March 2011 Volume 7 Number 7

Regulators, Watchdogs and Websites: Disclosure of Financial Conflicts of Interest

By Robyn Whipple Diaz, Associate General Counsel, St. Jude Children’s Research Hospital, Memphis, TN*

AuthorIn the wake of a torrent of media reports on conflicts of interest in medicine and research, health care institutions are facing increasing pressure from government agencies and non-government watchdog groups to manage, reduce and eliminate conflicts that could lead to bias in patient care and research. This article will review recent efforts to increase transparency in relationships between healthcare providers and the pharmaceutical and device industries, and discuss some of the challenges facing healthcare providers in identifying and reporting conflicts of interest (COIs) without slowing the development of potentially lifesaving drugs and devices.

On any given day, a patient opening up a newspaper in the United States might be faced with articles documenting failures by physicians and scientists to disclose substantial payments from industry, such as recent cases involving prominent physicians from respected institutions such as Emory University and Harvard Medical School.1 These scandals, while rare, have undermined public confidence in physicians and academic medical centers (AMCs) and have led to calls among some for healthcare providers to limit engagement with industry. Many of the media reports were sparked by Senate oversight hearings and investigations initiated by Senators Herb Kohl (D-WI) and Charles Grassley (R-IA). The hearings focused on industry funding of medical education, consultant payments in the medical device industry, bias in drug reviews, and pharmaceutical company payments to physicians.

Let the Sunshine In

As a result of the investigations, Senators Kohl and Grassley, with prominent positions on the Senate Special Committee on Aging and the Senate Finance Committee, respectively, co-sponsored the Physician Payments Sunshine Act which would have required manufacturers of pharmaceuticals, biologics and devices to publicly disclose payments to physicians.2 These “Sunshine” provisions eventually became law as part of the Patient Protection and Affordable Care Act (PPACA),3 which require pharmaceutical manufacturers to report any payment or transfer of value to providers of $10 or more (with some limited exceptions), and any ownership or investment interest held by a physician or an immediate family member. The reporting requirements take effect on March 31, 2013,and the information will be posted by the Department of Health and Human Services ( HHS) to a website available to the public. Reports for subsequent years will be due by the 90th day of each calendar year, for a reporting period of the previous calendar year. For each reportable payment or other transfer of value a manufacturer furnishes to a covered recipient, the manufacturer must disclose the name, business address and National Provider Identifier of the covered recipient; the date(s) on which payment was provided to the covered recipient; the amount of the payment or transfer of value; and a description of the form (e.g., cash, in-kind item, stock, etc.) and nature (e.g., consulting fees, food, travel, etc.) of the payment or transfer of value. If the payment or other transfer of value is related to marketing, education or research specific to a covered product, the name of the product to which the payment relates must also be disclosed.

The American Medical Student Association (AMSA) has also called for greater transparency and accountability. It annually publishes the PharmFree Scorecard which   evaluates COI policies at medical colleges and colleges of osteopathic medicine in the United States, and uses letter grades to assess schools’ performance in potential areas of conflict created by industry marketing to physicians and trainees.4 In 2009, when more than 20 schools contacted for the survey did not reply to AMSA, Senator Grassley issued letters to each of those schools requesting that they provide his office with the policies that were not released in response to the AMSA’s request.5

IOM, OIG, and NIH – Even Industry – Join the Call for Transparency

Interest in financial COIs has not, of course, been limited to the halls of Congress. Industry has made notable attempts at self-regulation, including publication of codes of conduct addressing payments and/or gifts to healthcare providers by the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Advanced Medical Technology Association (AdvaMed).6 These codes of conduct are voluntary, but several states have incorporated portions of the PhRMA and AdvaMed Codes into statutes and regulations governing pharmaceutical and medical device marketing, making compliance in those jurisdictions mandatory.7

Notwithstanding these efforts by Industry, concerns about financial COIs persist. In April 2009, the Institute of Medicine (IOM) published a report on COIs in medicine. The committee recommended that AMCs establish COI policies that require disclosure and management of both individual and institutional financial ties to industry.8 That same year, the HHS Office of Inspector General (OIG) issued a report regarding the Food and Drug Administration (FDA)9 , which assessed the FDA’s oversight of clinical investigators’ financial interests. The OIG subsequently issued a report regarding the National Institutes of Health (NIH) oversight of grantees’ financial COIs, recommending that NIH require grantee institutions to collect information on all significant financial interests held by researchers and not just those deemed by researchers to be reasonably affected by the research.10 The OIG also emphasized the importance of NIH’s oversight of grantee institutions to ensure that financial COIs are reported and managed appropriately.

On May 21, 2010, the NIH responded by publishing a Notice of Proposed Rulemaking (NPRM) regarding the responsibility of Public Health Service (PHS) grant applicants to promote objectivity in research.11 This rule would change the definition of significant COIs and the process for review and management of those COIs by AMCs. Major changes include a reduction in the de minimus threshold for reporting a financial interest from the current level of $10,000 to a new level of $5,000; requiring reporting of any equity interest in non-publicly traded companies, without regard to dollar amount; mandating training of investigators before engaging in PHS-funded research, and then every two years thereafter; and placing the responsibility for deciding whether a financial COI exists on the institution, rather than on the investigator. Perhaps the most controversial aspect of the NPRM was the requirement that each institution that receives PHS funding make information about significant financial COIs of PHS-funded investigators available on a publicly accessible website. The website must be maintained by the institution and updated annually. The NPRM comment period ended in July 2010. A final rule is expected sometime in federal fiscal year 2011.

