The FDA's New Guidelines on Financial Disclosure by Clinical Investigators

FDA regulations require applicants submitting a marketing application for drugs, biological products, or devices to disclose financial information relating to the compensation, financial interests and arrangements of clinical investigators conducting clinical studies. 21 C.F.R. ' 54. The regulation applies to clinical studies submitted in a marketing application that either the FDA or the applicant relies on to establish that a product is effective, and any study where a single investigator makes a significant contribution to the demonstration of safety. 21 C.F.R. ' 54.2. The applicant collects financial disclosure forms from the clinical investigators. Based upon those forms, the applicants then are required to do one of the following: certify that no financial interest exists; disclose the nature of the financial interests and steps taken to minimize any potential bias; or certify that the applicant acted in due diligence but was unable to obtain the financial information. 21 C.F.R. ' 54.4. The FDA uses this information, along with information about the design and purpose of the study and information from on-site inspections, to determine the reliability of the data from the study. If the FDA has concerns about the integrity of the data based on the financial disclosure information, the FDA can take actions, including audits, requesting further analyses of the data, requesting additional studies, and rejecting the data as support for the new drug or device marketing application.

Under the regulations, the following are considered to be disclosable financial arrangements:

• A. Compensation made to the investigator in which the value of compensation could be affected by study outcome. This requirement applies to all covered studies, whether ongoing or completed, as of Feb. 2, 1999.
• B. A proprietary interest to the tested product, including, but not limited to, a patent, trademark, copyright or licensing agreement. This requirement applies to all covered studies, whether ongoing or completed as of Feb. 2, 1999.
• C. Any equity interest in the sponsor of a covered study, i.e., any ownership interest, stock options, or other financial interest whose value cannot be readily determined through reference to public prices. This requirement applies to all covered studies, whether ongoing or completed.
• D. Any equity interest in a publicly held company that exceeds $50,000 in value. These must be disclosed only for covered clinical studies that are ongoing on or after Feb. 2, 1999. The requirement applies to interests held during the time the clinical investigator is carrying out the study and for one year following completion of the study; and
• E. Significant payments of other sorts (SPOOS), which are payments that have a cumulative monetary value of $25,000 or more made by the sponsor of a covered study to the investigator or the investigators' institution to support activities of the investigator exclusive of the costs of conducting the 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 year following completion of the study. This requirement applies to payments made on or after Feb. 2, 1999.

The FDA's 2001 Financial Disclosure of Clinical Investigators Guidance provided answers to 31 questions that the FDA had received in response to the financial disclosure regulations. The questions generally related to the purpose of the financial disclosure regulations, the requirements and obligations for applicants, sponsors, and investigators, and the FDA's definitions and explanation of terms used in the regulations. The FDA also provided further clarification of the categories of disclosable financial interests.

The New Guidelines

As compared with the 2001 Guidance, the revised Guidance for Industry: Financial Disclosure of Clinical Investigators (the New Guidelines) addresses issues raised in the OIG's report and provides answers to 51 frequently asked questions. This article does not cover each change or addition made in the New Guidelines, but rather provides a summary of some of the key points and distinctions made in the New Guidelines.

Due Diligence. The revised Guidance defines what the FDA considers “due diligence” in the context of financial disclosure for clinical investigators. The New Guidelines specifically state that the FDA expects applicants to be able to obtain the required financial information because IND (Investigational New Drug)/IDE (Investigational Device Exemption) sponsors are responsible for obtaining such information from clinical investigators before allowing them to participate in the clinical study. However, if the financial information is not available from the sponsor, the FDA advises that an applicant should make “appropriate efforts” to gain the information by other means. The FDA recommends the following efforts be made to obtain the information:

• Contact the clinical investigator directly;
• Try to locate the clinical investigator by making at least two phone calls;
• Make written documentation of each call and any telephone conversation;
• Follow up the phone calls in writing;
• Send at least two certified letters in an effort to locate the clinical investigator;
• Request contact information from the institution where the study was conducted or where the investigator is affiliated;
• Contact professional associations with which the investigator may have been affiliated;
• Conduct Internet searches; and
• Try to obtain the information from other “readily available sources,” such as those that are publically available.

The New Guidelines also stress that applicants must exercise due diligence in covered clinical studies conducted in both foreign and domestic sites.

