OF RECORD

Please note that this policy has been superceded as of August 24, 2012. The new policy can be found here.

The Financial Disclosure Policy for Research and Sponsored Projects printed below is an administrative revision of the 1995 policy.

The earlier policy has been revised to bring it into line with current federal guidelines. It is my intention to establish a faculty committee to review the entire policy in the near future. The Faculty Senate leadership has agreed that, effective immediately, the policy below will serve as an interim policy until that committee completes its work.

--Provost Robert Barchi

Financial Disclosure Policy for Research and Sponsored Projects

Preamble

An essential aspect of the University is the ability of the faculty to pursue all areas of academic inquiry with freedom from inappropriate external bias. One of the hallmarks of University research is its credibility and frankness. The University has an obligation to the community of scholars and to the public to assure that research and scholarly activity is carried out under the highest standards of ethical conduct. As the economic importance of University research has grown over the past several decades there are increasing opportunities for faculty, students and staff to convert their ideas and concepts into commercial realities. These opportunities present challenges to the openness and bias-free environment of a university. Thus it is appropriate that whenever research or other creative activity is sponsored externally or with University resources, that there be a full and appropriate disclosure of financial interests which may affect the conduct of the research or scholarly activity or the education of students and that the conflicts of interest be appropriately managed.

Background

Several years ago the National Science Foundation (NSF), and the U.S. Public Health Service including the National Institutes of Health (NIH) and the Food and Drug Administration (FDA) issued regulations which require disclosure of personal financial interests by Principal Investigators (PIs), Clinical Investigators (co- and sub- investigators) (CI) (collectively Investigators) and others engaged in a project being proposed to those agencies, when such interests would reasonably appear to be affected by the research or other activity being proposed. These regulations require that the University have in place a policy on conflicts of interest which:

requires such financial disclosure by Investigators and others (including interests of their spouses and dependent children) responsible for the design, implementation and reporting of the proposed research;
designates an individual(s) to review disclosures, determine if a conflict of interest exists, and resolve problems related to conflicts;
provides enforcement mechanisms and sanctions for individuals who fail to comply;
provides for notification to the responsible agency; and
assures the maintenance of records for at least three years after a project has been completed.

In addition, each proposal submitted to the NSF and NIH will require certification by the institutional official who signs the proposal, that the individuals have made appropriate disclosures, and that, if there are any real or apparent conflicts of interest, the institution will have eliminated, reduced or managed such conflicts before expenditure of any funds under the award.

The FDA requires that for Covered Clinical Studies Certifications of No Financial Interests and Arrangements or Disclosures of Financial Interests and Arrangements be submitted to the research sponsor and then to the FDA.

Applicability

The Financial Disclosure Policy described below will apply to all proposals and applications submitted to any sponsor and to human subjects research conducted under the aegis of the University of Pennsylvania on or after_______. The Policy will be supplementary to the University's current Conflict of Interest Policy for Faculty (see Handbook for Faculty and Academic Administrators, Section II.E.1). A list of University policies related to the proposed Financial Disclosure Policy may be found in Appendix 1.

Individuals in leadership roles need to be mindful that their own financial interests may inappropriately influence the conduct of research of faculty, students, and staff under their supervision and should manage such potential conflicts consistent with the principles set forth in this Policy and the procedures described herein.

Policy

Definitions

Administrator means cognizant Dean, or his/her designee, for Investigators who are faculty or staff of a School. When there is no cognizant Dean, as in the case of the staff of some Centers and Institutes, the Center or Institute Director will be the Administrator.

In the case where the potential conflict of interest situation involves a Center or Institute Director, then the Vice Provost for Research will be the responsible Administrator; if the case involves a Dean, then the Provost or his/her designee will be the responsible Administrator.

Covered Clinical Study means any study of a drug or device in humans submitted in a marketing application or reclassification petition subject to FDA regulations (21CFR Part 54) that the sponsor or FDA relies on to establish that the product is effective (including studies that show equivalence to an effective product) or that make a significant contribution to the demonstration of safety.

Investigator means a principal Investigator, co-principal Investigator, or others (e.g., individuals with supervisory or oversight function in the context of a large grant) responsible for the design, implementation and reporting of the proposed research or clinical investigators or sub-investigators directly involved in treatment or evaluation of research subjects, including staff, who are responsible for obtaining the informed consent of human subjects.

