No Mischief Here: Managing a Conflict of Interest
A Compliance Case Study
The People:
Dr. Florinda Alvarez – A celebrated professor and researcher in VCU’s Department of Psychiatry. She also owns a company called Hypnoloos which includes a hypnotherapy program to help morbidly obese people lose weight and develop healthy habits.
Dr. Sami Morton – VCU School of Psychiatry Department Chair
The Scenario:
Dr. Alvarez was walking to Dr. Morton’s office to discuss an upcoming research study. On the way there, she replayed the events of recent weeks in her head:
Three years ago, she had created the company Hypnoloos, and as the founder and CEO, she had experienced some financial success. She had also found that helping people become more healthy was quite gratifying. Her continued research into psychiatric intervention of morbid obesity led to her application for an NIH (National Institute of Health) grant to measure which types of interventions were the most successful. Her company, Hypnoloos, was also seeking to bid for a contract related to the study which involved companies who could supply various interventions for study, including hypnotherapy.
When her team at Hypnoloos suggested that they bid for the contract related to the research study, Dr. Alvarez was ready to apply, but then she realized that since she was the CEO of Hypnoloos, it might look like she was trying to benefit by throwing her company’s hat into the ring as a possible contractor. She discussed it with her department chair who suggested that they disclose the conflict to OVPRI (Office of the Vice President for Research and Innovation). That’s what led to the meeting she was getting ready to attend.
“Come in!” called Dr. Morton as Dr. Alvarez knocked on the door. “Florinda! How are you?” she asked, as she motioned for Dr. Alvarez to take a seat. She opened a folder, pulled out some forms and placed them on the table.
“I’m good! Did we hear back?” asked Dr. Alvarez.
Dr. Morton smiled. “Yes, we did!”
“Well…What’s the verdict?”
“They agree that you have a conflict,” explained Dr. Morton. “ While generally you may not have a contract with VCU through an entity you own when you are a current employee, there are some exceptions that fit your situation. Since your company’s participation increases competition for the bid process, given the unique requirements, the Conflict of Interest in Research Committee has created a conflict of interest management plan – (reading from the form in front of her) ‘This management plan is intended to address the conflict of interest identified in the above-referenced research project,’ etc. Basically, since Hypnoloos is planning to bid, there are some rules you and the research team need to follow to prevent the impression that you are influencing that process or benefitting from that in some way.”
“Okay,” said Dr. Alvarez, “Rules like what?”
“Well,” began Dr. Morton, “Since you are the PI (principal investigator) of the study and the CEO of Hypnoloos, you’ll need to disclose your relationship to the company, and state that you have a financial and ownership interest in it. You’ll need to disclose this to personnel working on the study, and when you present the informed consent form to prospective participants. You’ll also need to disclose the relationship when you publish or present research associated with the study.”
“So it’s about being transparent.”
“Exactly,” agreed Dr. Morton. “Now, there are a few rules regarding the procurement process and the performance period of the project, should Hypnoloos be selected to participate. Basically, during the selection process, you won’t be able to communicate with the Procurement Department while they’re accepting bids; you’ll need to designate a principal from Hypnoloos to do that, instead. Do you have anyone in mind for that role?”
“Actually, I do. I think my CFO Martin Franks would be a great choice,” replied Dr. Alvarez.
“Excellent! Now, should Hypnoloos win the bid and begin participating in the study, you’ll need to follow some rules to protect the integrity of the research. First, while you are on the VCU timeclock, teaching and advising students, you can’t conduct any work for Hypnoloos. Likewise, while the study is underway, you cannot perform more than 8 hours of work for Hypnoloos per week, and then only when permission has been granted. Finally, your department chair will provide a second review for any work product provided by Hypnoloos for the study to ensure objectivity,” explained Dr. Morton.
“Wow,” said Dr. Alvarez, “This plan is pretty specific.”
“It has to be. And one more thing, once you sign off on this management plan, it needs to be approved by the OVPRI and President Rao. Once we get those signatures and we get your principal from Hypnoloos on board, your bid can be submitted to Procurement.”
“Okay!” said Dr. Alvarez, “Listen, Sami: Thanks for taking the time to go over this with me. I’ll ask Martin if I can designate him as the principal from Hypnoloos, and I’ll look over the rest of the contract and sign it and bring it back tomorrow. How does that sound?”
The Takeaway:
Many people think that having a conflict of interest is a negative thing. The truth is, it could be – if you enter into a relationship where your interests don’t align with the university’s. But most of the time, when you disclose the conflict to your supervisor, they will simply document it. They may ask you to describe the conflict in an email that they keep on file, or, in the case of Dr. Alvarez, the university may need to assist you by creating a conflict of interest (COI) management plan.
COI management plans protect you and the university in the event that questions are asked about the conflict. If that happens, because we will have prepared and taken steps to ensure that nothing unethical was going on, all parties will be protected. So, while it may seem counter-intuitive, it’s always best to disclose a conflict. Having a conflict management plan isn’t about saying “mischief managed;” it’s about saying, “There’s no mischief here!”
If you’d like to find out whether your situation qualifies as a conflict of interest, or get some advice on how to disclose your conflict, please contact the Integrity and Compliance Office. We’d be happy to discuss it with you! (804) 828-2336 or ucompliance@vcu.edu.
This case study is based on an actual case investigated by the Integrity and Compliance Office. The names, department and details have been changed to protect the people involved in the case.