1. www.mwe.com Boston Brussels Chicago Düsseldorf Houston London Los Angeles Miami Milan Munich New York Orange County Paris Rome Silicon Valley Washington, D.C. Strategic alliance with MWE China Law Offices (Shanghai) © 2012 McDermott Will & Emery. The following legal entities are collectively referred to as “McDermott Will & Emery,” “McDermott" or “the Firm”: McDermott Will & Emery LLP, McDermott Will & Emery AARPI, McDermott Will & Emery Belgium LLP, McDermott Will & Emery Rechtsanwälte Steuerberater LLP, MWE Steuerberatungsgesellschaft mbH, McDermott Will & Emery Studio Legale Associato and McDermott Will & Emery UK LLP. These entities coordinate their activities through service agreements. McDermott has a strategic alliance with MWE China Law Offices, a separate law firm. This communication may be considered attorney advertising. Prior results do not guarantee a similar outcome. Managing Conflicts of Interest in Large-Scale Industry Partnerships – June 12, 2012 Jennifer S. GeetterRobert H. Underwood, Ph.D. 202-756-8205617-535-4093 jgeetter@mwe.comrunderwood@mwe.com Does not represent legal advice.

2. www.mwe.com2 Introduction & Agenda Agenda: Review illustrative examples in the financial lifecycle of biomedical innovation in large provider-industry partnerships to illustrate the multi-dimensional opportunities and challenges related to these interwoven and overlapping financial relationships from both the perspective of industry and institutions  Current trends in institution-industry partnerships  Illustrative examples of research collaboration models – mid-size, large and very large  Best practices in COI policy and procedure development  Review of the latest developments regarding the sunshine provisions  Strategies for going forward using the illustrative case studies

3. Does not represent legal advice. www.mwe.com3 Current Trends in Institution-Industry Partnerships

4. Does not represent legal advice. www.mwe.com4 Where We Are…  Manufacturers are recognized as part of the health care (not just product) industry by regulators, media and consumers  Manufacturers will continue to interact closely with customers in leading- edge relationships  Many new and novel players on the life sciences scene  Financial relationships between industry and institutions involved in biomedical research and innovation are both complex and commonplace.  Enforcement priority for regulatory bodies, the plaintiffs bar, industry trade associations and the media.  Institutions have responded by restructuring and enhancing internal conflict of interest programs.  Industry needs to accelerate its response.

5. Does not represent legal advice. www.mwe.com5 Challenge of Institution - Industry Partnerships Maximize Collaboration, Input & Resources – Resist institutions and innovators from working in a vacuum Minimize conflicts of Interest and Commitment – Preserve research/clinical independence, and protect patients, subjects and the integrity of the scientific process

6. Does not represent legal advice. www.mwe.com6 It takes two to tango  Industry and Providers share a common commitment to innovation Benefits to Industry  Access to scientist/physician talent and insight – new opportunities – product experience post market  Access to physician insight into off-label treatment experiences and critical demand therapies  Access to potential subjects to accelerate research recruitment  Access to longitudinal clinical data and biospecimens  Creates a steady/steadier pipeline of early-stage ideas from start-ups through provider incubators  Provides the “brand” of the participating institutional provider Benefits to Institutions  Access to capital, facilities and resources  Positions the entity to capitalize on intellectual property  Strengthens and deepens existing research programs  Accelerates bench to bedside development by facilitating licensing and other commercializing deals  Enables serving as an incubator for local, often physician-led start-ups  Responds to the scientific interests of faculty and privileged-physicians with institutional control and buy in  Enables physicians to have input into biomedical innovation informed by their experience treating patients

7. Does not represent legal advice. www.mwe.com7 Illustrative Examples of Collaboration Models

8. Does not represent legal advice. www.mwe.com8 Key Provisions to All Partnerships  Investigator Freedom  To direct research  To publish  Research Funding  Not tied to results  Not fee for service  Intellectual Property No matter the size or complexity of a collaboration, these terms will need to be carefully considered.

