CM-35 - Significant Financial Interests

October 1, 1995

These guidelines, effective October 1, 1995, define general Louisiana State University Health Sciences Center (LSUHSC) policy and procedures regarding management of financial conflicts of interest that could bias the outcome of federally sponsored projects involving research, education, and Health Sciences Center service. Their primary purpose is to protect the credibility and integrity of the Health Sciences Center's faculty and staff so that public trust and confidence in the University's sponsored activities is ensured. Please note, these guidelines apply only to federally sponsored projects.

To comply with new federal regulations, LSUHSC must manage, reduce, or eliminate any actual or potential conflicts of interest that may be presented by a financial interest of an investigator in a federally sponsored project. Thus, the Health Sciences Center requires that investigators disclose any significant financial interest that may present an actual or potential conflict of interest in relationship with a federally sponsored project.

1. Background - Technology Tranfer and Conflict of Interest:
   The value of the results of federally funded research to the health and the economy of the nation must not be compromised by any investigator's financial interest that could bias the design, conduct or reporting of the research. This policy seeks to maintain a reasonable balance between these competing interests, give the Health Sciences Center the ability to identify and manage financial interests that may bias the research, and minimize reporting and other burdens on the investigators.
2. Definitions
   A potential conflict of interest occurs when there is a divergence between an individual's private interests and his or her professional obligations to the Health Sciences Center such that an independent observer might reasonably question whether the individual's professional actions or decisions are determined by considerations of personal gain, financial or otherwise. An actual conflict of interest depends on the situation and not on the character or actions of the individual.
   
   Investigator means the principal investigator, project director, co-principal investigators, and any other person at the Health Sciences Center who is responsible for the design, conduct, or reporting of research, educational, or service activities funded, or proposed for funding, by an external sponsor.
   
   Note the term "Investigator@ includes the investigator's spouse and dependent children. "Significant Financial Interest" means anything of monetary value, including, but not limited to:
   • Salary 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 royalties from such rights).

The term does not include:

1. Salary, royalties, or other remuneration from the Health Sciences Center;

2. Income from seminars, lectures, or teaching engagements sponsored by public or nonprofit entities;

3. Income from service on advisory committees or review panels for public or nonprofit entities; or

4. An equity interest that when aggregated for the Investigator and the investigator's spouse and dependent children, meets both of the following tests: does not exceed $10,000 in value as determined through reference to public prices or other reasonable measures of fair market value or constitute more than a five percent ownership interest in any single entity; or

5. Salary, royalties or other payments that when aggregated for the Investigator and the Investigator's spouse and dependent children over the next twelve months, are not expected to exceed $10,000.

Provided, however, that the exclusions in items a), d), and e) shall not apply if the compensation or transfer of an equity interest is conditioned upon a particular outcome in a sponsored research project.

3. Guidelines for Disclosure

Each Investigator is required to disclose any significant financial interest of the Investigator that would reasonably appear to be directly and significantly affected by the research or educational activities funded, or proposed for funding, by a federal or other sponsor.

Regardless of the above minimum requirement, a faculty or staff member, in his or her own best interest, may choose to disclose any other financial or related interest that could present an actual conflict of interest or be perceived to present a conflict of interest. Disclosure is a key factor in protecting one's reputation and career from potentially embarrassing or harmful allegations of misconduct.

4. Procedures

1. Federal regulations require that all significant financial interests must be disclosed prior to the time a proposal is submitted. This will be done at the time when the proposal is routed for approval with the Office of Grants and Governmental Programs (OGGP) Checklist. All financial disclosures must be updated by investigators during the period of the award, as new reportable significant financial interests are obtained.
2. In the event that a project is undertaken without a proposal having been routed through the normal channels, a OGGP Checklist must be completed (complete with any necessary disclosures) prior to acceptance of the award.
3. It is the responsibility of the principal investigator to ensure that every investigator signing the LSUHSC OGGP Checklist or who will have a key role on the project discloses any significant financial interest.
4. Each person who has significant financial interests requiring disclosure must complete a Significant Financial Interests Disclosure Form, attach all required supporting documentation, including a copy of any relevant PM11 disclosure, and place the materials in a sealed envelope addressed to the Office of Research of the relevant school of the Health Sciences Center and clearly marked ACONFIDENTIAL Significant Interests Financial Disclosure", and identified with the name of the person making the disclosure, the name of the federal agency and the project name.
5. The Office of Research of the relevant school of the Health Sciences Center or official designee, shall conduct an initial review of all financial disclosures to determine whether or not a potential conflict of interest exists. A potential conflict of interest exists when the review reasonably determines that a significant financial interest could directly and significantly affect the design, conduct, or reporting of the proposed sponsored project. If the initial determination is made that there may be a potential for conflict of interest covered by this policy, then the Disclosure packet will be referred to the Dean of the relevant school who will forward it to the Office of the Vice Chancellor for Academic Affairs. The Vice Chancellor for Academic Affairs will then convene the Health Sciences Center Conflict of Interest Review Committee (CIRC). The Principal Investigator, and disclosing investigators will be informed whether any disclosures have been forwarded for review.

