PENN STATE - RESEARCH ADMINISTRATION

Policy RA20 INDIVIDUAL CONFLICT OF INTEREST

Contents:

PURPOSE:

In order to enable work done at Penn State to have the broadest positive impact on society, the University sets forth this policy to protect the research, scholarship, artistic endeavors, and technology transfer programs (also referred to as University Research and Technology Transfer) of the University from improper actions and influences that can arise as a result of individual conflict of interest. Further, this policy serves to define the safeguards necessary to preserve the integrity of the University, its faculty, students, staff, officers and other senior managers of the University.

POLICY:

All significant financial or business interests related to research, of students, faculty, staff, administrators, officers and other senior managers of the University (hereinafter referred to as "Individuals") must be fully disclosed to a University Conflict of Interest Committee, reporting to the Executive Vice President and Provost. This applies to all research, whether sponsored or unsponsored. If the significant financial or business interest is evaluated by the Conflict of Interest Committee (“Committee”) to present a real or perceived conflict of interest, the conflict must be properly managed or eliminated before any contract, sponsored project (research, instruction or outreach), dedicated gift, or other transaction is executed, any relationship is initiated, or any action is taken that might be influenced or appear to be influenced by the conflict of interest. In order to ensure compliance, Individuals deemed to have a real or perceived conflict of interest are required to complete, at a minimum, an annual disclosure regarding the significant financial or business interests.

This policy is in compliance with:

• Title 42 Code of Federal Regulations (CFR), Part 50, Subpart F, Responsibility of Applicants for Promoting Objectivity in Research for Which PHS Funding is Sought
• Title 45 Code of Federal Regulations (CFR), Part 94, Responsible Prospective Contractors
• Title 21 Code of Federal Regulations (CFR), Part 54, Financial Disclosure by Clinical Investigators

DEFINITION:

For the purposes of this policy, research is defined as "a systematic investigation, including research development, testing and evaluation, designed to develop or contribute to generalizable knowledge" (45 CFR §46.102[d]).

The term individual conflict of interest refers to situations in which financial considerations may compromise, or have the appearance of compromising, an employee's professional judgment in designing, conducting, evaluating, or reporting on University Research and Technology Transfer programs and other scholarly activities. Thus, all activities with relevance to the broad disciplinary field or the research of an Individual should be disclosed as they arise. Financial interest related to research can include, but is not limited to, financial interest in the sponsor, product, or service being tested, or competitor of the sponsor or product or services being tested. The bias such conflicts may conceivably impart can affect not only the collection, analysis, and interpretation of data, but also the hiring of staff, procurement of materials, sharing of results, choice of licensees, choice of protocol, involvement of human participants, and the use of statistical methods.

For the purposes of this policy, "Significant Financial or Business Interests" means anything of monetary value/interest held by the Individual, the Individual's spouse, or the Individual's dependent children, including, but not limited to:

• Compensation or other payments for services (e.g., consulting fees or honoraria);
• Equity interests (e.g., stocks, stock options or other ownership interests);
• Intellectual property rights (e.g., patents, copyrights, and separately, royalties from such rights);
• Holding a management position or playing an advisory or consultative role (whether compensated or not) with a company or on the board of a company.

The term does not include:

• Salary or other remuneration from the University;
• Income from seminars, lectures, or teaching engagements sponsored by public or nonprofit entities;
• Income from service on advisory committees or review panels for public entities;
• Income from service on advisory committees or review panels for non-profit entities that are not affiliated with "for profit" companies;
• An equity interest that, when aggregated for the Individual and the Individual’s spouse and dependent children, meets all of the following: (1) does not exceed $10,000 (considered as a De minimis amount) in value as determined through reference to public prices or other reasonable measures of fair market value, (2) does not represent more than a five percent ownership interest in any single entity, (3) is publicly traded on a stock exchange, (4) is not related to human participant research, and (5) an arrangement has not been entered into where the value of the equity interests will be affected by the outcome of the research (e.g. the arrangement does not provide for an increase in the value of the interest based upon study results that are favorable to the entity);
• Broad based mutual funds;
• Other compensation, royalties or other payments that, when aggregated for the Individual and the Individual's spouse and dependent children over the next twelve months, meets all of the following: (1) are not expected to exceed $10,000 (considered as a De minimis amount), (2) is not related to human participant research and (3) an arrangement has not been entered into where the amount of compensation will be affected by the outcome of the research (e.g. the arrangement does not provide for a higher compensation if the outcome of the research is favorable to the entity).

"University Research and Technology Transfer" includes sponsored projects (including for research, instruction or outreach activities), dedicated gifts, research, scholarship, artistic endeavors, and technology transfer.

BACKGROUND:

One of Penn State University's premier assets is its integrity. If the public were to lose confidence in that integrity, the University would sustain severe injury. Therefore, the University is very concerned about conflict of interest; it strikes to the very heart of the University's integrity. The University has identified several key values (not in any particular order) that must be protected from conflicts of interest¹:

¹ The statement of these values is based in part upon a report issued by the Association of American Universities (AAU). "Report on Individual and Institutional Financial Conflict of Interest," by the Task Force on Research Accountability, Report and Recommendations, October 2001. The language of portions of this report is used directly in sections of this policy.

