Columbia CTL



CONFLICTS OF INTEREST

The Case of the Promising New Drug

Dr. Linda Roberts has spent the last past five years working on a new drug for the treatment of lupus erythematosis.[1] The molecule she designed links a fragment of an anti-inflammatory drug with a protein that binds to the diseased cells.[2] Designing this new drug was made possible by two decades of research in the Immunology Laboratory at Westfield University Medical School, where Dr. Roberts works. Without the basic work in researching the molecular biology of this disease (that in the early stages of the research had beenwere funded by the National Institutes of Health), the highly specific drug would never have been developed.

At the same time that Dr. Roberts’ research has yielded such promising results, federal financial support for biomedical research has declined.[3] If this new agent were an effective treatment and a commercial success, it could be extremely helpful for Dr. Roberts, her Departmentdepartment, and especially the Medical medical Schoolschool.

Dr. Roberts’ research, in the last past five years, was has been supported by funds from Arthrid, Inc.,

a company that markets a number of drugs for arthritis.[4] She was also given a consultant fee of $50,000. Indeed, researchers working for Arthrid, Inc. helped with methods for producing large amounts of the therapeutic molecule. Without the resources of a pharmaceutical company, developing a marketable product would have been extremely difficult, if not impossible. Also, changes in federal regulations governing research encourage collaborations between academic scientists and companies in order to promote the transfer of technology from the laboratory bench to the clinic.[5] There has also been a trend for institutions to hold equity interest[6] in the start-up companies of their faculty. Because Arthrid, Inc. is a local company and has been generous to the medical school, several members of the Westfield University Hospital Institutional Review Board (IRB)[7] have bought stock in the company.

This long- standing relationship made it feasible for Arthrid, Inc. and the Medical medical School school to enter into an agreement that entitles Arthrid, Inc. to own the patent rights[8] to all discoveries made

in the course of the research it funds, and entitles Westfield University to 5% of Arthrid, Inc. stock and a 5% royalty[9] on sales of all products that result from the research.

In the highly competitive pharmaceutical industry, companies like Arthrid, Inc., seek patents on all promising discoveries. A patent gives the patent holder the right to exclude anyone else from making the patented product during the 20-year life of the patent. During those 20 years, the patent holder would hope to earn enough revenue from the product to recover the typically enormous costs of the basic and clinical research that leads to the production of the product. It is possible for the research and development of a drug, and the subsequent approval by the FDA, to take as long as 10 years and cost more than $800 million.[10].

Included in the Arthrid-Westfield agreement is a non-disclosure agreement,[11] whereby Arthrid will be able to protect its proprietary interests. There are restrictions regarding publication, including Arthrid’s right to review all data and a mandate for Dr. Roberts to send to Arthrid all manuscripts at least 30 days prior to their submission for publication. This would allow Arthrid, Inc. to delete any information that, according to the company’s directions, should not be published or presented, which might threaten its rights to any patentable invention.

Extensive use of the experimental drug in animal models of lupus has been highly successful, producing the desired anti-inflammatory effects. Other similar drugs have been used without any serious toxicity. Thus, the drug is now ready for Phase I clinical trials.[12]. Arthrid, Inc. would be pleased to pay for a trial at Westfield University Hospital. By all accounts, Dr. Roberts would be the ideal clinician to conduct the trial, because of her intimate knowledge of the drug. Arthrid, Inc. is willing to issue to Dr. Roberts 2% of its common stock.[13] In addition her husband will receive 2% of Arthrid stock and her fourteen14-year year-old son will receive 1%. If the trial is successful, this would go a long way toward covering her son's college tuition.

Dr. Roberts and her colleagues work in the hospital’s Medical Clinic, which that has a large number of patients with lupus who would be available and thus easy to recruit for the clinical trial. Also, because of the Department’s department’s reputation in research and patient care, Dr. Roberts would be able to enlist the cooperation of other hospital departments around the country in initiating a multi-center clinical trial[14] of the new agent for treating lupus. Dr. Roberts and her colleagues submitted a proposal to the IRB that which they believe justifies the use of their clinic patients because of the benefit that this new drug will provide.[15]

On the assumption that she will be conducting the trial, Dr. Roberts approaches her postdoc, Dr. Henry Chung, to ask if he would join her in testing the new drug. But Dr. Chung has been pursuing a different and potentially significant project, cloning a gene for asthma, and is close to completing his work on it. Completing the asthma project would put Dr. Chung in an excellent position to apply for a faculty post and qualify for a grant under a newly announced federal program. W; working with Dr. Roberts means that he must set this work aside. Dr. Roberts tells Dr. Chung that if he joins in the Arthrid project, Arthrid, Inc.the company will issue him shares of Arthrid common stock equal to 2% and also pay him a generous consulting fee. In addition, Dr. Chung would continue to receive his postdoctoral stipend.