Significant Equity Interest means any ownership interest, stock options, or other financial interest whose value cannot be readily determined through reference to public prices (generally, interests in a nonpublicly traded corporation) during the time the clinical Investigator is carrying out the study and for one (1) year following completion of the study.

Significant Financial Interest means anything of monetary value, including, but not limited to, salary or other payments for services (e.g., consulting fees or honoraria); equity interests (e.g., stocks, stock options or other ownership interests); and intellectual property rights (e.g., patents, copyrights and royalties from such rights). Significant Financial Interest includes a Significant Equity Interest as defined above. For Covered Clinical Studies, Significant Financial Interest also includes Significant Payment of Other Sorts (as defined below).The term Significant Financial Interest does not include:

salary, royalties or other remuneration from the University;
income from service on advisory committees or review panels for public or non-profit entities;
income from seminars, lectures, or teaching engagements sponsored by public or nonprofit entities; or
an equity interest that when aggregated for the Investigator and the Investigators spouse and dependent children, meets both of the following tests: does not exceed $10,000 in value as determined through reference to public prices or other reasonable measures of fair market value; and does not represent more than five percent (5%) ownership interest in any single entity; or
salary, royalties or other payments that when aggregated for the Investigator and the Investigator's spouse and dependent children, are not expected to exceed $10,000 during the next twelve-month period.

Significant Payment of Other Sorts means payments made by the sponsor of a Covered Clinical Study to the Investigator or the institution to support activities of the Investigator that have a monetary value of more than $25,000, exclusive of the costs of conducting the Covered Clinical Study or other clinical studies, (e.g., a grant to fund ongoing research, compensation in the form of equipment or retainers for ongoing consultation or honoraria) during the time the clinical Investigator is carrying out the study and for one (1) year following the completion of the study.

Procedures

Disclosure. All Investigators shall submit a statement of Potential Conflict Of Interest (see Appendix 2) to the Office of Research Services (ORS) and to their supervisor prior to the initiation of any University-sponsored research or clinical trial and annually as long as such research is ongoing.

The Investigator shall also submit to ORS and his/her supervisor a copy of his/her updated Financial Disclosure Form at any point prior to entering into an arrangement that may result in a potential conflict of interest or substantially modify an existing conflict of interest.

Prior to submission of a grant proposal or any research project involving human subjects in research an Investigator may seek advice from the Conflict of Interest Standing Committee (CISC) as to whether any real or apparent conflict of interest exists with respect to a sponsored program or research project. Investigators must at the time a proposal is submitted to the Office of Research Services for approval, certify on the ORS Transmittal/Approval Form whether or not they, or their spouses and dependent children, have any Significant Financial Interests that would reasonably appear to be affected by the activities proposed to be funded, thus creating a potential conflict of interest. Please note that individuals should not report holdings in mutual funds, or pension accounts. Disclosure of a Significant Equity Interest in a sponsor of a Covered Clinical Study extends for one (1) year after conclusion of the study. Please note: If any equity is not publicly traded, it must be disclosed in all cases.

When an Investigator indicates that there may be a potential conflict of interest, he/she must complete a Statement of Potential Conflict of Interest form (see Appendix 2) and submit it to ORS with (or in advance of) the proposal. ORS will not submit a proposal until the Investigator(s) have certified whether a conflict or potential conflict exists, and, if necessary, submitted a Statement of Potential Conflict of Interest. Investigators must update financial disclosures during the period of an award when new reportable Significant Financial Interests are acquired. Where pertinent, addition of new Investigators to an ongoing award activity will require an updated financial disclosure.

In the case of studies involving human subjects including Covered Clinical Studies, Investigators shall promptly submit to the Office of Regulatory Affairs (ORA) copies of any Disclosures of Financial Interests and Arrangements of Clinical Investigators (FDA Form 3455 or documents submitted to the sponsor for preparation of Form 3455) that they submit to any research study sponsor or granting organization, to the Food and Drug Administration (FDA), National Institute of Health (NIH), National Science Foundation (NSF) or any other regulatory agency. Faculty Members shall also promptly submit to the ORA copies of all Certifications of No Financial Interests and Arrangements of Clinical Investigators (FDA Form 3454 or documents submitted to sponsor for preparation of Form 3454).

