Case 9a :

CoI- What is a Financial Conflict of Interest (FCOI)?

Karl, a tall, aggressive, very accomplished researcher, is just joining Sharon's new team. Unfortunately, Sharon is finding that Karl can be a bit difficult. For example, just this morning, Karl stormed brusquely into her office and announced, in a matter of fact tone,

"Just because I can make money from my research does not mean that I am somehow unethical. There's nothing wrong with making money".

Sharon replied calmly,

"No one is saying that you are unethical, Karl, it is just that this grant requires us to declare if we have any 'significant financial interests'".

Karl queried hurriedly, leaning forward aggressively,

"And, just what is a 'significant' financial interest? Is this agency saying that the more money we make the worse people we are?".

Sharon stood calmly and stated sternly,

"No, Karl, this is not an attack. Here is the definition of significant financial conflict of interest. Please figure out your COI and file the paper work with me by this evening.

Karl opened the file to read: "Significant financial interest means:

(1) A financial interest consisting of one or more of the following interests of the Investigator (and those of the Investigator's spouse and dependent children) that reasonably appears to be related to the Investigator's institutional responsibilities:

(i) With regard to any publicly traded entity, a significant financial interest exists if the value of any remuneration received from the entity in the twelve months preceding the disclosure and the value of any equity interest in the entity as of the date of disclosure, when aggregated, exceeds $5,000. For purposes of this definition, remuneration includes salary and any payment for services not otherwise identified as salary (e.g., consulting fees, honoraria, paid authorship); equity interest includes any stock, stock option, or other ownership interest, as determined through reference to public prices or other reasonable measures of fair market value;

(ii) With regard to any non-publicly traded entity, a significant financial interest exists if the value of any remuneration received from the entity in the twelve months preceding the disclosure, when aggregated, exceeds $5,000, or when the Investigator (or the Investigator's spouse or dependent children) holds any equity interest (e.g., stock, stock option, or other ownership interest); or

(iii) Intellectual property rights and interests (e.g., patents, copyrights), upon receipt of income related to such rights and interests.

(2) Investigators also must disclose the occurrence of any reimbursed or sponsored travel ( i.e., that which is paid on behalf of the Investigator and not reimbursed to the Investigator so that the exact monetary value may not be readily available), related to their institutional responsibilities; provided, however, that this disclosure requirement does not apply to travel that is reimbursed or sponsored by a Federal, state, or local government agency, an Institution of higher … an academic teaching hospital, a medical center, or a research institute that is affiliated with an Institution of higher education.

(3) The term significant financial interest does not include the following types of financial interests: salary, royalties, or other remuneration paid by the Institution to the Investigator if the Investigator is currently employed or otherwise appointed by the Institution, including intellectual property rights assigned to the Institution and agreements to share in royalties related to such rights; any ownership interest in the Institution held by the Investigator, if the Institution is a commercial or for-profit organization; income from investment vehicles, such as mutual funds and retirement accounts, as long as the Investigator does not directly control the investment decisions made in these vehicles; income from seminars, lectures, or teaching engagements sponsored by a Federal, state, or local government agency, an Institution of higher education, an academic teaching hospital, a medical center, or a research institute that is affiliated with an Institution of higher education; or income from service on advisory committees or review panels for a Federal, state, or local government agency, an Institution of higher education, an academic teaching hospital, a medical center, or a research institute that is affiliated with an Institution of higher education."¹

After reading the definitions, Karl's head was spinning.

He tried to recall what he had earned in speakers' fees and honoraria in the previous calendar year. This was a hard question, Karl travelled often, spoke at many meetings, and was in high-demand for a post-doctoral fellow. He had just been lucky to have been part of the team to sequence the ferret genome, a team whose founding members had died in a plane crash, leaving Karl as the "senior" speaker on their findings.

Karl was sure he had made more than 5000USD in the past year, but some of those payments were in cash, in foreign currencies, which he did not claim as outside practice or claim on his taxes.

Karl thought to himself as he put the FCOI folder in his desk drawer.

"If no one knows what that group in Taiwan paid me, then I guess I do not have to declare it. I cannot even remember what I earned last year. The US government has too many things to worry about… anyways, it would harm our chances of a grant if people thought we were just out to make money".

¹US Code of Federal Regulations; 42CFR50, Subpart F-Promoting Objectivity in Research

Case Questions

What problems does the Financial Conflict of Interest description above help researchers to avoid?
Do you agree with the financial limits stipulated?
What are the problems that Karl might run into if he does not declare his CoI?
What problems might Karl bring to the team—to Sharon—if he does not declare?

Imagine you are Sharon:

How do you convince Karl that declaration of conflict of interests is not an attack?
How do you convince him that declaration of potential conflicts protects him and the team?

Imagine you are Karl:

If you ignore the requirements for FCOI declaration in this grant application, what might be the risks or rewards?
Is Karl's concern that declaration of a conflict is declaration of misbehavior well founded?
What might be the risks to Karl's ability to get funding if he does not declare the potential FCOIs he has?