Minimizing Potential Bias. The New Guidelines emphasize that “an important means of minimizing the potential for bias resulting from such interests and arrangements is through proper study design.” The FDA advises that using randomization and blinding in studies can minimize potential bias. The FDA also suggests using an investigator with no financial interests or arrangements to evaluate study endpoints as a way to help minimize potential bias in assessing study outcomes. Further, the FDA encourages sponsors to work with the FDA to minimize potential bias.

Financial Information Needed from Each Sponsor of the Covered Clinical Study. The New Guidelines provide that where a covered clinical study has more than one sponsor, financial information may need to be collected from multiple sponsors. The FDA states that “[a] covered clinical study may have more than one sponsor for whom financial information will need to be collected.” The New Guidelines advise that “[c]ompensation made to the investigator by any sponsor of the clinical study in which the value of the compensation could be affected by the outcome of the study must be disclosed,” as well as “[a]ny interest in any sponsor of the covered study if the sponsor is a publicly held company and the interest exceeds $50,000 in value.” (Emphasis added).

Foreign Studies. The New Guidelines also stress that applicants have the same financial disclosure obligations for covered clinical studies conducted at foreign sites. The FDA advises that sponsors of foreign covered clinical studies should obtain information from clinical investigators before the study is initiated and should provide this information to applicants. Further, the FDA “believes that a prudent applicant would take affirmative action” to obtain the financial information collected by the sponsor as early as possible and urges applicants to collect the information before the study is initiated if possible.

Mutual Funds and 401(k)s. The New Guidelines acknowledge that equity interests in publicly traded mutual funds would not be reportable in the “vast majority of cases.” However, equity interests held in such publicly traded mutual funds would be reportable if an investigator has control over buying or selling stocks in a mutual fund or if the fund invested a substantial portion of its capital in a sponsor of the covered clinical study. Further, the equity
interest in a 401(k) would be reportable if the investigator holds an equity interest in a sponsor over $50,000 in a 401(k) account.

Method for Collecting Financial Information from Clinical Investigators. The previous version of the guidelines provided little guidance on how the FDA expects the financial information of clinical investigators to be collected. Although the New Guidelines reiterate that the FDA does not require a particular method for collecting the information, it recommends that sponsors who use questionnaires to collect the information should design the questionnaires appropriately for that purpose. The New Guidelines point out that the FORM FDA 3455 (the form completed by the investigators) was not designed for that purpose, suggesting that sponsors should not use FORM FDA 3455 as the questionnaire because it does not provide explanatory information about what financial information the clinical investigators must provide. The FDA advises that questionnaires should explain the following: 1) reporting requirements apply to spouses and dependent children as well as the investigators; 2) the specific dollar amounts that trigger reporting of equity interests and SPOOS; 3) investigators must report the specific details of financial interests and arrangements; and 4) if there is more than one sponsor for a covered clinical study, dollar amounts triggering reporting apply separately to each sponsor.

Considerations by FDA Reviewers. The revised Guidance emphasizes that the FDA considers many factors in its evaluation of the impact of disclosed financial interests on the reliability of the study data. According to the New Guidelines, the following factors are considered by the FDA:

• Type of financial interest or arrangement disclosed;
• Amount and nature of equity interests and payments;

1. Whether multiple investigators were used, and if most investigators had no disclosable financial interests;

2. Total number of investigators and subjects in the study;

3. Number and percentage of subjects enrolled by the disclosing investigator;

4. Information obtained from on- site inspections;

5. Design of the clinical study;

6. Method of randomization;

7. Nature of primary and secondary endpoints;

8. Method of endpoint assessment;

9. Method of evaluation;

10. Whether the disclosing investigator measured the endpoints;

11. Results of the disclosing investigator compared to the result of other investigators in the study; and

12. Description of the steps taken to minimize the potential bias.

FDA Inspections. The New Guidelines stress that it is the FDA's policy to review financial disclosure information during a sponsor inspection. However, the FDA may request access to financial disclosure information at “other reasonable times” as well. Pursuant to 21 C.F.R. ' 54.6(b)(2), the FDA also has authority to access and copy documents supporting an applicant's certification or disclosure statement submitted in a marketing application. It is the FDA's policy that its investigators should ask clinical investigators if they submitted information to the sponsor before initiation of the study and if they have updated their information as required under the regulations. The FDA's instructions for its inspectional staff on clinical investigator inspections and sponsor inspections are provided in the Compliance Program Guidance Manual.

