Research Policy Handbook


Institutional Conflict of Interest in Research Involving Human Subjects

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Establishes principles and procedures designed to ensure that research involving human subjects at Stanford University is conducted without untoward influence resulting from either the University's financial investments or holdings or the personal financial interests or holdings of key institutional leaders.

In developing this policy and related procedures, the University has taken into account the issues identified and discussed in "Protecting Patients, Preserving Integrity, Advancing Health: Accelerating Implementation of COI Policies in Human Subjects Research," published in 2008 by the Association of American Medical Colleges (AAMC) and the Association of American Universities (AAU).

1. Definitions

For purposes of this policy:

A. Institutional Conflict of Interest (ICOI) Involving Human Subjects Research

"Institutional conflict of interest (ICOI) involving human subjects research" is defined as a situation in which the financial investments or holdings of Stanford University or the personal financial interests or holdings of institutional leaders might affect or reasonably appear to affect institutional processes for the design, conduct, reporting, review, or oversight of human subjects research.

B. Human Subjects Research

"Human subjects research" is defined as any research that requires panel review and approval by a Stanford Institutional Review Board (IRB).

C. Institutional Leaders

"Institutional leaders" are those who have direct authority over faculty appointments, salaries, promotions, and/or allocation of institutional resources, such as assignment of graduate students or other trainees, funding or space, for faculty who are conducting human subjects research.

2. General Principles

Institutional conflicts of interest are of significant concern when financial interests create the potential for inappropriate influence over the institution's activities, personnel, or resources. The risks of such conflicts include the possibility that the integrity and objectivity of the institution's research may be threatened or may be perceived to be threatened; such risks are particularly acute in human subjects research, when the protection of human subjects may be adversely affected. The principle underlying this policy is that the University is obligated to protect against exposure to these risks as they may affect the integrity of human subjects research or the safety of participants when performed at or under the auspices of the institution.

This policy recognizes the principle that individual scholars at Stanford are free to select the subject matter of their research and to seek support from any source for their work, under provisions that are stated in the Principles Concerning Research in RPH. This ICOI policy for research involving human subjects provides a process to address circumstances in which an ICOI has the potential to impact a faculty member's research adversely if it is not managed appropriately or eliminated.

3. Institutional Conflicts of Interest Arising from the Financial Holdings or Investments of Stanford University

A. Licensing Activities

When Stanford University licenses technology or other intellectual property, it may receive equity in a company as a result of that license and/or a royalty or other fee as compensation for the use of that intellectual property and may also receive equity or other financial interests as part of a co-investment in the company by the University. An institutional conflict of interest is created if an investigator at Stanford subsequently undertakes to do human subjects research on a drug, device, biologic or other item on which Stanford has the potential for financial gain through future royalties or equity appreciation. Stanford will sequester such financial interest (both equity and royalty) in an account held by an independent third party to eliminate the ICOI as soon as the sequestration can practically be accomplished.

Procedures for identification and elimination of ICOI related to licensing

1. The Stanford Research Compliance office requires all new human subjects research protocols submitted for IRB review to indicate the nature and source(s) of all drugs, devices, or biologics which will be used in the proposed research, and the source(s) of all funding to be used in supporting the research, including unrestricted school, department, or individual accounts.

2. The Office of Technology Licensing (OTL) director or designee reviews this information to identify situations in which licensed Stanford-owned intellectual property was directly involved in the creation of the drugs, devices, biologics, diagnostics or other technology being studied.

3. If an ICOI is identified, the OTL director or designee informs the Stanford Management Company (SMC) and the Chief Financial Officer (CFO). Normally Stanford will place all such financial interests related to the ICOI in a sequestration account managed by a third party, which will maintain an ethical wall between it and the University such that the University will not know whether the conflicting financial interests have been sold and the third party will not know the results of any related human subjects research unless it is published. In addition, SMC will not release the proceeds from the potentially conflicted financial interest of the University for 10 years after (1) publication of all the Stanford research results that created the conflict or (2) that clinical trial research ends at Stanford. In addition, the third party manager will not sell any equity or right to receive future royalties during this period unless forced to do so by a merger, acquisition or bankruptcy of the company or similar event.

For avoidance of doubt, sequestration ends immediately when a product has been approved for commercial sale by a U.S. regulatory agency, or when the license is terminated, or the product which was the subject of the clinical trial is no longer being developed by a licensee/sublicensee.

