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V. Conflict of Interest

  1. Current Policies, Laws, and Regulations

    1. State laws and regulations governing private-sponsored grants, contracts, and gifts

      1. define financial interest as one or more of the following held in the company sponsoring the grant or other activity in the previous 12 months by the employee or employee's spouse or dependent children:

        1. income exceeding $250
        2. direct or indirect equity interest exceeding $1,000 or 10%, whichever is lower
        3. received or promised gifts aggregating $300 or more in value
        4. a director, officer, partner, trustee, employee, or holder of a management position

      2. require that

        1. the employee identified as "principal investigator" disclose financial interests that the employee,
        2. employee's spouse, and/or employee's dependent children have with the private sponsor or donor;
        3. the University conduct an independent substantive review of such disclosures to determine if the financial interest might reasonably appear to be affected by the sponsored project.
        4. if the principal investigator has a financial interest that exceeds any of the standards in V.A.1.a. above, the University either manage or eliminate the conflict.

    2. Federal regulations governing NIH and NSF sponsored projects

      1. define significant financial interest as anything of monetary value held or received by the employee or the employee's spouse or dependent children in the past 12 months, including but not limited to:

        1. income from a single business exceeding $10,000 in one year
        2. equity interest exceeding 5% ownership interest or $10,000 in value
        3. a management position such as board member, director, officer, partner, or trustee
        4. intellectual property interest held on a patent, patent application, or a copyright of software assigned to a party other than UC

      2. define relatedness as being "when the work to be performed under the sponsored project and the results of the work would reasonably appear to affect the investigator's significant financial interests."

      3. require that

        1. University employees responsible for the design, conduct, or reporting of NIH or NSF sponsored projects disclose significant personal financial interests related to the projects;
        2. the University conduct an independent substantive review of such disclosures to determine if the interest might reasonably appear to be directly and significantly affected by the sponsored project; and;
        3. if a researcher on the project has a financial interest that exceeds any of the standards in V.A.2.a. above, the University either manage, reduce, or eliminate the conflict.

    3. The Federal Food and Drug Administration has numerous regulations regarding clinical trials and these must be rigorously adhered to.

    4. Other California Law:

      1. requires that all University employees and officers disqualify themselves from participating in a University decision when a financial conflict of interest is present;

      2. does not permit University employees to receive personal gifts and gratuities which aggregate to $300 or more in a 12-month period from a single person or organization engaged in business transactions with the University.

    5. Other University of California Policy:

      1. prohibits the purchase of goods or services from a University Officer, employee, or near relative unless a specific determination is made that the goods or services are not available otherwise;

      2. requires officers and employees to avoid the appearance of favoritism in all of their dealings on behalf of the University;

      3. does not permit University facilities to be used for tests, studies, and investigations of a purely commercial character, except when it is shown conclusively that satisfactory facilities for such services do not exist elsewhere; (Regulation No. 4);

      4. requires that employees who receive any part of their salary through the University, or whose activities use any University resources or facilities, submit their proposals for extramural support through the University, and that awards be made to The Regents.

  2. Committee Recommendations to Help Clarify or Modify Current UC and UCSD Policies and Practices

    1. Definition

      Significant Financial Interest is defined in this report as one or more of the following held or received in the previous 12 months by the researcher or the researcher's spouse or dependent children:

      • annual income in excess of $10,000 from a company
      • equity interest of more than 5% or $10,000 in a company
      • management responsibility in a company

      This threshold is used in the recommendations in this report unless stated otherwise.

    2. University Projects Sponsored by Private Companies

      1. For UCSD researchers serving as Principal Investigators on contracts, grants, and gifts from private companies, the disclosure limits are outlined in V.A.1. Above While all disclosures will be reviewed by the University, it is of special concern when a UCSD researcher has a Significant Financial Interest. The University will not accept contracts, grants, and gifts when one or both of these amounts are exceeded or a management position is held. However, the University may decide to make an exception if warranted by the facts and circumstances. In making such a decision, the University will be guided by the principles for UCSD-industry interactions given in Section III of this report and consider factors which include but are not limited to the following:

        1. relationship of the project to the teaching, research, and public service mission of the University of California;
        2. expected benefit to UCSD and the public;
        3. nature and extent of the researcher's involvement with the company, including the amount of equity, annual income, and management responsibility of researcher, researcher's spouse, and the researcher's dependent children in the company;
        4. nature and extent of student involvement in the proposed UCSD project and with the company, and the positive and negative contributions to the student's educational program and timely progress to the degree;
        5. nature and extent of involvement by postdocs and other UCSD employees (both academic and staff) in the proposed UCSD project and with the company;
        6. ability of the University to supervise the activity and manage the conflict.

        If approved, the University may require one or more of the following management strategies: supervision by an ad-hoc committee, notification to the company regarding the conflict and limitations, disclosure of the relationship on all publications and public presentations (including oral and poster presentations at meetings), divestment of equity to a manageable amount, appointment of another PI to the project, suspending work at the company while working on the project, and other strategies that may be deemed appropriate.