Publication of Financial Interest Disclosures. The revised Guidance acknowledges the mounting public concern in the conflicts of interest of clinical investigators. The FDA explains that when it first promulgated the financial disclosure regulations in 1998, the FDA anticipated that a clinical investigator's privacy interest would rarely be outweighed by the public interest. However, the FDA is aware of the growing interest in the public disclosure of the financial interests of clinical investigators as well as payments made to physicians that may be considered SPOOS. The revised Guidance states, “FDA is currently developing its policy on transparency, which may affect what information, and in what manner, FDA may publicly disclose clinical investigators' financial interests and arrangements.” Until a policy is made, the FDA will evaluate each situation on a case-by-case basis.

Relevant Case Law and Potential Claims

In recent years, there has been a rise in clinical trial litigation involving allegations of conflicts of interest, including a flurry of class action lawsuits filed against clinical researchers, sponsors, and research institutions. One of the first highly publicized class action lawsuits was filed by participants of a cancer clinical trial against Fred Hutchinson Cancer Research Center in Seattle, WA. Seven causes of action, including breach of the right to dignity, fraud, assault and battery, product liability and violations of federal regulations were brought against the center and the clinical investigators and sponsors of trials. It was alleged that the defendants failed to disclose the financial interests of the clinical investigators leading the study. The District Court for the Western District of Washington dismissed plaintiffs' claims for violation of federal regulations governing human research subjects holding that the federal regulations did not give rise to private cause of action. The court also dismissed the plaintiffs' breach of contract claim holding that the subjects were not third-party beneficiaries of the contract between the center and the Department of Health and Human Services (HHS). The court further held that the center's alleged failure to obtain informed consent was not a violation of subjects' procedural or substantive due process rights. Wright v. Fred Hutchinson Cancer Research Center, 269 F. Supp. 2d 1286 (2002).

Perhaps the most well-known clinical trial suit was the case of Jesse Gelsinger against the University of Pennsylvania. Gelsinger was 18 years old when he died on his fourth day of participating in a clinical trial for gene therapy. It was alleged that the lead clinical investigator, the university, and university officials failed to disclose that they had financial stakes in the biotechnology company producing the test drug. Various theories of liability were asserted against the lead investigator, the university, and the sponsor including negligence, product liability, fraud, misrepresentation, and violation of human rights. The suit was settled for a confidential amount, six weeks after it was filed.

Conflict of interest claims have also been raised in cases involving FDA-approved devices and drugs, as opposed to cases involving patients in clinical trials. However, depending on the drug or device involved, these claims may be preempted. For example, in Timberlake v. Synthes Spine, Inc., No. V-08-4, 2011 WL 711075 (S.D. Tex., Feb. 18, 2011), the plaintiff suffered from degenerative disc disease. Two months after the defendant's product ProDisc received premarket approval (PMA) from the FDA, the plaintiff had the ProDisc implanted in his spine. However, X-rays five days later revealed that the ProDisc had been dislodged, allegedly resulting in fractures to the plaintiff's vertebrae and disabling pain.

The plaintiff alleged that the defendants provided incomplete and misleading information concerning the clinical trials to the FDA during the PMA process and failed to disclose to the FDA, as well as the plaintiff, that doctors and clinics participating in the clinical trials purportedly would benefit financially if the FDA approved the ProDisc and from the sale of the device. The plaintiff alleged that the FDA would not have given premarket approval to the ProDisc if it had known this information. The plaintiff asserted several causes of action including fraud on the FDA and violation of the FDA PMA process. On the defendant's motion for summary judgment, the court dismissed the plaintiff's claims as to fraud on the FDA and violation of the FDA PMA process, holding that the claims were preempted by federal law under Buckman Co. v. Plaintiffs' Legal Committee, 531 U.S. 341, 121 S.Ct. 1012, 148 L.Ed.2d 854 (2001) (holding that plaintiffs' state law claims for fraud on the FDA were impliedly preempted by the FDCA and that there is no private right of action under the FDCA).

