalties also include future royalty rights where the research is directly related to the licensed technology or work. There does not appear to be any de minimus threshold that must be exceeded. Similarly included would be any bonus or milestone payments in excess of costs incurred either from an interested company or from the institution.
A number of reasonable exceptions also have been created. Reminiscent of the fraud and abuse type exceptions in federal law, they include interests in publicly traded companies that meet the de minimus criteria of the federal law. Also included is any interest in a mutual fund, payments directly related to the reasonable costs of the research, and salary or other payments for services from the institution. Stock options in public companies are to be valued and treated in the same fashion as stocks themselves.
The core policies
The core policies consist of a series of guidelines designed to be "baseline standards and practices" — minimums for institutions to adopt with such additional restrictions as they deem appropriate. The goal of these policies is to ensure protection of human subjects (the "foremost concern") and foster an environment where scientific integrity is maintained. As a result, the guiding principle is that a presumption exists to reject any significant financial interest in human subjects research absent "compelling circumstances."
What might be compelling circumstances is not defined by a "bright line" test. Instead, there should be a facts-and-circumstances balancing of relevant factors measuring the risks and benefits of involvement. The factors to be considered are:
- the nature of the science;
- how closely the interest is related to the research;
- the degree to which the interest may be affected by the research.
Two extremes are given as illustrative examples. If there is a direct relationship between value and affect — equity is a start-up company developing an investigational drug — the presumption against involvement will be at its strongest. If the research is so unique and the value or potential benefits to patient welfare are such that the benefits would not be achieved as safely and effectively without the individual in question, the presumption may be more capable of being overcome with appropriate independent controls.
In any event, to operate under the presumption and meaningfully adjudicate the issues will require full and complete disclosure and reporting. As a result, the report mandates prior and continuing reporting prior to final IRB approval of research and as and when the relevant facts may change.
The conflict-of-interest committee
To effectively implement the policies, the report recommends a standing conflict-of-interest committee (COI) be created. The COI members can then ensure the policies are documented and properly implemented. The COI also would be responsible for establishing its terms and conditions, independent of the IRB, under which parties with significant financial interests would be permitted to conduct human subject research. It would be responsible for creating and educating all the relevant constituencies about the COI policies that should be in writing and widely disseminated.
Hopes for collaboration
The task force concluded that its guidelines "recommend policies that will strengthen the protection of human subjects while enabling the robust, productive collaboration between industry and academic medicine" successful in the past. It is of note, however, that one industry member representative on the task force declined to endorse the report because of her concern that it would actually stifle research innovation.
Whether the guidelines will in fact be widely adopted remains to be seen. If they are not, and the views of academic institutions on this subject vary widely, the work of the task force will not have the broad effect it has targeted. Perhaps after the second installment, we will have a better feel for the overall scope of the changes to be considered.
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