In any instance where the Faculty Member is an Investigator in human subject research he/she shall include a disclosure of his/her research-related conflict(s) of interest in the human subjects research informed consent form and such disclosure shall be approved by the Institutional Review Board (IRB) as part of the IRB's approval of the human subjects research protocol. (Where the Investigator is not the Principal Investigator, it is his/her responsibility to coordinate the disclosure with the Principal Investigator).

In the case of University supported research, the Investigator shall submit a Statement of Potential Conflict of Interest to the Office of the Vice Provost for Research.

Review. ORS shall promptly distribute a copy of any Statement of Potential Conflict of Interest Form that indicates that there may be a conflict (and accompanying material, if any) to the CISC (see Appendix 3) for the CISC's review and recommendation. Simultaneously ORS shall notify the Office of Regulatory Affairs (ORA), and the Center for Technology Transfer (CTT) as applicable, and the relevant Dean. Prior to approval of a research protocol by the IRB, the expenditure of any funds under an external award, or the initiation of a University supported project, the CISC will review the Statement(s) of Potential Conflict of Interest, determine if, in its judgment, any actual or potential conflicts of interest are present, and if so, recommend to the Vice Provost for Research how such conflicts should be eliminated, reduced or managed. Examples of conditions or restrictions that might be imposed to manage, reduce or eliminate actual or potential conflicts of interest include:

public disclosure of Significant Financial Interests;
monitoring of research by independent reviewers;
modification of the research plan;
disqualification from participation in the portion of the funded research that would be affected by the Significant Financial Interests;
divestiture of Significant Financial Interests; or
severance of relationships that create actual or potential conflicts.

Implementation. The Vice Provost for Research, on recommendation of the CISC and in consultation with the responsible Administrator(s), will decide how the real or potential conflict is to be managed, reduced, or eliminated. An award will not be accepted by the ORS, nor can a University supported project be initiated and the IRB will not approve the research protocol until this decision is made and agreed to by the Investigator(s).

The decision will be conveyed by letter to the responsible Administrator(s), who will be responsible for assuring that the decision of the Vice Provost is implemented. Copies of the letter will be sent to the Chairman of the CISC, to the ORS, CTT, ORA, and to the involved Investigator(s) and the relevant Dean. The Investigator will reply by letter (Appendix 4) indicating either acceptance of the decision, or an inability to carry out the decision, or a disagreement with the decision. Every effort should be made by the Vice Provost for Research to reach accord with the Investigator(s). In the event agreement is not reached, appeals to decision(s) of the Vice Provost may be made by the Investigator(s) and/or responsible Administrator to the Provost. The decision of the Provost shall be final.

Annual Reporting. Each Investigator will be required to report annually to the CISC on the status of the conflict of interest or whenever any significant change in circumstances occurs.

Enforcement and sanctions. A complaint alleging that an Investigator has violated this policy or failed to comply with a decision of the Vice Provost for Research for the management, reduction, or elimination of a conflict should be brought to the attention of the Vice Provost for Research. While the procedure for handling a complaint will depend upon the particulars of the complaint, normally the Vice Provost will interview the person bringing the complaint and the Investigator who is alleged to have violated the policy or failed to comply with a decision. If the complaint is not resolved or the violation or failure to comply remedied informally by the Vice Provost, the Vice Provost shall conduct an investigation, with the assistance of the cognizant Administrator and/or other appropriate University offices. If, as a result of the investigation, the Vice Provost believes that sanctions are warranted, he/she shall consult with the Provost and the cognizant Administrator to aid in determining an appropriate sanction, including whether there is substantial reason to believe that just cause exists for imposition of a major sanction, including suspension or termination of a faculty appointment.

When an Investigator is a faculty member and the Provost or the cognizant Dean determines that action should be taken for imposition of a major sanction, including suspension or termination of a faculty appointment, the Dean shall refer the matter to the Committee on Academic Freedom and Responsibility of the School for proceedings in accordance with the procedures set out in Section II.E.10 of the Handbook for Faculty and Academic Administrators.