State tort claims regarding the disclosure of financial interests of physicians in the informed consent process also have been raised in medical malpractice cases. There is some indication from decisions in those cases that pharmaceutical and medical device manufacturers successfully can rely on an informed consent argument regarding the duty to disclose financial interest information by the investigator, as opposed to the sponsor of the study, as part of the informed consent process. For example, in the case of Darke v. Isner, No. 02-194, 2004 WL 1325635 (Mass. Super. June 3, 2004), Roger Darke died during a gene therapy program conducted by Dr. Jeffrey Isner. It was alleged that prior to Drake's participation in the program, Dr. Isner developed an experimental treatment for coronary artery disease and formed a corporation named Vascular Genetics, Inc. (VGI). Dr. Isner and the hospital he worked for each held a 20% ownership interest in VGI, and therefore had a financial incentive to encourage patients to participate in the gene therapy program. Further, if the program were successful, then both Dr. Isner and the hospital would profit in proportion to their ownership interest in the company. Neither the hospital nor Dr. Isner disclosed to Darke that they had a financial interest in the outcome of the study. The defendants moved for summary judgment on the plaintiff's claim that the defendants could be held liable for their failure to disclose their financial stake in the gene therapy program. In a question of first impression, a Massachusetts Superior Court held that the Massachusetts common law definition of informed consent was broad enough to allow the imposition of tort liability on a doctor who fails to disclose to his patient that he has a financial interest in the treatment that he recommends. Id.

The following year, the same court denied the defendants' motion for summary judgment on several claims against Dr. Isner, including gross negligence and deceit, but granted summary judgment on the negligence claim against VGI. The court held that the investigators had the duty to obtain informed consent, not VGI as the sponsor. Darke v. Isner, No. 022194E, 2005 WL 3729113 (Mass. Super. November 22, 2005).

Practical Implications and Conclusions

The New Guidelines stress that sponsors and applicants of covered clinical studies must act with due diligence to obtain and report the financial information of clinical investigators. The FDA clearly expects that clinical investigators will fully disclose and update their financial information to sponsors, that sponsors will appropriately collect the financial information at the earliest opportunity, and that applicants will ensure that the financial information is accurately and timely reported to the FDA. Although these measures are aimed at ensuring the integrity of clinical research data, the bright-line guidelines may also result in more lawsuits against pharmaceutical and medical device companies. Thus, product liability attorneys should be familiar with these Guidelines and be prepared to use the Guidelines to aid in the overall defense strategy.

The FDA's revised Guidance on the financial disclosure of clinical investigators reflects the greater expectations that the FDA will now have for clinical study sponsors, applicants and clinical investigators. It outlines specific measures that should be taken to obtain information from clinical investigators, ways to minimize potential bias, and the contents of financial disclosure questionnaires. Unfortunately, these checklists may provide ammunition to plaintiffs asserting various conflict of interest claims against your client. Clients should be advised of the New Guidelines and expectations of sponsors, applicants, and clinical investigators.

However, these Guidelines also could be used by defendant pharmaceutical and medical device manufacturers to help defend these claims. They could be used, for example, in further support of potential Buckman preemption arguments, as well as informed consent arguments.

Christiana Callahan Jacxsens, a shareholder at Greenberg Traurig, LLP, concentrates her practice on complex medical and product liability litigation, with a focus on pharmaceutical and medical device litigation. Jessica Cabral, an associate with the firm, concentrates her practice on complex product liability litigation, with a focus on pharmaceutical and medical device litigation.

There has been a growing number of claims in medical device and pharmaceutical product liability actions based on purported conflicts of interest of clinical investigators conducting medical device or pharmaceutical clinical studies. Financial interests of clinical investigators can be a potential source of bias in clinical study data used to support the application for FDA approval of a new drug or a new medical device. In particular, a clinical trial investigator may have a financial interest in the outcome of the study, due to payment arrangements or equity interests in the sponsors of clinical studies. While the FDA does not prohibit a clinical trial investigator from having a purported financial interest, it does regulate the disclosure of that information. The financial disclosure requirements of clinical investigators are governed by 21 Code of Federal Regulations Part 54, which came into effect in 1999. Generally, FDA regulations require that medical device and pharmaceutical manufacturers submit financial interest disclosures with their applications for a new drug or a new device. On March 20, 2001, the FDA issued its original Guidance on Financial Disclosure By Clinical Investigators to assist pharmaceutical and medical device companies, as well as clinical investigators in interpreting and complying with the federal regulations governing financial interest disclosures.