• Commitment to serving the public trust;
• Commitment to the pursuit of excellence;
• Commitment to the education and welfare of students;
• Commitment to the safety and care of patients under treatment and all human participants in research;
• Commitment to academic freedom;
• Commitment to advancing the range and depth of knowledge and understanding of the natural world and our human condition;
• Commitment to open and timely communication and dissemination of knowledge;
• Commitment to protect both the appearance and the actual integrity and objectivity of University Research and Technology Transfer;
• Commitment to ensure the technology transfer and commercialization of the results of research for the betterment of society;
• Commitment to personal and professional development of students, faculty, staff, administrators, and officers;
• Commitment to meet our social and ethical responsibilities by obeying the laws and regulations governing the conduct of a University.

Penn State believes that significant conflicts of interest, when unchecked or unmanaged, can threaten these key values and thus has established within this and related policies a rigorous set of guidelines and procedures to ensure that they are protected. In addition and of paramount concern, is the health and welfare of human participants in research, because lives are literally at stake. Financial and business interests in human participants research must be the focus of intense scrutiny. When human participants are involved, no De minimis will apply, thus, all financial or business interests related to human participant research are subject to disclosure and management.

While the University recognizes the necessity to protect against the ill effects of conflicts of interest, it also recognizes that it has public responsibilities that may require the University to accept a certain level of potential conflicts of interest, so long as the conflicts themselves are properly managed and the ill effects mitigated. Transferring University-developed knowledge to the private sector fulfills one of the goals of federally funded research, by bringing the fruits of research to the benefit of society. With this important activity comes increasingly close relationships between industry and the University, relationships that provide benefits but also hazards through the increased risk of conflicts of interest, both individual and institutional (see RA21), that can threaten to compromise academic programs and institutional autonomy.

IMPLEMENTATION:

The problem with conflict of interest is rarely the existence of a particular conflict itself - rather it is the question about what is to be done with the conflict. In most cases, problems arise when the significant financial or business interest(s) is not disclosed properly, or when it is not properly assessed or managed. The approach of this policy is threefold:

1. Disclose always (both internally and, when necessary, externally in publications, reports, public presentations, or informed consent documents).
2. Manage the conflict in most cases.  This is most often accomplished through the development of conflict management plans that must be reviewed and approved by the Committee, as outlined below.
3. Prohibit an activity or eliminate the conflict (e.g., by divestiture) when necessary to protect the public interest or the key values of the University.

Conflict of Interest Official:

A key goal in this approach is to segregate the decision-making process regarding the financial activities and interests from the research or other programmatic activities of the University, so that they are separately and independently managed. To this end, oversight of this policy is the responsibility of the Director of the Penn State Office for Research Protections who shall serve as the Conflict of Interest Official of the University, reporting directly to the Vice President for Research and Dean of the Graduate School, and for matters related directly to this policy, to the Executive Vice President and Provost.

The Conflict of Interest Official is responsible for developing, promulgating, and updating procedures and guidelines for the implementation of this policy and for providing administrative support to the Committee.

Conflict of Interest Committee:

The University shall establish an Individual Conflict of Interest (COI) Committee(s) (“Committee”). It shall report to the Executive Vice President and Provost (or, if the Provost is the one involved in the conflict, to the next highest University official who is not involved in the specific conflict). The Committee membership shall represent the diversity of academic disciplines at Penn State, but shall include at least one individual who conducts research involving human participants at Penn State. The Conflict of Interest Official (or delegate at the College of Medicine) shall serve ex officio on the Committee, and shall also serve as the liaison to the University's Institutional Review Board(s) (“IRB”). In the case of a student, the associate dean for graduate studies or associate dean for undergraduate studies should be represented on the Committee. For cases involving international students, a representative of the Office of International Students and Scholars should be appointed to the Committee.

Responsibilities of the Committee:

• Review of significant financial or business interest(s)disclosures as defined by this policy.
• Determine if there is a real or potential conflict of interest.
• If human participants are involved, determine whether:
• the significant financial or business interest(s) will adversely affect the protection of participants
• whether the significant financial or business interest(s) will adversely affect the integrity of the research
• and when a significant financial or business interest(s) may affect the protection of human participants, indicate that disclosure to potential participants or the public cannot be used as the sole method of management.
• Documentation of the Committee's findings and the bases for the approval of conflict management plans, including steps to be taken to manage or minimize the potential for conflict of interest by reducing or eliminating the interest or an Individual's direct involvement in the project.
• Management and oversight of projects that are being managed for conflicts of interest.
• In instances in which students are involved, given the educational mission of the University, ensure that the conflict management plan protects the students' academic progress, intellectual property interests, and welfare.
• Communication to the IRB, and to responsible institutional officials, of summary information about the nature and amount of any financial or business interest related to human participants in research, along with the Committee's findings and recommendations concerning requests by financially interested Individuals to conduct such research and any management plans approved by the Committee. Individuals conducting research involving human participants should note that review of significant financial and business interests and implementation of a management plan, if needed, by the Committee does not constitute approval of the research proposed. The IRB has final authority on whether the research should be approved or not and will not render its decision until after the Committee has reviewed the interests and implemented any necessary management plan. The IRB will consider the management plan, if any, in its final determination and may also include additional protections to the management plan if it deems necessary.

