Policy No: 2058 Responsible Office: Research and Economic Development Last Review Date: 04/28/2022 Next Required Review: 04/28/2027
Institutional Conflict of Interest
This policy is established to provide appropriate institutional safeguards to sustain an environment where sponsored projects, dedicated gifts, research, scholarship, entrepreneurial endeavors, and technology transfer are carried out responsibly, and in so doing, foster a culture of transparency and integrity. The goal of this policy is to raise awareness of the issues and situations that should be disclosed, reviewed, and managed on behalf of the University by the individuals who serve as its leaders and administrators.
The University engages in relationships with a range of companies that may lead to financial benefit for the University in many forms, including royalty payments, other payments and equity from licensing intellectual property, sponsored education and research agreements, dedicated gifts, and purchasing. Relationships with commercial entities are generally part of customary educational, research, and business activities and, consequently, will lead in some cases to conflicts of interest. Given the scope of University activities, the variation in its relationships, and the pursuit for the University to act as good stewards of its funds, it is inherent that University relationships and potential institutional conflicts of interest are unavoidable. The intent of this policy is not to restrict or discourage such relationships, but rather to manage them so they do not compromise, or reasonably appear to compromise, the safety and integrity of the University’s mission.
This policy applies to employees of all divisions and affiliates of the University of South Alabama (the “University”), including, but not limited to, USA Health, USA Health Physicians Group, USA Health University Hospital, USA Health Children & Women’s Hospital, USA Health Mitchell Cancer Institute, University of South Alabama Health Care Authority, and USA Healthcare Management, LLC. This policy concerns conflicts that arise from the University’s financial relationships with external entities. The University must conduct its business free of improper influence resulting from external, institutional financial relationships.
Covered Individuals: For purposes of this policy, Covered Individuals include those administrators who are in a position to make or significantly influence decisions on behalf of the University involving the following:
• The use of University resources, including decisions involving expenditures, purchasing, investments, equity, and technology transfer;
• The conduct of research, and in particular, research involving human subjects;
• The execution of grants and contracts; or
• The licensing of University intellectual property to external parties.
Based on the foregoing, Covered Individuals include, but are not limited to:
• University President;
• Board of Trustees;
• University Vice Presidents and Associate/Assistant Vice Presidents;
• Deans, Vice/Associate/Assistant Deans; and
• Department Heads.
Equity: An interest in a business consisting of any stock, stock option, or similar ownership interest in such business.
External Entity: Any entity or business that is not the University, a division of the University, or entirely controlled and owned by the University.
Institutional Conflict of Interest: A situation which arises when financial interests of the University, or of a University official acting within his/her authority on behalf of the University, may influence or appears to influence the research, education, clinical care, business transactions, or other activities of the University.
4. Policy Guidelines
While there is no inclusive list of Institutional Conflicts of Interest, some situations naturally create potential and actual institutional conflicts. The following list is offered to illustrate situations which require scrutiny:
• The University has a financial or business relationship with an external entity, and that entity seeks to influence the award or terms and conditions of a University contract, the direction, review or dissemination of research, or the allocation of resources;
• A decision on behalf of the University about a financial or business relationship with an external entity may directly affect a Covered Individual’s personal financial interest in that external entity;
• The University holds a financial interest in an external entity, and the University makes decisions regarding the financial and business relationship with that external entity which directly affect its own financial interest in that entity;
• A Covered Individual is appointed to serve as an officer, director, or board member of an external entity that has financial or business relationships with the University;
• The University invests funds with an external entity, and Covered Individuals approving the investment have a personal financial interest in the external entity.
4.1 Areas of Increased Risk for Institutional Conflict of Interest
Institutional financial conflicts of interest can occur in various contexts, but generally they concern the University and the public if they have a significant potential to compromise the University's mission, regardless of the field or context.
Institutional Conflicts of Interest consist of the following types:
• Potential Conflict of Interest involving the University’s equity holdings, or a royalty arrangement related to Sponsored Programs, and;
• Potential Conflict of Interest involving Covered Individuals who make decisions with institutional-wide implications.
4.1.1 University Intellectual Property
The University has a legal duty to manage its intellectual property. In accordance with University policies, the University has the authority to license and receive compensation for its intellectual property. In certain cases, the entity licensing the intellectual property may have other research, financial, or business relationships with the University that could raise a conflict.
For example, institutional conflicts of interest may arise when an entity both licenses University intellectual property for a commercial purpose and also sponsors University research on the intellectual property at issue. When the University is conducting research on its own intellectual property, such research and related findings may also be subject to challenge. Even when the individual researcher does not have a financial interest in the intellectual property, the knowledge that the University, campus, or research laboratory stands to gain financially from successful development of a licensed technology can influence the direction of related research or other University or campus activity, the objectivity of research, the dissemination of results, and the allocation of resources among competing projects and activities.