Notification of sponsor. NIH requires that the University report to the Awarding Component the existence but not the substance of a conflicting

interest, and assure that it has been managed, reduced, or eliminated. The University will inform the sponsor if it finds that it is unable to satisfactorily manage an actual or potential conflict of interest. It will be the responsibility of the Investigator(s) and responsible Administrator(s) to notify the Vice Provost for Research if at any time the recommendations of the Committee and the Vice Provost cannot be fulfilled. The Vice Provost or his/her designee will be responsible for notifying the sponsor and taking appropriate action.

Confidentiality. The confidentiality of all transactions pertaining to financial disclosure forms must be strictly maintained by all those involved in the process.

Record retention. Records of all financial disclosures and of all actions taken to resolve actual or potential conflicts of interest shall be maintained for at least three years after the termination or completion of the award to which they relate, or the resolution of any government action involving those records.

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Appendix 1 University policies related to the Financial Disclosure Policy

University of Pennsylvania: Conflict of Interest Policy for Faculty Members, Almanac, March 8, 1993; and Handbook for Faculty and Academic Administrators, Section II.E.1.
University of Pennsylvania: Policy Information for Potential Commercial Sponsors of Research at the University of Pennsylvania, Almanac, May 17, 1983.
University of Pennsylvania: Guidelines for Student Protection in Sponsored Research Projects and Student Access to Information Regarding Sources of Financial Support, Almanac, October 21, 1986.
University of Pennsylvania: Use of Consultants, Office of Research Administration, Research Investigators Handbook, pp 58-59, 1990.
University of Pennsylvania: Guidelines for Extramural Activities, Associations, and Interest for Staff, Human Resources Policy Manual, February 1, 1990.
University of Pennsylvania: Patent and Tangible Research Property Policies and Procedures of the University of Pennsylvania, Almanac, March 15, 1994.

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Appendix 2 University of Pennsylvania Statement of Potential Conflict of Interest

Name: _________________________ Title:______________________________

Department: ___________ School: ____________ Date Submitted: __________

Requirement for Financial Disclosure

The University requires that an Investigator, at the time any proposal for funding is submitted or a protocol is submitted to the IRB for approval, which ever is earlier, and annually thereafter, disclose Significant Financial Interests (i) that would reasonably appear to be directly and significantly affected by the research or educational activities to be funded by the agency; or (ii) in entities whose financial interests would reasonably appear to be directly and significantly affected by such activities.

Definition of Significant Financial Interest and Other Key Terms

Significant Financial Interest means anything of monetary value, including, but not limited to salary or other payments for services (e.g., consulting fees or honoraria); equity interests (e.g., stocks, stock options or other ownership interests); and intellectual property rights (e.g., patents, copyrights and royalties from such rights). Significant Financial Interest includes a Significant Equity Interest (as defined above). For Covered Clinical Studies, Significant Financial Interest also includes Significant Payment of Other Sorts (as defined below). The term Significant Financial Interest does not include:

(i) salary, royalties or other remuneration from the University;

(ii) income from seminars, lectures, or teaching engagements sponsored by public or nonprofit entities;

(iii) income from service on advisory committees or review panels for public or nonprofit entities; or

(iv) an equity interest that when aggregated for the Investigator and the Investigator's spouse and dependent children, if it meets both of the following tests: does not exceed $10,000 in value as determined through reference to public prices or other reasonable measures of fair market value, and does not constitute more than five percent ownership interest in any single entity; or

(v) salary, royalties of other payments that when aggregated for the Investigator and the Investigator's spouse and dependent children over the next twelve months, are not expected to exceed $10,000.

Note: Be sure to categorize appropriately the Significant Financial Interests referred to above. However, please note that individuals should not report holdings in mutual funds, or pension accounts, and are not expected to list individual dollar amounts for any entity disclosed. The disclosure of a Significant Equity Interest in a sponsor of an FDA Covered Clinical Study extends for one (1) year after conclusion of the study. If any equity is not publicly traded, it must be disclosed in all cases.

Based upon the above definition:

Please identify below any Significant Financial Interests as defined above which might constitute a conflict of interest in the conduct or reporting of the research or other activities proposed herein. (Use additional sheets if necessary.)
Please identify below anything in your opinion that would not compromise your objectivity, but might have the appearance of so doing. (Use additional sheets if necessary.)