   If a disclosure is forwarded to the CIRC, the Investigator, in cooperation with the academic department of school, shall promptly develop and present to the CIRC a Conflict of Interest Resolution Plan that details proposed steps that will be taken to manage, reduce, or eliminate any actual or potential conflict of interest presented by a significant financial interest. At a minimum the resolution plan shall address such issues as:

1. Public disclosure of significant financial interests
2. Review of research protocol by independent reviewers
3. Monitoring of research by independent reviewers

The CIRC shall review the Resolution Plan and as appropriate, approve it, disapprove it, add conditions or restrictions, including, but not limited to the following.

1. Modification of the research plan
2. Disqualification of the investigator with the conflict from participation in all or a portion of the research
3. Divestiture of significant financial interests
4. Severance of relationships that create actual or potential conflicts of interest

If the CIRC determines that imposing specific conditions or restrictions would be inequitable, or that the potential negative impacts that may arise from a significant financial interest are outweighed by interests of scientific progress, technology transfer, or the public health and welfare, then the CIRC may, in exceptional circumstances, recommend that, to the extent permitted by federal regulations, the research go forward without imposing such conditions or restrictions. In these cases, the Vice Chancellor for Academic Affairs shall make the final decision regarding resolution.

The Vice Chancellor for Academic Affairs shall ultimately determine what conditions or restrictions, if any, should be imposed by LSUHSC to manage actual or potential conflicts of interest arising from disclosed significant financial interests.

6. The approved resolution plan shall be incorporated into a Memorandum of Understanding that detail the conditions or restrictions imposed upon the Investigator in the conduct of the project or in the relationship with the federal sponsor or other entity. The Memorandum of Understanding shall be signed by the Investigator, the chairperson of the CIRC, the Department Head, the Office of Research of the appropriate school, the Dean and the Vice Chancellor for Academic Affairs and will be placed in the Vice Chancellor for Academic Affairs proposal file.
   
   Actual or potential conflicts of interests must be resolved in accordance with these Guidelines prior to accepting any award, or they will be disclosed to the sponsoring agency for action.  

7. The CIRC shall maintain minutes of its deliberations. Records of investigator financial disclosures and of actions taken to manage actual or potential conflicts of interest, shall be retained by the Vice Chancellor for Academic Affairs until 3 years after the later of the termination or completion of the award to which they relate, or the resolution of any government action involving those records.
8. Whenever an Investigator has violated this policy or the terms of the Memorandum of Understanding by failing to disclose a significant conflict of interest, or fading to adhere to the resolution plan, the CIRC shall report to the Vice Chancellor for Academic Affairs who may explore disciplinary action ranging from a public letter of reprimand to dismissal and termination of employment. If the violation results in a collateral proceeding under Health Sciences Center policies regarding misconduct in science, then the CIRC shall notify the Vice Chancellor for Academic Affairs; although possible disciplinary action may be delayed until the misconduct allegations have been investigated, it may be necessary to withdraw a pending grant application.
9. Collaborators from other institutions must either comply with this policy or provide a certification that their institutions are in compliance with federal policies regarding investigator significant financial interest disclosure and that their portion of the project is in compliance with their institutional policies.
10. Appointment of the CIRC. Committee members are appointed by the Vice Chancellor for Academic Affairs. The CIRC shall contain, at a minimum, four faculty members representing a cross section of academic disciplines, a research administrator, and an appropriate administrative officer with an academic degree in the field of business administration, accounting, finance, economics, etc. and professional level of business or administrative experience. Appointments will be made on a staggered basis. Members may be reappointed.

Signed: Mervin L. Trail, M.D., Chancellor