      2. A researcher who is working on a research project sponsored by the Industry-University Cooperative Research Program, or other UC grant programs with significant industry participation, or on a research project sponsored by a company with federal SBIR or STTR funds may not have a Significant Financial Interest in any companies that are partners in the project. The University may consider exceptions to this rule after review of the principles for University interactions with Industry and the factors in V.B.2.a. Above

      3. A UCSD researcher may not conduct clinical trials at UCSD—or serve on a committee overseeing the conduct of such trials—which are funded by a company in which the researcher (or immediate family member) has a Significant Financial Interest. The University may consider exceptions to this rule after review of the principles for UCSD-industry interactions, the factors in V.B.2.a. (page 16) and guidelines of the Federal Food and Drug Administration

      4. A UCSD researcher may provide services to a company through a service agreement with UCSD under the following conditions, providing such researcher has no financial interest or management responsibility in the company, including, but not limited to ownership of stock or other equity, receipt of income through consulting or other means. The University may consider exceptions to this rule after review of the principles for University interactions with industry and the following factors:

        1. relationship of the project to the teaching, research, and public service mission of the University of California;
        2. nature and extent of the researcher's involvement with the company, including amount of equity, annual income, and management responsibility of researcher, researcher's spouse, and researcher's dependent children in the company;
        3. ability of the University to supervise the activity and manage the conflict.

        The following conditions automatically would be applied to any approved exceptions:

        1. Full costs of the services are recovered.
        2. The services are available to any company.
        3. The services are highly specialized.
        4. No graduate or undergraduate students are involved in providing the services as part of their academic program of study.
        5. The services are not within the scope (i.e., not a natural or anticipated extension) of the researcher's ongoing UCSD research program.
        6. The company specifies and directs the protocol/statement of work.

      5. Unpaid leave for a researcher with funding from a company for his/her UCSD research program may be approved for full or part-time employment at the company, providing an equitable arrangement is made between the University and the company for intellectual property rights, etc., and the University, after reviewing the considerations in V.B.2.a. (Page 16), believes any conflict of interest can be managed. Also see recommendations on conflict of commitment (pages 11-13).

    3. Federal Grants

      1. Consistent with current federal regulations, the following are examples of Significant Financial Interests which are considered "related" to a federally sponsored project:

        1. The UCSD researcher is carrying out a project and the results of that project would be relevant to the development, manufacturing, commercialization, or improvement of any drug, device, procedure or other products or services of the company in which the researcher has a Significant Financial Interest.
        2. The UCSD researcher has a Significant Financial Interest in a company which might manufacture or commercialize a drug, device, procedure, or any other product used in the project, or that will predictably result from the project.
        3. The UCSD researcher has consulting income from a single company that exceeded $10,000 during the prior twelve months, and the financial interests of that company, or the researcher's financial interests related to consulting for that company, would reasonably appear to be affected by the research.
        4. An assessment of which, if any, of the researcher's financial interests related to consulting (or which, if any, of the financial interests of the company to which the researcher consults) would reasonably appear to be affected by the proposed research may be made by the researcher based on his or her academic expertise in his or her professional field; those interests are to be reported if they exceed the reporting threshold of $10,000 from a single company during the prior twelve months.
        5. The UCSD researcher has a Significant Financial Interest in a company and the sponsored project proposes to subcontract a portion of the work, or lease property, or make referral of participants to, or make purchases from the company.
        6. The UCSD researcher has a Significant Financial Interest in a company that is part of a consortium or that will otherwise participate in the sponsored project.

      2. Financial interests which are not related to the sponsored project do not need to be disclosed.

    4. General University Policies
      (Independent of whether UCSD receives external funding for the researcher's program)

      1. Within the 39/48/52 day limit on outside professional activities, a UCSD researcher may engage in professional activities with companies that conduct research in the same or similar areas as the researcher's UCSD research program. Allowable activities may include general consulting, performing research, directing research, and lecturing, provided that these activities do not result in

        1. disclosure of University proprietary data,
        2. transfer of University intellectual property, including any research data and findings from the researcher's University research program that are not in the public domain,
        3. multiple compensation for the same work,
        4. decision-making on University research issues in the interest of a third party.

      2. UCSD researchers are not to enter into consulting agreements that create a conflict with University policies and are encouraged to include in consulting agreements language that acknowledges that the researcher is subject to the University's intellectual property and consulting policies.

      3. UCSD will not subcontract work to a company when the PI or other researcher on the project (or immediate family member) has a Significant Financial Interest in the company. An exception can be considered when no other entity, including the University, can perform the work.

      4. A researcher may not use in a UCSD research program a device that is owned by and requires payment of a usage fee to the researcher or to a company in which the researcher has a Significant Financial Interest. An exception can be considered when the device is both unique and critical to the performance of the research. If approved, the conflict would be managed by a University conflict of interest ad hoc committee.

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