In recent years, there has been an increased public interest concerning the regulation of conflicts of interests for clinical investigators. In 2009, the Office of the Inspector General (OIG), Department of Health and Human Services published its report, The Food and Drug Administration's Oversight of Clinical Investigators' Financial Information, which raised concerns regarding the FDA's monitoring of conflict of interests to ensure the integrity of clinical research. In response, the FDA has recently updated its Guidance for Industry: Financial Disclosure of Clinical Investigators for the first time since 2001. The revised Guidance addresses issues raised in the OIG's report as well as frequently asked questions from the industry and public. This article briefly examines the key changes to the revised Guidance and the practical implications of the new guidelines in product liability cases.

Background

FDA regulations require applicants submitting a marketing application for drugs, biological products, or devices to disclose financial information relating to the compensation, financial interests and arrangements of clinical investigators conducting clinical studies. 21 C.F.R. ' 54. The regulation applies to clinical studies submitted in a marketing application that either the FDA or the applicant relies on to establish that a product is effective, and any study where a single investigator makes a significant contribution to the demonstration of safety. 21 C.F.R. ' 54.2. The applicant collects financial disclosure forms from the clinical investigators. Based upon those forms, the applicants then are required to do one of the following: certify that no financial interest exists; disclose the nature of the financial interests and steps taken to minimize any potential bias; or certify that the applicant acted in due diligence but was unable to obtain the financial information. 21 C.F.R. ' 54.4. The FDA uses this information, along with information about the design and purpose of the study and information from on-site inspections, to determine the reliability of the data from the study. If the FDA has concerns about the integrity of the data based on the financial disclosure information, the FDA can take actions, including audits, requesting further analyses of the data, requesting additional studies, and rejecting the data as support for the new drug or device marketing application.

Under the regulations, the following are considered to be disclosable financial arrangements:

• A. Compensation made to the investigator in which the value of compensation could be affected by study outcome. This requirement applies to all covered studies, whether ongoing or completed, as of Feb. 2, 1999.
• B. A proprietary interest to the tested product, including, but not limited to, a patent, trademark, copyright or licensing agreement. This requirement applies to all covered studies, whether ongoing or completed as of Feb. 2, 1999.
• C. Any equity interest in the sponsor of a covered study, i.e., any ownership interest, stock options, or other financial interest whose value cannot be readily determined through reference to public prices. This requirement applies to all covered studies, whether ongoing or completed.
• D. Any equity interest in a publicly held company that exceeds $50,000 in value. These must be disclosed only for covered clinical studies that are ongoing on or after Feb. 2, 1999. The requirement applies to interests held during the time the clinical investigator is carrying out the study and for one year following completion of the study; and
• E. Significant payments of other sorts (SPOOS), which are payments that have a cumulative monetary value of $25,000 or more made by the sponsor of a covered study to the investigator or the investigators' institution to support activities of the investigator exclusive of the costs of conducting the 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 year following completion of the study. This requirement applies to payments made on or after Feb. 2, 1999.

The FDA's 2001 Financial Disclosure of Clinical Investigators Guidance provided answers to 31 questions that the FDA had received in response to the financial disclosure regulations. The questions generally related to the purpose of the financial disclosure regulations, the requirements and obligations for applicants, sponsors, and investigators, and the FDA's definitions and explanation of terms used in the regulations. The FDA also provided further clarification of the categories of disclosable financial interests.

The New Guidelines

As compared with the 2001 Guidance, the revised Guidance for Industry: Financial Disclosure of Clinical Investigators (the New Guidelines) addresses issues raised in the OIG's report and provides answers to 51 frequently asked questions. This article does not cover each change or addition made in the New Guidelines, but rather provides a summary of some of the key points and distinctions made in the New Guidelines.