Exceptions may include:

  • When the faculty member decides not to undertake the research
  • When there are circumstances that involve the use of platform technology or a generic method used broadly, in which case the specific situation will be evaluated by the ICOI committee which may recommend an exception to the requirement for sequestration to the Provost
  • OTL will notify the Office of Research Compliance and the office of the Conflict of Interest Review Program of the action that has been taken to address the ICOI.

B. Investments

Except for equity acquired as part of a licensing agreement and gifts of equity to the University, only the Stanford Management Company (SMC) and the Chief Financial Officer (CFO) are authorized to acquire equity in companies on behalf of the University. The policy of SMC and CFO is to maintain a separation of the sources of information and decision-making related to the investment of Stanford's assets and the operations of the University, including the conduct of research. This firewall is important to separate the research and other academic functions and the investment function of the University. In addition, it is SMC policy not to make direct investments in individual stocks or equity in companies. Instead, SMC invests with outside fund managers who make the independent decisions as to which specific stocks or equity to buy and sell.

As a matter of policy, SMC does not advise its outside fund managers whether to purchase or sell any individual stocks or equities held on Stanford's behalf except for maintaining a list of prohibited stocks as noted below. Some schools and departments may acquire stocks or other equity when friends of the school or department donate to a venture fund and select stocks or other equity to be purchased by the fund. In all cases, the selection of these stocks must be made by someone who is not an employee of the University and must be made without influence, information or advice from any University employee.

If a school, unit or department has a venture fund, it must designate a senior university official who will ensure that this policy is followed and the venture fund will request that equity be purchased or sold only after the senior official conducts a thorough review to exclude possible reliance on information from University employees or attempts to influence the buying or selling of equity by them. SMC will then carry out the directions of those who are making the investment decisions for the venture fund after receiving written confirmation from the University official that this process was followed. No schools, units or departments may start new venture funds without written permission of the President.

When notified about human subjects research directly involving licensed Stanford-owned technology by OTL, neither SMC nor the CFO will directly acquire equity in the licensee or permit any separately managed account or other account that it controls to directly acquire any such equity. It is acknowledged that SMC and accounts controlled by it may invest in commingled funds and other accounts that are managed by third parties not controlled by the University and that these accounts may invest it in equity of companies involved in conflicted human subjects research. SMC and the CFO shall not be required to sequester, or cause any account to sequester, equity in a listed company that SMC or an account acquired (or had entered into a binding agreement to acquire) prior to the time SMC was advised in writing that the company was involved in human subjects research at Stanford.

C. Gifts

Any gifts to the University of equity in individual companies directly utilizing Stanford intellectual property to produce a drug, device, diagnostic, etc. and that are involved in human subjects research at Stanford will be transferred to the sequestration account as soon as it can be practically and legally accomplished. Stanford may receive gifts from corporate entities that may also sponsor research involving human subjects according to policies described in RPH: Definitions and Categories of Sponsored Projects. Stanford's policies on such gifts are described in Research Policy Handbook, and in the Stanford Industry Interactions Policy, which applies to the School of Medicine, the Stanford Hospital and Clinics and the Lucile Packard Children's Hospital.

4. Potential Conflict of Interest When an Institutional Leader Has a Financial Interest Related to Human Subjects Research

The financial interests or holdings of institutional leaders must not affect, or reasonably appear to affect, the design, conduct, reporting, review or oversight of human subjects research carried out in the Stanford unit(s) over which they have authority, or by individuals whose Stanford appointments, or whose access to Stanford resources are under their direct oversight. Institutional leaders can include the President, the Provost, the Vice Provost and Dean of Research, School Deans, Senior Associate Deans, Department Chairs, Division Chiefs, and Institute and Center Directors. Potential institutional conflicts of interest that may involve members of IRB panels or of the individuals who serve on Conflict of Interest Committees or various committees involved with drug, device, or diagnostics procurement are governed by policies and procedures that regulate these committees.

Any direct financial interests of an institutional leader in a company that is sponsoring human subjects research or a financial interest related to intellectual property that is the subject of human subjects research at Stanford must be disclosed when an individual(s) in the unit for which they are the institutional leader proposes such research, subject to the thresholds described below.