9. Does not represent legal advice. www.mwe.com9 Intellectual Property  Ownership of Research Results and IP – Sole and joint IP may result from partnership – Provide a framework to obtain exclusive rights in all partnership IP Must work with Institution’s goals to commercialize First option to license – Time limit on option – Fixed period of time for license negotiations after option is exercised – Framework to resolve disputed terms Right of first refusal Any Rights not licensed by Industry become sole property of Institution

10. Does not represent legal advice. www.mwe.com10 Intellectual Property  Licenses – Scope of license and filed of use Exclusive, nonexclusive, sublicense Limited to particular indications, geographic limitations Reservations – Who controls patent prosecution – Up front fees – Milestones – Royalties – Rights/obligations to enforce patents and division of any damages recovered

11. Does not represent legal advice. www.mwe.com11 Collaboration Models “Small(er) Scale” Partnership  Prototype – One Principal Investigator and one Industry funder – Usually with focused objectives but multiple trials Particular area of basis or clinical research – May involve both industry-sponsored and industry-granted research – May incorporate translational research initiatives  Principal Investigator may or may not have financial relationship with funder or funder’s competitors

12. Does not represent legal advice. www.mwe.com12 “Small Scale” Partnership Institution IP License for certain technology For Profit Development Company Faculty Researchers License Fees Sponsored Research

13. Does not represent legal advice. www.mwe.com13 Collaboration Models Large Scale Partnership: Consortiums  Institution-Industry Research Consortium – Several Institutions and several funders – Jointly administered with priorities adjusted from time to time Usually fund a set number of projects per year – Usually focused on pre-competitive technology development – Industry members may obtain non-exclusive (royalty free) rights to IP – Projects may graduate to targeted research partnerships funding by individual industry members – Lower cost way for industry to collaborate with Institutions

14. Does not represent legal advice. www.mwe.com14 Consortium Jointly Administered Collaboration Results/IP Multiple Institutions Multiple For Profit Development Companies Technology Infrastructure Financing Innovations Research funding Technical support Non-exclusive license Results/IP for research Publication rights Possible sole ownership of Results/IP

15. Does not represent legal advice. www.mwe.com15 Collaboration Models Large(r) Scale Partnerships  Key Feature is the scope of Institutional involvement – One to multiple Institutions – Multiple departments, Principal Investigators  Objectives may be defined, semi-defined or undefined – diseases or disease areas – “Open innovation”  Jointly Administered  Often resemble aspects of venture capital – Usually funder makes a substantial financial commitment for period of years – Funder seeks to be able to obtain exclusive IP rights

16. Does not represent legal advice. www.mwe.com16 Large(r) Scale Partnership Jointly Administered Collaboration Results/IP Institution(s) For Profit Development Company Technology Infrastructure Financing Innovations Research funding Technical support First option to Results/IP Results/IP for research Publication rights Possible sole ownership of Results/IP Royalties, Milestones

17. Does not represent legal advice. www.mwe.com17 Best practices in Conflicts of Interest Policy and Procedure Development

18. Does not represent legal advice. www.mwe.com18 Sales and marketing Pricing practices Payments to consultants* Scientific advisory board participation* Speakers Bureaus* Research grants arrangements CME funding Business entertainment, gifts, and travel reimbursement Charitable Donations Off label promotion Credit for published works Recruitment Bonuses Start-up Board Membership* Equity in Biomedical Companies Intellectual Property Tenure * May also present Conflict of Commitment considerations Sources of Common Conflicts of Interest Involving Research

19. Does not represent legal advice. www.mwe.com19 Laws and Standards  Laws: – Federal and state sunshine laws – Public Health Service COI Regulations – FDA Financial Disclosure Regulations – Anti-Kickback Law – Stark Law (not directly relevant to manufacturers, but important to know) – False Claims Act – Other Health Care Related and General Federal Criminal Laws – Federal Food, Drug and Cosmetic Act and FDA regulations concerning labeling, promotion and advertising – State law versions of the false claims, anti-kickback and self-referral law – Medicare Marketing Guidelines – Foreign Corrupt Practices Act – Case Law  Standards – OIG Compliance Program Guidance for Pharmaceutical Manufacturers – Professional Codes (PhRMA, AdvaMed Code) – Media Scrutiny – AAMC/AAU Conflict of Interest Guidance – Emerging Best Practices From Experience