Due Diligence. The revised Guidance defines what the FDA considers “due diligence” in the context of financial disclosure for clinical investigators. The New Guidelines specifically state that the FDA expects applicants to be able to obtain the required financial information because IND (Investigational New Drug)/IDE (Investigational Device Exemption) sponsors are responsible for obtaining such information from clinical investigators before allowing them to participate in the clinical study. However, if the financial information is not available from the sponsor, the FDA advises that an applicant should make “appropriate efforts” to gain the information by other means. The FDA recommends the following efforts be made to obtain the information:

• Contact the clinical investigator directly;
• Try to locate the clinical investigator by making at least two phone calls;
• Make written documentation of each call and any telephone conversation;
• Follow up the phone calls in writing;
• Send at least two certified letters in an effort to locate the clinical investigator;
• Request contact information from the institution where the study was conducted or where the investigator is affiliated;
• Contact professional associations with which the investigator may have been affiliated;
• Conduct Internet searches; and
• Try to obtain the information from other “readily available sources,” such as those that are publically available.

The New Guidelines also stress that applicants must exercise due diligence in covered clinical studies conducted in both foreign and domestic sites.

Minimizing Potential Bias. The New Guidelines emphasize that “an important means of minimizing the potential for bias resulting from such interests and arrangements is through proper study design.” The FDA advises that using randomization and blinding in studies can minimize potential bias. The FDA also suggests using an investigator with no financial interests or arrangements to evaluate study endpoints as a way to help minimize potential bias in assessing study outcomes. Further, the FDA encourages sponsors to work with the FDA to minimize potential bias.

Financial Information Needed from Each Sponsor of the Covered Clinical Study. The New Guidelines provide that where a covered clinical study has more than one sponsor, financial information may need to be collected from multiple sponsors. The FDA states that “[a] covered clinical study may have more than one sponsor for whom financial information will need to be collected.” The New Guidelines advise that “[c]ompensation made to the investigator by any sponsor of the clinical study in which the value of the compensation could be affected by the outcome of the study must be disclosed,” as well as “[a]ny interest in any sponsor of the covered study if the sponsor is a publicly held company and the interest exceeds $50,000 in value.” (Emphasis added).

Foreign Studies. The New Guidelines also stress that applicants have the same financial disclosure obligations for covered clinical studies conducted at foreign sites. The FDA advises that sponsors of foreign covered clinical studies should obtain information from clinical investigators before the study is initiated and should provide this information to applicants. Further, the FDA “believes that a prudent applicant would take affirmative action” to obtain the financial information collected by the sponsor as early as possible and urges applicants to collect the information before the study is initiated if possible.

Mutual Funds and 401(k)s. The New Guidelines acknowledge that equity interests in publicly traded mutual funds would not be reportable in the “vast majority of cases.” However, equity interests held in such publicly traded mutual funds would be reportable if an investigator has control over buying or selling stocks in a mutual fund or if the fund invested a substantial portion of its capital in a sponsor of the covered clinical study. Further, the equity
interest in a 401(k) would be reportable if the investigator holds an equity interest in a sponsor over $50,000 in a 401(k) account.

Method for Collecting Financial Information from Clinical Investigators. The previous version of the guidelines provided little guidance on how the FDA expects the financial information of clinical investigators to be collected. Although the New Guidelines reiterate that the FDA does not require a particular method for collecting the information, it recommends that sponsors who use questionnaires to collect the information should design the questionnaires appropriately for that purpose. The New Guidelines point out that the FORM FDA 3455 (the form completed by the investigators) was not designed for that purpose, suggesting that sponsors should not use FORM FDA 3455 as the questionnaire because it does not provide explanatory information about what financial information the clinical investigators must provide. The FDA advises that questionnaires should explain the following: 1) reporting requirements apply to spouses and dependent children as well as the investigators; 2) the specific dollar amounts that trigger reporting of equity interests and SPOOS; 3) investigators must report the specific details of financial interests and arrangements; and 4) if there is more than one sponsor for a covered clinical study, dollar amounts triggering reporting apply separately to each sponsor.