Direct financial interests include:

  • Equity holdings that are held directly by the institutional leader or their immediate family but exclude (a) mutual funds for which the individual has no control over the investment decisions of the fund or (b) funds that are not actively managed by the institutional leader and they certify that the investments are managed under agreement with a professional, outside manager and that they do not participate in any way in decisions about the purchase of or sale of individual stocks
  • Royalties (whether paid through Stanford or through another source)
  • Payments for consulting, board service, or other services and any other financial relationship that involves payments by the company to the institutional leader

5. Procedures for Identification and Disclosure of Potential ICOI Arising From the Personal Financial Interests or Holdings of Institutional Leaders

A. Identification of Potential ICOI by Chairs, Division Chiefs, and Institute and Center Directors

Department chairs are required to review and sign off on all research proposals being submitted by faculty in their departments, divisions, or institutes, including those involving human subjects research. This review occurs when the proposal is submitted for funding to an extramural sponsor (as part of the electronic submission of the Proposal Development & Routing Form, PDRF) or in meeting their obligation to provide scientific evaluation when internal funds are used to support a human subjects research project. In carrying out these duties, the chair must identify any personal financial conflict of interest, regardless of value, that they have in the research sponsor or in an entity that owns or controls the investigational product that is the subject of the research. In departments that have division chiefs, the chair must also determine whether the division chief has any personal financial conflicts related to the HSR. Center and Institute directors who have a role comparable to chairs or division chiefs are also subject to these requirements. In addition, at the beginning of the initial term of a department chair, a division chief or center or institute director who has these duties, must review all active research projects involving human subjects in the department, division, or institute to identify any potential conflicts of interest that exist at that time.

B. Disclosure of Potential ICOI by Chairs, Division Chiefs, Institute and Center Directors

Any conflicts that are identified through these procedures, regardless of the value of the interest, must be disclosed to the School Dean or designee for review.

The conflict will be determined to be significant if it involves:

  • any financial interest in a non-publicly traded company (e.g., in a 'start up' company)
  • current or pending ownership interests (including shares, partnership stake, or derivative interests such as stock options) in a public company of $25,000 or more
  • income of $25,000 or more including consulting, honoraria, licensing or royalty income, or employment of an immediate family member

Any conflict of an institutional leader that is found to be significant by these criteria must be referred to the ICOI Committee (ICOIC) for its evaluation and recommendation to the Provost.

C. Identification and disclosure of potential ICOI of the President, Provost, Vice Provost and Dean of Research, School Deans and Senior Associate Deans for Research (or equivalent)

These institutional leaders do not have direct knowledge of all of the human subjects research at Stanford and do not have a role in reviewing the submission of specific research proposals or internally funded human subjects research. Therefore, as part of their annual conflict of interest disclosure, they will disclose all of their direct financial interests and indicate whether they are significant. For these purposes, a direct financial interest is deemed significant if it involves:

  • any financial interest in a non-publicly traded company (e.g., in a 'start up' company) that is more than 0.5% of the ownership interest in the company or valued at more than $50,000
  • current or pending ownership interests (including shares, partnership stake, or derivative interests such as stock options) in a public company of $50,000 or more
  • income of $50,000 or more including consulting, honoraria, licensing or royalty income, or employment of an immediate family member

Senior Associate Deans for Research (or equivalent) will disclose to the School Dean. The School Deans and the Vice Provost and Dean of Research will disclose to the Provost, the Provost will disclose to the President and the President will disclose to the Chair of the Board of Trustees. The annual disclosures that list companies in which these institutional leaders have a significant financial interest will be provided to Office of Research Compliance by the person responsible for receiving the individual's annual COI disclosure. If any human subjects research is proposed during the year involving one of these companies, the institutional leader(s) and the Dean of Research, who chairs the ICOIC, will be notified by the Office of Research Compliance. If at any time during the year, an institutional leader becomes aware of actual or proposed human subjects research involving a company or the product of a company for which they have a significant financial interest, they shall advise the Office of Research Compliance and the Dean of Research, as chair of the ICOIC of the possible ICOI. If the Dean of Research has the potential ICOI, an alternate chair will serve during the ICOIC review.

D. Procedures for Review and Disposition of Potential ICOI of Institutional Leaders

The ICOIC will review cases arising from the significant personal financial interests of institutional leaders. This committee is not charged with reviewing institutional conflicts of interest resulting from the financial investments or holdings of Stanford University because the ICOI policy requires sequestration of such holdings in a lockbox account. An exception (which requires ICOIC review and the Provost’s approval) may occur when the conflict is associated with intellectual property involving platform technology not obviously directly related to a specific human subjects research protocol. In all cases, the ICOIC will report to the Provost who will make the final decision about its recommendations.