Certification

I certify that the above information is complete and true to the best of my knowledge and that I have read the University's policies related to conflict of interest as described in the Handbook for Faculty and Academic Administrators Section II.E.1., Conflict of Interest Policy for Faculty and the supplementary Financial Disclosure Policy for Sponsored Projects. This information is provided with the understanding that its review shall be conducted in confidence by appropriate University officials. The information may only be released by the University 1) in statistical or aggregate form that fully protects my privacy, or 2) to comply with the requirements of the sponsors of this research, or 3) as may be required to comply with University policies and procedures or any applicable legal requirements, or 4) with my written permission.

(Signature__________________________)

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Appendix 3 Conflict of Interest Standing Committee (CISC)

Procedures

The Conflict of Interest Standing Committee (CISC) reviews and makes recommendations on the resolution of cases of potential or real conflict of interest which arise from technology transfer activities or from sponsored projects of the University or its faculty. The recommendations of the CISC are transmitted to the Vice Provost with a copy to the ORS, ORA, CTT and the relevant Dean, as advice on the disposition of cases involving potential conflicts of interest, including a determination whether or not a real or potential conflict exists, and proposals on how such conflicts should be eliminated, reduced, or managed. The Vice Provost may accept the recommendations or may return them to the CISC for further consideration, revision, or clarification. The proceedings of the CISC are confidential, including all documents, drafts, and discussions.

Cases involving potential conflict of interest may be referred to the CISC by the CTT, by ORS, by University or School administrators, Department Chairs, or individual faculty. The staff of the CTT is responsible for referring to the CISC cases which arise from applications under consideration by the CTT. The ORS staff is responsible for referring to the CISC cases which arise from applications for sponsored research support. The ORA staff is responsible for referring to the CISC cases which arise from human subjects research protocols. Cases from other sources. Deans, Department Chairs, or individual faculty may refer cases of potential conflict of interest to the Chair or staff of the CISC, who will review them, determine whether they are appropriate for consideration, and present them for review by the committee.

Membership

The CISC consists of approximately 10 members of the standing faculty appointed by the Vice Provost for Research. Faculty members are expected to serve as members of the University and not as advocates for specific schools or constituencies. There are three ex-officio members, the Executive Director, Research Services, the Managing Director, CTT, and an attorney from the Office of the General Counsel. In addition, invitations to meetings are extended to professional staff of the CTT and to selected professional staff from the Schools. The CISC is chaired by a faculty member appointed by the Vice Provost. Staff support for the CISC is provided by the ORS, the CTT, and the Office of the Vice-Provost for Research. The Vice Provost will designate a staff member to serve as Secretary of the Committee.

All faculty members, plus the Executive Director, ORS, and the Managing Director, CTT have voting rights. Other attendees participate in discussion but do not vote.

Meetings

Attendance. Meetings are limited to CISC members, invited staff, and other invitees, and are not open to the public.

Quorum. A quorum consists of over half of all voting members. In general, an attempt will be made to insure that there is a quorum present at all meetings. The CISC Chair, at her/his discretion, may require that certain decisions be approved by a majority of all voting members not just a majority of those attending a specific meeting. Final versions of recommendations will usually be approved by mail/FAX in order to insure that all voting members have an opportunity to register their opinions.

Conflicts for Committee Members

A CISC member is recused from discussion of a particular case under the following conditions:

The case involves a member of the same department.
The CISC member has a personal interest because of inter-departmental relationships, such as collaboration with the faculty member whose case is under consideration.
The CISC member has a fiscal interest in the case under discussion.

Special exceptions to these guidelines may be made but only with the prior approval of a majority of the voting members.

Appendix 4 University of Pennsylvania Memorandum of Understanding for the Management of Potential Conflict of Interest

Name____________________________ Title___________________________

Department____________________ School_____________________________

Date of Original Statement of Potential Conflict of Interest___________

I have read the decision of the Vice Provost for Research on how the potential conflict of interest disclosed in my Statement of Potential Conflict of Interest referenced above and (check one of the following):

A. I agree with the decision and will abide by it.

B. I do not agree with the decision. However, I believe the potential

conflict of interest can be resolved as follows:

[. . .]

C. I do not agree with the decision and request that it be reviewed by the Provost.

(Signature____________________________)

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Almanac, Vol. 47, No. 21, February 6, 2001

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