Considerations by FDA Reviewers. The revised Guidance emphasizes that the FDA considers many factors in its evaluation of the impact of disclosed financial interests on the reliability of the study data. According to the New Guidelines, the following factors are considered by the FDA:

• Type of financial interest or arrangement disclosed;
• Amount and nature of equity interests and payments;

1. Whether multiple investigators were used, and if most investigators had no disclosable financial interests;

2. Total number of investigators and subjects in the study;

3. Number and percentage of subjects enrolled by the disclosing investigator;

4. Information obtained from on- site inspections;

5. Design of the clinical study;

6. Method of randomization;

7. Nature of primary and secondary endpoints;

8. Method of endpoint assessment;

9. Method of evaluation;

10. Whether the disclosing investigator measured the endpoints;

11. Results of the disclosing investigator compared to the result of other investigators in the study; and

12. Description of the steps taken to minimize the potential bias.

FDA Inspections. The New Guidelines stress that it is the FDA's policy to review financial disclosure information during a sponsor inspection. However, the FDA may request access to financial disclosure information at “other reasonable times” as well. Pursuant to 21 C.F.R. ' 54.6(b)(2), the FDA also has authority to access and copy documents supporting an applicant's certification or disclosure statement submitted in a marketing application. It is the FDA's policy that its investigators should ask clinical investigators if they submitted information to the sponsor before initiation of the study and if they have updated their information as required under the regulations. The FDA's instructions for its inspectional staff on clinical investigator inspections and sponsor inspections are provided in the Compliance Program Guidance Manual.

Publication of Financial Interest Disclosures. The revised Guidance acknowledges the mounting public concern in the conflicts of interest of clinical investigators. The FDA explains that when it first promulgated the financial disclosure regulations in 1998, the FDA anticipated that a clinical investigator's privacy interest would rarely be outweighed by the public interest. However, the FDA is aware of the growing interest in the public disclosure of the financial interests of clinical investigators as well as payments made to physicians that may be considered SPOOS. The revised Guidance states, “FDA is currently developing its policy on transparency, which may affect what information, and in what manner, FDA may publicly disclose clinical investigators' financial interests and arrangements.” Until a policy is made, the FDA will evaluate each situation on a case-by-case basis.

Relevant Case Law and Potential Claims

In recent years, there has been a rise in clinical trial litigation involving allegations of conflicts of interest, including a flurry of class action lawsuits filed against clinical researchers, sponsors, and research institutions. One of the first highly publicized class action lawsuits was filed by participants of a cancer clinical trial against Fred Hutchinson Cancer Research Center in Seattle, WA. Seven causes of action, including breach of the right to dignity, fraud, assault and battery, product liability and violations of federal regulations were brought against the center and the clinical investigators and sponsors of trials. It was alleged that the defendants failed to disclose the financial interests of the clinical investigators leading the study. The District Court for the Western District of Washington dismissed plaintiffs' claims for violation of federal regulations governing human research subjects holding that the federal regulations did not give rise to private cause of action. The court also dismissed the plaintiffs' breach of contract claim holding that the subjects were not third-party beneficiaries of the contract between the center and the Department of Health and Human Services (HHS). The court further held that the center's alleged failure to obtain informed consent was not a violation of subjects' procedural or substantive due process rights. Wright v. Fred Hutchinson Cancer Research Center , 269 F. Supp. 2d 1286 (2002).

Perhaps the most well-known clinical trial suit was the case of Jesse Gelsinger against the University of Pennsylvania. Gelsinger was 18 years old when he died on his fourth day of participating in a clinical trial for gene therapy. It was alleged that the lead clinical investigator, the university, and university officials failed to disclose that they had financial stakes in the biotechnology company producing the test drug. Various theories of liability were asserted against the lead investigator, the university, and the sponsor including negligence, product liability, fraud, misrepresentation, and violation of human rights. The suit was settled for a confidential amount, six weeks after it was filed.

Conflict of interest claims have also been raised in cases involving FDA-approved devices and drugs, as opposed to cases involving patients in clinical trials. However, depending on the drug or device involved, these claims may be preempted. For example, in Timberlake v. Synthes Spine, Inc., No. V-08-4, 2011 WL 711075 (S.D. Tex., Feb. 18, 2011), the plaintiff suffered from degenerative disc disease. Two months after the defendant's product ProDisc received premarket approval (PMA) from the FDA, the plaintiff had the ProDisc implanted in his spine. However, X-rays five days later revealed that the ProDisc had been dislodged, allegedly resulting in fractures to the plaintiff's vertebrae and disabling pain.