Will the NIH Final Rule Ease Concerns About Lack of Transparency?

If the substance of the NIH final rulemaking is similar to that of the proposed rulemaking, AMCs will soon find themselves facing an increase in the number of reported financial interests and new burdens associated with assessing and minimizing potential conflicts, in addition to developing new training programs and disclosure websites. They will also confront scrutiny of information reported on their websites, and comparisons between that information and the payments reported on the HHS-run website required by the PPACA Sunshine provisions. Inconsistent standards regarding the threshold for disclosure (generally speaking, $10 on the HHS website and $5,000 on AMC websites) may lead to confusion, false assumptions, and greater distrust of industry and academia.12

Moreover, several pharmaceutical companies are now publishing online information about payments made to physicians,13 some voluntarily and some as a result of legal matters, and those payments has been compiled into one large, searchable database by ProPublica, a nonprofit investigative journalism organization.14 The information compiled by ProPublica is being used by the media to track the financial ties between doctors and drug companies and make assertions about the propriety of such financial ties. Given the lack of standardization of data, there are significant concerns within the medical and scientific communities that the data will be misinterpreted if taken at face value. For example, some pharmaceutical companies reported on the previous 18 months of payments, while some reported on the previous 12 or six months of payments. AMC COI policies often require investigators to report conflicts in accordance with the AMC’s fiscal year, which may or may not be in line with the reporting period used by various pharmaceutical companies. Opportunities for misunderstandings abound.

Nor will criticisms of the scope of federal regulations on financial COIs end with NIH’s publication of a final rule. In a January 2011 report, the OIG recommended that NIH promulgate regulations requiring grantee institutions to identify, report, and address institutional conflicts to NIH.15 The OIG posited that NIH’s proposed regulatory changes focus on researchers' conflicts and fail to deal with the problem of institutional conflicts, such as when an institution has an equity interest in a non-public company or when a high-ranking official of an institution has a financial COI.


AMCs and other providers must now walk a fine line between limiting, identifying and managing COIs, and acknowledging that interactions with industry must continue in order to develop new technologies. With the reputation of individual physician/scientists and institutions at stake, the propriety of financial relationships with industry are likely to be debated for years to come.

*Opinions expressed herein are attributable to the author and are not those of St. Jude Children’s Research Hospital.

1 Gardiner Harris and Benedict Carey, Researchers Fail to Reveal Full Drug Pay, N.Y. Times online, June 8, 2008; David Armstrong, US Probes Emory Doctor’s Glaxo Ties, Wall St. J. online, Feb. 26, 2009.
2 S. 301, 111 th Cong. (2009).
3 42 U.S.C.A. § 1320a-7h (Westlaw 2010 through Pub. L. No. 111-148).
4 The Scorecard is available at
5 Paul Basken, Senator Grassley Demands Answers from Medical Schools on Ethics Policies, The Chronicle of Higher Education, June 24, 2009, available at
6 PhRMA Code on Interactions with Healthcare Professionals, available; AdvaMed Code of Ethics, available at
7 Erik Snapp and Monika Blacha, Mandatory Compliance With 'Voluntary' Codes , Law 360 (October 31, 2008), available at
8 Bernard Lo and Marilyn J. Field, Editors; Conflict of Interest in Medical Research, Education, and Practice, Institute of Medicine (April 21, 2009), available at
9 Daniel R. Levinson, Inspector General, The Food and Drug Administration’s Oversight of Clinical Investigators’ Financial Information, Department of Health and Human Services Office of Inspector General, OEI-05-07-00730 (Jan 2009), available at
10 Daniel R. Levinson, Inspector General, How Grantees Manage Financial Conflicts of Interest in Research Funded by the National Institutes of Health, Department of Health and Human Services Office of the Inspector General, OEI-03-07-00700 (Nov. 2009), available at
11 Responsibility of Applicants for Promoting Objectivity in Research for Which Public Health Service Funding is Sought and Responsible Prospective Contractors: Notice of Proposed Rule Making, 75 Fed. Reg. 28689 (May 21, 2010).
12 Gelvina Stevenson, Financial Conflicts of Interest: The March Toward Greater Transparency, AHLA Connections, Dec. 2010.
13 See, e.g., Press Release, Lilly Set to Become First Pharmaceutical Research Company to Disclose Physician Payments, Ely Lilly and Company, Sept. 24, 2008,; Jane Akre , Injury Board National News Desk, Pfizer Vows To Disclose Physician Payments, Feb, 11, 2009, ; Policy and Medicine, Physician Payment Sunshine: Merck, Second Pharmaceutical Company to Disclose Payments to Physicians, October 20, 2009,
14 Dan Nguyen, Charles Ornstein, and Tracy Weber, Dollars for Docs: What Drug Companies are Paying Your Doctors , available at
15 Daniel R. Levinson, Inspector General, Institutional Conflicts of Interest at NIH Grantees, Department of Health and Human Services Office of the Inspector General, OEI-03-00-0070480 (Jan. 2011), available at

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