The members of the ICOIC will be appointed by the Provost. The Dean of Research, or designee, will chair the ICOIC. At a minimum, the ICOIC members will include the Dean of Research (or designee), a Senior Associate Dean of Research or a senior faculty member with relevant expertise from three (3) Schools, a member of the public, and one or more additional members. If the Dean of Research has a conflict, the Provost will prepare the relevant materials and submit them directly to the ICOIC; the Dean of Research will be recused and an alternate chair appointed by the Provost. The dean of the school from which the ICOI is generated may be invited to serve as an ad hoc member for the discussion of cases pertaining to their school. Any member should abstain from ICOIC business when they have a personal COI or involvement in ICOI that relates to a research proposal under review. When an ICOI that involves a human subjects research project is identified that results from a significant financial interest of an institutional leader, the relevant school dean or designee will prepare a case document describing the nature of the ICOI. The case document will be submitted to the Dean of Research and must include a statement from the institutional official whose personal financial interests have created the conflict, from the faculty member whose research is potentially affected, and from the IRB as to the level of risk to human subjects. The ICOIC will review and assess the case document using the criteria listed below. As a result of this assessment, the recommendation to the Provost may:

  • prohibit the research from proceeding at or under the auspices of Stanford unless the institutional leader divests or terminates the financial relationship
  • propose a plan to manage the conflict
  • remove the institutional leader from such leadership position

In determining whether a recommendation to manage the ICOI should be considered, the ICOIC will evaluate all relevant factors, including:

  • The level of risk to human subjects in the research as determined by the IRB panel given the specific circumstances
  • The level of risk to the integrity and objectivity of the research given the specific circumstances
  • The level and type of the financial interests or relationship held by the institutional leader
  • How direct and immediate the institutional leader's authority is over the research and the people involved in conducting the research
  • The status of the company, e.g. privately-held start-up company, small publicly-traded or large publicly- traded company, and the importance or perceived importance of the research to the finances of the company
  • Whether a plan for separation of oversight of the faculty conducting human subjects research by the institutional official with the conflict can be implemented that is both practical and effective while the institution official remains in the assigned leadership position
  • The risk to the academic freedom and unbiased treatment of the faculty member who has proposed the research
  • The perceived risk to the reputation of the institution

If the ICOIC makes a recommendation for management, the report to the Provost must provide a management plan that includes some or all of the following recommendations:

  • In all cases, there must be identification of the individual, usually the School Dean or his or her designee, who will be directly responsible for ensuring that the requirements of the management plan are implemented and monitored for continued compliance. If the conflicted individual is the School Dean, the Provost will designate the responsible individual
  • A formal recusal of the conflicted leader from the chain of authority over the project and from authority over salary, promotion, space, and trainee assignment decisions affecting the investigator
  • A direct communication of the recusal arrangements to the institutional leader's superior, colleagues, and affected faculty
  • Designation of a "safe haven," e.g., a non-conflicted senior individual, with whom the investigator can address ICOI-related concerns
  • Instructions to the investigator(s) to disclose the institutional COI in public presentations and publications
  • Disclosure of the ICOI in the informed consent process and review of the consent by the IRB at each annual renewal of the study protocol
  • Disclosure of the ICOI to other centers in a multi-center trial
  • Any other requirements that the ICOI committee deems necessary

The Provost will review the ICOI committee's recommendations and make the final decision about whether a proposed management plan is acceptable. The Provost will report the decision to the relevant school deans and the Dean of Research.

If the conflicted institutional leader is a dean, or vice provost or provost, the case document and the Provost's decision will be transmitted to the President. If the conflict involves the President or Provost (for example if the Dean of a School is conducting human subjects research for a company in which the Provost has a direct financial interest), then the final decision will be made by the President (in the case of the Provost) or the Chair of the Board of Trustee's Audit and Compliance Committee (in the case of the President).

The Dean of Research will communicate the Provost's decision to the Office of Research Compliance for notification of the IRB, to the Office of Sponsored Research (OSR) if the ICOI involves a sponsored research project, so that OSR can meet any reporting obligations, and to the relevant dean or associate dean so that the recommendations can be implemented at the level of the individual schools.