The plaintiff alleged that the defendants provided incomplete and misleading information concerning the clinical trials to the FDA during the PMA process and failed to disclose to the FDA, as well as the plaintiff, that doctors and clinics participating in the clinical trials purportedly would benefit financially if the FDA approved the ProDisc and from the sale of the device. The plaintiff alleged that the FDA would not have given premarket approval to the ProDisc if it had known this information. The plaintiff asserted several causes of action including fraud on the FDA and violation of the FDA PMA process. On the defendant's motion for summary judgment, the court dismissed the plaintiff's claims as to fraud on the FDA and violation of the FDA PMA process, holding that the claims were preempted by federal law under Buckman Co. v. Plaintiffs ' Legal Committee , 531 U.S. 341, 121 S.Ct. 1012, 148 L.Ed.2d 854 (2001) (holding that plaintiffs' state law claims for fraud on the FDA were impliedly preempted by the FDCA and that there is no private right of action under the FDCA).

State tort claims regarding the disclosure of financial interests of physicians in the informed consent process also have been raised in medical malpractice cases. There is some indication from decisions in those cases that pharmaceutical and medical device manufacturers successfully can rely on an informed consent argument regarding the duty to disclose financial interest information by the investigator, as opposed to the sponsor of the study, as part of the informed consent process. For example, in the case of Darke v. Isner, No. 02-194, 2004 WL 1325635 (Mass. Super. June 3, 2004), Roger Darke died during a gene therapy program conducted by Dr. Jeffrey Isner. It was alleged that prior to Drake's participation in the program, Dr. Isner developed an experimental treatment for coronary artery disease and formed a corporation named Vascular Genetics, Inc. (VGI). Dr. Isner and the hospital he worked for each held a 20% ownership interest in VGI, and therefore had a financial incentive to encourage patients to participate in the gene therapy program. Further, if the program were successful, then both Dr. Isner and the hospital would profit in proportion to their ownership interest in the company. Neither the hospital nor Dr. Isner disclosed to Darke that they had a financial interest in the outcome of the study. The defendants moved for summary judgment on the plaintiff's claim that the defendants could be held liable for their failure to disclose their financial stake in the gene therapy program. In a question of first impression, a Massachusetts Superior Court held that the Massachusetts common law definition of informed consent was broad enough to allow the imposition of tort liability on a doctor who fails to disclose to his patient that he has a financial interest in the treatment that he recommends. Id.

The following year, the same court denied the defendants' motion for summary judgment on several claims against Dr. Isner, including gross negligence and deceit, but granted summary judgment on the negligence claim against VGI. The court held that the investigators had the duty to obtain informed consent, not VGI as the sponsor. Darke v. Isner, No. 022194E, 2005 WL 3729113 (Mass. Super. November 22, 2005).

Practical Implications and Conclusions

The New Guidelines stress that sponsors and applicants of covered clinical studies must act with due diligence to obtain and report the financial information of clinical investigators. The FDA clearly expects that clinical investigators will fully disclose and update their financial information to sponsors, that sponsors will appropriately collect the financial information at the earliest opportunity, and that applicants will ensure that the financial information is accurately and timely reported to the FDA. Although these measures are aimed at ensuring the integrity of clinical research data, the bright-line guidelines may also result in more lawsuits against pharmaceutical and medical device companies. Thus, product liability attorneys should be familiar with these Guidelines and be prepared to use the Guidelines to aid in the overall defense strategy.

The FDA's revised Guidance on the financial disclosure of clinical investigators reflects the greater expectations that the FDA will now have for clinical study sponsors, applicants and clinical investigators. It outlines specific measures that should be taken to obtain information from clinical investigators, ways to minimize potential bias, and the contents of financial disclosure questionnaires. Unfortunately, these checklists may provide ammunition to plaintiffs asserting various conflict of interest claims against your client. Clients should be advised of the New Guidelines and expectations of sponsors, applicants, and clinical investigators.

However, these Guidelines also could be used by defendant pharmaceutical and medical device manufacturers to help defend these claims. They could be used, for example, in further support of potential Buckman preemption arguments, as well as informed consent arguments.

Christiana Callahan Jacxsens, a shareholder at Greenberg Traurig, LLP, concentrates her practice on complex medical and product liability litigation, with a focus on pharmaceutical and medical device litigation. Jessica Cabral, an associate with the firm, concentrates her practice on complex product liability litigation, with a focus on pharmaceutical and medical device litigation.