220.127.116.11 Equity and Licensing Arrangements
The University owns stocks and other forms of equity in companies as part of its investment holdings and endowment portfolio. A potential institutional conflict of interest may occur when the University licenses an invention to an entity that also has a financial or business relationship with the University. For example, such conflicts of interest may arise if the University has obtained a significant ownership interest or an entitlement to significant equity in a company that is (i) the sponsor of research at the University, or (ii) the manufacturer or distributor of a product that is either studied or tested in research at or under the auspices of the University, or based at least in part on technology developed at the University. Direct investments by the University or its management company in University-related start-up companies warrant scrutiny to ensure that no violations of this policy occur as a result of such investments.
The Vice President for Research and Economic Development, in consultation with other University administrators, is responsible for putting in place and maintaining appropriate office policies and procedures to oversee the strategies under which the Office of Commercialization and Industry Collaboration negotiates equity positions in licensing agreements consistent with the University’s equity policy.
4.1.2 Gifts from Companies
Potential conflicts may arise when a company that has a financial or business relationship with the University also makes a gift to the University. Such a conflict of interest may arise if the University is offered or has received significant gifts (including, but not limited to, gifts in kind, discounts, fellowships, and unrestricted educational grants) from a company or a foundation established by or closely affiliated with a company that is (i) sponsoring or offering to sponsor research at the University, or (ii) the manufacturer or distributor of a product that is either studied or tested in research at or under the auspices of the University, or based at least in part on technology developed at the University.
A vendor or potential vendor also has a financial or business relationship with the University. A conflict of interest, or the appearance of a conflict of interest, may arise in purchasing situations when a Covered Individual has a financial, personal, or business interest in a vendor whose products or services are considered for purchase.
4.1.4 Covered Individuals with Personal Conflicts of Interest
Due to supervisory and institutional decision-making functions, Covered Individuals encounter conflict of interest situations beyond those confronted by most faculty or other administrators, as they may be in a position to influence University-wide policies and decisions. For this reason, their business and financial relationships with external entities shall be disclosed to prevent any real or perceived institutional conflicts of interest.
4.1.5 Human Subjects Research
Research involving human subjects requires additional oversight because of the potential to compromise the health or safety of human subjects. The financial interests of a Covered Individual must not affect, or reasonably appear to affect, the design, conduct, reporting, review, or oversight of human subjects research carried out in department(s) over which the Covered Individual has authority or with University resources under his/her direct oversight.
Disclosures should be filed on a case by case basis using the Institutional Conflict of Interest Disclosure form. Due to the variety and complexity of University activities, no set of guidelines can anticipate and deal with all possible scenarios. Therefore, a major responsibility for those who represent the University is to: (1) disclose conflict of interest situations when they arise, whether potential, apparent, or actual, and (2) seek direction at the appropriate levels on how to manage the situation appropriately.
5.1 Identify and Disclose the Potential Conflict
Potential Institutional Conflicts of Interest will be identified when Covered Individuals report financial interests in an external entity conducting business with the University in an area over which that Covered Individual has direct supervision or decision-making responsibilities. Reports should be disclosed and documented by completing the Institutional Conflict of Interest Disclosure form and reviewed by the Covered Individual’s supervisor. As such, reports that involve fiscal or human resource matters must be disclosed to the Vice President for Finance and Administration and research-related activities to the Vice President for Research and Economic Development. Potential Institutional Conflicts of Interest may also identified by employees or other individuals who are concerned about possible Institutional Conflicts of Interest and who report those situations to their supervisors or other appropriate University officials.
5.1.1 Royalties and Other Income
Researchers conducting human subjects research will be asked when completing IRB applications if the proposed study evaluates, directly or indirectly, a University invention. If so, a copy of the application is reviewed by the Office of Research Compliance and Assurance. If warranted, the potential Institutional Conflict of Interest will be elevated to the designated vice president for review. The Office of Commercialization and Industry Collaboration, in preparation of exclusive license or option agreements, checks information about research sponsors, vendors, and gift donors to determine if the potential licensee or start-up company also has other types of financial or business relationships with the University.
5.1.2 Start-ups and Equity Interests
For Institutional Conflicts of Interest that could arise when the University is negotiating a possible equity interest in a start-up company, such conflicts will be identified when the Office of Commercialization and Industry Collaboration is developing agreements with the new company. If it is likely that the new company may sponsor research at the University that involves human subjects, there is no financial threshold. Sponsored Projects Administration will be the point of contact for information on current and potential research projects.
For conflicts that could arise when the University already holds equity in a company, the University typically avoids risks associated with this type of Institutional Conflict of Interest by separating equity information and decision-making from the research enterprise. Employees in the position to directly influence research, teaching, or other activities do not make decisions regarding these equity interests.
Purchasing staff may identify potential Institutional Conflicts of Interest as they participate in or review purchasing decisions. They refer the potential Institutional Conflict of Interest to the Director of Purchasing, who elevates the matter to the designated vice president for review. Employees or other individuals concerned about possible Institutional Conflicts of Interest in the purchasing context should report situations to University officials.