Dr. Chung is already somewhat annoyed that Dr. Roberts is spending so much time at the Arthrid labs. He; he is not receiving the supervision for his asthma project from Dr. Roberts that he feels he needs. Westfield University Medical School allows a faculty member to spend 20% of his/ or her time on outside commitments. , and Dr. Roberts is spending about 12-15 hours a week at the Arthrid labs. As Since Dr. Roberts works closer to 60 hours a week (she always works on the weekends and takes work home every night), she does not feel that her time away from the Medical medical School school is excessive. Furthermore, this time away from her medical medical-school lab allows her to work on the therapeutic molecule using laboratory equipment at Arthrid, Inc. that which her own lab lacks.

Meanwhile, Dr. Frank Bonita, a colleague of Dr. Roberts’, asks Dr. Roberts for a small quantity of a reagent that has been used in the lupus drug research. Drs. Bonita and Roberts were students together, entered the department at the same time, and have openly discussed with each other all their research for many years, and are goodbest of friends. Each has been indispensable in the research success of the other. The secrecy covenant in the Westfield-Arthrid contract now prevents Dr. Roberts from granting what would otherwise be Dr. Bonita's routine request for a reagent. Dr. Bonita wonders whether Dr. Roberts acted prudently in so restricting herself.

The IRB will meet soon to review Dr. Roberts' proposal to study the new drug at Westfield University Hospital. The IRB chair has been informed by the Dean dean of the Medical medical School school how important this proposal is for the Medical medical School school and so informsmakes the IRB members aware of this.

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This case raises a number of issues with which the research community must grapple.

Some issues to consider include (but are not limited to):

1. What is a conflict of interest? How many conflicts of interest can you find in this case?

How would you classify them?

2. Why does a conflict of interest matter? Why should the University university be concerned?

3. Should Westfield University Hospital undertake the clinical drug trial? If so, should Dr. Roberts participate?

4. Does it matter if Dr. Roberts’ financial interest in Arthrid, Inc. consists of consulting fees, or common stock (equity), or both?

5. Should Dr. Roberts recommend to her patients that they enroll in the clinical trial if it is carried out at Westfield University Hospital? What about elsewhere?

6. Is Dr. Roberts being faithful to her obligation to provide an educational experience for Dr. Chung?

7. Is Dr. Roberts acting properly in the way she chooses to allocate her time? Is this in violation of Westfield University Medical School policy?

8. How should Dr. Roberts respond to Dr. Bonita's request for the reagent?

9. What are the implications of the Arthrid-Westfield non-disclosure agreement for academic freedom?

______________________________________________________________________________

Think about the following questions for Dr. Roberts, her Departmentdepartment, and the Medical medical Schoolschool.

Which do you think pose insurmountable conflicts that could jeopardize scientific objectivity

or even potentially harm patients?

1. The Medical medical Schoolschool, the Departmentdepartment, and Dr. Roberts retain their share in the patent and

embark on a joint venture with Arthrid, Inc. to manufacture the drug. If the drug is useful and gains FDA approval, the profits will be used to fund the laboratory, that and would include salary support for Dr. Roberts.

In this scenario, what problem, if any, would there be if Dr. Roberts organized and participated in the clinical trial?

2. If Dr. Roberts believes that any connection with a commercial enterprise such as Arthrid, Inc. threatens the objectivity of her science, she could recuse herself from serving as Principal the principal Investigator investigator in the clinical trial. Without her participation, neither her laboratory nor the medical School school can claim any of the profits from the development of the drug. What options do Dr. Roberts and the Medical medical School school have to promotein promoting objectivity in this promising research?

3. What difference would it make if there were an Internal internal Review review Committee committee (scientists and others from the same Laboratory laboratory and Schoolschool) or an External external Review review Committee committee (scientists and others from outside the Medical medical Schoolschool) who that would monitor the clinical trial?

4. The IRB is under some pressure to approve the proposal submitted by Dr. Roberts so that the clinical trials can begin. What role, if any, should the IRB play in determining if whether Dr. Roberts has a conflict? Is there a problem if some IRB members have equity interests in Arthrid? If yes, what is the appropriate course of action?

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[1]“Lupus is an autoimmune disease in which the immune system attacks normal tissues in the body. The most common symptoms of lupus are fever, rash, and arthritis. Women tend to develop lupus more commonly than men, and people of African descent develop lupus more commonly than people of European descent.” [from From WebMDHealth , accessed 5/6/03.]

[2]Currently, there is no cure or effective treatment. Many molecules are being tried, in the hope that they will to lead to an anti-inflammatory response.

[3]Insert chart here that demonstrates how federal funding is rising but not as fast as the private pharmaceutical industry.