Disclosure Process:

Prior disclosure of any significant financial or business interests is required of all Individuals; however, at a minimum the University shall require disclosures in the following instances:

• Disclosures of significant financial or business interests are required of all faculty members at least annually;
• At the time of initial review or continuing review of research involving human participants by the IRB;
• Prior to the submission of proposals for sponsored projects or acceptance of awards, Individuals shall certify as to whether or not the project requires the disclosure of any significant financial or business interests of project personnel;
• Prior to engaging in any technology commercialization activities involving the licensing or other transfer of University technology to third parties (for example, cases where faculty consult with, have a significant financial or business interest in, or hold a management position in a company to which their intellectual property has been licensed), Individuals shall disclose any significant financial or business interest and obtain prior approval from the Committee;
• Prior to the start-up of any business or commercial activity by an Individual involving the broad disciplinary field or the research of that Individual, Individuals shall disclose the significant financial or business interest; and
• Any time there is a change to an Individual’s disclosed significant financial or business interests or as new reportable significant financial or business interests are obtained.

Significant financial or business interests that involve students of the University present special cases where particular attention must be paid to the disclosure and management of potential conflicts so as not to compromise the education and welfare of the students. At a minimum, the University shall require disclosures in the following instance:

• Prior to hiring students to work for a business or commercial activity in which an Individual has a significant financial or business interest, if that Individual is the student’s advisor, committee member, or program head, or has influence over the student’s academic program otherwise.

Sanctions:

Whenever an Individual has violated this policy, the COI Committee shall recommend sanctions which may include disciplinary action ranging from a letter of reprimand to dismissal and termination of employment. If the violation results in a collateral proceeding under University policies regarding misconduct in research (see RA10), then the Committee shall defer a decision on sanctions until the misconduct in research process is completed. The Committee's recommendations on sanctions shall be presented to the Individual's cognizant University official who, in consultation with the Vice President for Research and Dean of the Graduate School (or the Senior Vice President for Health Affairs at Hershey Medical Center), shall enforce any disciplinary action, following due process as outline in University policy. In addition, in cases impacting federally funded sponsored projects, the University shall follow federal regulations regarding the notification of the sponsoring agency in the event an Individual has failed to comply with this policy.

CROSS REFERENCES:

Other Policies in this Manual may have specific application and should be referred to especially;

AD17 – Royalty Payments for Course Materials,

AD47 - General Standards of Professional Ethics,

FN14 - Use of Tangible Assets, Equipment, Supplies and Services,

HR35 - Public Service by Members of the Faculty and Staff,

HR42 - Personal Compensation by a State Agency or Department,

HR80 - Private Consulting Practice,

HR91 - Conflict of Interest,

BS07 – Authority and Procurement,

BS17 - Use and Procurement of External Consultants,

RA07 – Use of Equipment Purchased on Federally Sponsored Programs,

RA10 - Handling Inquiries / Investigations into Questions of Ethics in Research and in Other Scholarly Activities,

RA11 - Patents and Copyrights (Intellectual Property),

RA12 - Technology Transfer and Entrepreneurial Activity (Faculty Research),

RA17 – Courseware,

RA21 - Institutional Financial Conflict of Interest Involving Sponsored Projects, Dedicated Gifts, Research, Scholarship, and Technology Transfer,

RAG16 – The Responsible Conduct of Research,

RAG20 – Guidance on the Disclosure of Significant Financial or Business Interest(s)

Effective Date: June 17, 2009
Date Approved: June 15, 2009
Date Published: June 16, 2009 (editorial change - January 1, 2010)

Most recent changes:

• January 1, 2010 - Editorial changes. Title changed FROM "Senior Vice President for Research and Dean of the Graduate School" TO "Vice President for Research and Dean of the Graduate School," to reflect position changes, effective January 1, 2010.

Revision History (and effective dates):

• June 17, 2009 - Revisions made to the POLICY, DEFINITIONS and IMPLEMENTATION sections, per AAHRPP (accreditation for the human research program) requirements/expectations.
• May 24, 2007 - Revisions made to the POLICY, DEFINITIONS and IMPLEMENTATION sections to clarify the handling of conflicts of interest.
• November 8, 2006 - Editorial change - changed Vice President for Research to Senior Vice President for Research.
• April 17, 2006 - Revisions made to the POLICY section, clarifying that any real or perceived conflict of interest must be "disclosed" as well as properly managed, and that this applies to all research, whether sponsored or unsponsored. Multiple revisions made throughout the DEFINITION section. In the BACKGROUND section, clarification on when "no De minimis" applies. The Executive Vice President and Provost added for reporting on such matters in the IMPLEMENTATION section.
• December 15, 2005 - verbiage added to the "Disclosure Process" section to clarify the handling of consulting activities involving the licensing or other transfer of University technology to third parties and potential conflicts of interest.
• December 3, 2003 - New Policy.