Identify the potential conflict:
• Through disclosures by Covered Individuals. Potential Institutional Conflicts of Interest may arise if a Covered Individual’s department or area received a gift from a company that also sponsors research or supplies equipment or services to his or her department or area of oversight;
• Through disclosures by other employees. Other employees of the University may report gifts possibly giving rise to an Institutional Conflict of Interest to University officials.
5.1.5 Human Subject Research
A Covered Individual must disclose his/her direct financial interests in an external entity that is sponsoring human subject research or if the Covered Individual has a financial interest specific to intellectual property that is the subject of human subject research. Direct financial interests include:
• Equity holdings that are held directly by the Covered Individual, or his/her immediate family, but excluding (a) mutual funds for which the individual has no control over the investment decisions of the fund, and (b) equity accounts or interests that the Covered Individual does not actively manage;
• Royalties (whether paid through the University or through another source); and
• Payments for consulting, board service, or other services and any other financial relationship that involves funds passing from the external entity to the Covered Individual.
5.1.6 Board of Trustees
Members of the Board of Trustees are governed by bylaws such that Article VI of the Bylaws of the Board of Trustees of the University of South Alabama contains conflict of interest policies to assist Board members in identifying, disclosing, and minimizing Institutional Conflicts of Interest. These bylaws are accepted as policy for purposes of compliance with this Institutional Conflict of Interest Policy.
5.2 Review the potential Institutional Conflict of Interest
Areas that involve fiscal or human resource matters are reviewed by the Vice President for Financial Affairs and for research related activities, by the Vice President for Research and Economic Development. The respective designated vice president is responsible for evaluating the risk of an Institutional Conflict of Interest and consulting with individuals and offices as necessary. In the event of an Institutional Conflict of Interest or any unresolved situations, the review will be elevated to the Office of Compliance. This review will include determination of whether a management plan is appropriate and necessary. Additionally, the designated vice president will implement and monitor post-approval compliance with the determination of the Office of Compliance. The designated vice president will share all reports of Institutional Conflicts of Interests to the President and the Office of Compliance on an annual basis.
5.2.1 Review Criteria
Reviews must consider whether the financial or fiduciary interests disclosed in accordance with this policy affect or may potentially affect any of the following:
• Safety of human research subjects;
• Safety of patients;
• Integrity of research;
• Appropriate allocation of resources;
• Objectivity and independence of educational activities, including undergraduate, graduate, post-graduate, and continuing education; and
• Objectivity in business and contracting decisions.
5.3 Recommendation Process
The designated vice president review of a specific case may result in one of four recommendations:
5.3.1 No Institutional Conflict
In cases resulting in a finding that there is no actual, potential, or perceived Institutional Conflict of Interest, the designated vice president must communicate his/her decision to the appropriate individual(s) responsible for the activity and any Covered Individual whose interest was at issue.
5.3.2 Manageable Institutional Conflict of Interest
In cases that the designated vice president considers the potential Institutional Conflict of Interest manageable, a recommendation of one or more management measures will be provided. Examples include, but are not limited to: (1) effective recusal from decision-making regarding the proposed arrangement by the financially interested Covered Individual and disclosure of the recusal to the appropriate individuals to implement the recusal; (2) reduction in the magnitude of the financial interest; (3) disclosure of the financial interest in relevant publications, presentations, human subject consent forms, clinical procedure or other consent forms, educational material, etc.; (4) oversight by a disinterested senior individual or committee; and/or (5) other measures as deemed appropriate.
5.3.3 Institutional Conflict of Interest in Human Subject Research
Primary consideration will be given to potential impact on the safety and welfare of human research subjects. In addition, the potential impact of real or perceived Institutional Conflicts of Interest on the integrity or credibility of research data that could affect future clinical use will be considered carefully. As appropriate, the designated vice president review will be coordinated with and provided to the University’s Institutional Review Board and Office of Research Compliance and Assurance for their consideration in exercising their responsibility for the protection of human research subjects.
5.3.4 Unmanageable Institutional Conflict of Interest
In cases where the Institutional Conflict of Interest is considered not manageable, the designated vice president will report his/her recommendation to the appropriate recipient of the recommendation with written justification. In cases judged to involve an unmanageable Institutional Conflict of Interest , it is expected that the designated vice president will make recommendations to eliminate conflicting financial interests, where practical, in ways that do not compromise the proposed research, professional, business transaction, or educational activity. Generally, the University should give precedence to activities that carry out the University’s mission over conflicting financial interests.
Any Covered Individual or employee who has concerns about the legitimacy of any relationship or activity on behalf of the University or its employees involving an external relationship should consult with his/her immediate supervisor or with the Office of Compliance. If after examination of the situation it is determined that a potential Institutional Conflict of Interest exists or the circumstances pose a concern for public perception of an Institutional Conflict of Interest, the matter should be referred to the appropriate vice president depending on the nature of the potential Institutional Conflict of Interest.
Any act of retaliation or reprisal against an individual for reporting in good faith a potential Institutional Conflict of Interest or violation of this policy shall be a violation of this policy. Such violations will be dealt with through the regular administrative process for violation of University policies.