[4]Arthritis and lupus are both autoimmune diseases, so the mechanism that is effective for one, may also benefit the other.

[5]Before 1980, the federal government owned the rights to all of the research discoveries of the investigators it funded. In a Additionally, researchers and biotechnology firms in the ‘for-profit sector’ found it difficult to obtain a license to manufacture and market these discoveries. Clearly, the research enterprise was not thriving. Congress realized that the federal government was not nurturing its investigators and that it was in the public interest to bring innovative products into clinical practice without unnecessary delays. To remedy this situation, in 1980, Congress passed the Bayh-Dole Act.

The Act act permits the recipients of federal monies moneys to obtain the title to the inventions they developed while they were supported on the federally funded projects, and also to transfer the technology to the private sector.

The Act act further requires that if federally funded researchers obtain a patent, they are required to seek commercial opportunities and send in reports to the federal funders reports on how their discoveries are being used.

Of course, this also enables universities to benefit significantly also from the shared royalties.

This The act act has been a tremendous boon, especially to universities that now encourage, and even exhort, their faculty members to apply for patents for their discoveries.

The unintended consequences of the Bayh-Dole Act were to create potential as well as actual financial conflicts of interest.

[6]Equity is ownership interest in a corporation in the form of common stock or preferred stock. [from From , accessed 5/4/03.]

[7] The Institutional Review Board (IRB) is mandated by the federal government (45CFR46) to review all research involving human subjects/ and participants. The IRB ensures that the rights and welfare of the human participant are protected and that the research is conducted in an ethical manner. The IRB weighs the risks and benefits to make certain that the benefits outweigh the risks to the participants.

[8]A patent is a property right, granted by the United States and by other nations, which that gives the holder the exclusive right to exclude others from the manufacture, use, or sale of the invention. Under the General Agreement on Tariffs and Trade (GATT), the patent property rights exist for a period of 20 years from the date of application.

Patent property rights may be sold, assigned, pledged, mortgaged, licensed, willed, or donated and may be the subject of contracts and other agreements.

The owner has the opportunity to profit by the manufacture, sale, or use of the invention in a protected market or by charging others for making or using it.

Patents provide leverage in the market, that which results in profit margin.

Patents are a license to file suit.

Products must have a significant (factor of 10) advantage in cost, manufacturing, marketing, or performance to be commercially viable.

Patent rights to intellectual properties created in the process of federally sponsored research programs are usually retained by the contracting organization. The federal government retains

the rights to royalty royalty-free use for government purposes.

[From the University of Texas at Arlington ,

accessed 5/4/03.]

[9] Royalty A royalty is a payment made for the use of property, especially a patent, copyrighted work, franchise, or natural resource. The amount is usually a percentage of revenues obtained through its use. [from From < >, accessed on 5/4/03.]

[10] Angell M., Relman A S. America’s Other Drug Problem. The New Republic, December 16, 2002, pp. 27-41.

[11]A Non non-disclosure agreement is a contract that restricts the disclosure of confidential information or proprietary knowledge under specific circumstances. Non-disclosure agreements are often signed by companies discussing a potential partnership.

[12] For approval of a new drug, the FDA requires a series of clinical studies to document the safety and efficacy of the new drug. These studies are conducted in three phases.

• In Phase I clinical studies, healthy human volunteers are given a new drug under controlled escalating conditions to determine tolerance, adverse effects, dose, and pharmacokinetics. Dosages start low and escalate are increased until adverse effects occur.

• In Phase II clinical trials, patients with the targeted disease are enrolled to further determine safety and efficacy and to establish a therapeutic dose regimen. The studies will often simultaneously enroll a control group to measure and compare levels of effectiveness, safety, and adverse adverse-events rates.

• In Phase III clinical trials, the emphasis shifts to questions of efficacy, again evaluating the new drug in patients suffering from the condition or disease that the drug seeks to treat. These are often large-scale multicenter clinical trials with many participants enrolled, often in a randomized placebo-controlled double-blinded study. In these studies, one arm receives the active experimental drug and the other arm a placebo. Assignment to each arm is random, and neither the study participant nor the researcher knows the individual’s assignment.

• In Phase IV studies: A, after a new drug has been approved and distributed to the public, data are collected for regulatory and product product-safety concerns. Phase IV studies are known as post-marketing research.

[adapted Adapted from The Pharmaceutical Industry and New Drug Development, in Introduction to Good Clinical Practices: Course Workbook, Columbia University, Office of Clinical Trials. New York: Columbia University, 1998. , pp. 24-27.]

[13] Common stocks are securities representing equity ownership in a corporation, providing voting rights, and entitling the holder to a share of the company's success through dividends and/or capital appreciation.

[From , accessed 5/4/03.]

[14] A multi-center clinical trial is conducted at more than one site and may include multiple sites.

[15] See Footnote 7.

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