20. Does not represent legal advice. www.mwe.com20 Law or Benchmark?  Certain laws apply in some but not all cases  State law may be contradictory, unclear and more stringent  Where two or more regulations apply, care must be taken to meet the requirements of both  Even when the regulations do not apply to one party, they may apply to the other party – for example, the research sites and investigators, but not the industry entities  Even when the regulations do not apply, a party may have policies and procedures that incorporate similar standards  Even when the regulations do not apply, they can be useful as a set of widely accepted norms  Even when the regulations do not apply, participants should be careful about departures since the public and courts may consider these regulations minimum standards

21. Does not represent legal advice. www.mwe.com21 Conflicts of Interest: New PHS Guidance  Responsibility of Applicants for Promoting Objectivity in Research for which Public Health Service Funding is Sought and Responsible Prospective Contractors – August 25, 2011: Public Health Service (PHS) released a Final Rule substantially changing the reporting requirements for PHS-supported research  Broadens the definition of individuals who must disclose Interests – Institutions must provide access on a publicly available website for certain disclosed interests of Key Personnel and Senior/Key Personnel Investigator Key Personnel and Senior/Key Personnel Investigator Principal Investigator Project Director Any other individual responsible for the design, conduct or reporting of research funded by PHS Senior/Key Personnel Principal Investigator Project Director Any other individual responsible for the design, conduct or reporting of research funded by PHS Key Personnel Principal Investigator Project Director Any other personnel considered to be essential to work performance

22. Does not represent legal advice. www.mwe.com22 Conflicts of Interest: New FDA Guidance  Guidance for Clinical Investigators, Industry, and FDA Staff: Financial Disclosure by Clinical Investigators – May 25, 2011: FDA released draft guidance on financial disclosures and conflicts of interest for studies submitted in marketing applications  FDA requires certain financial disclosures by Clinical Investigators (21 C.F.R. Part 54) – Draft Guidance clarifies the significant role of Sponsors and Applicants in ensuring sufficient disclosure of interests held by Clinical Investigators  Why is this important? – FDA may refuse to file a marketing application that does not contain the required financial disclosure information (21 C.F.R. § 54.4(c)).

23. Does not represent legal advice. www.mwe.com23 Conflicts of Interest: New PHS Guidance, Continued  Lowers the threshold reporting requirements for disclosing Significant Financial Interests in publicly traded entities  Calculating Interests Held in Publicly Traded Entities – What: Remuneration or equity value, when aggregated, exceeds $5,000 – How: Calculate all remuneration or equity value received from the publicly held company – When: Measure all remuneration or equity retroactively for the 12 months preceding the disclosure Now: $10,000 when aggregated No later than August 24, 2012: $5,000 when aggregated

24. Does not represent legal advice. www.mwe.com24 FDA Conflicts of Interest Guidance Requirements under FDA Regulations and Draft Guidance  Sponsor/Applicant must collect information regarding certain financial interests or arrangements held by Clinical Investigators  Sponsor/Applicant must submit financial disclosure statements (FORMS FDA 3454 and 3455)  Sponsor/Applicant must describe steps taken to minimize any bias from the financial arrangements or relationships of the Investigator  Sponsors/Applicants must have procedures in place to confirm financial disclosures and management strategies Implications for Sponsor/Applicants  Sponsors/Applicants are responsible for collecting financial information from Clinical Investigators involved in the studies submitted in any marketing application  Sponsor/Applicants should have conflict of interest policies in place that contain strategies to manage interests held by Clinical Investigators  Sponsor/Applicants should have procedures in place to review and confirm the conflict of interest programs at Institutions conducting the studies

25. Does not represent legal advice. www.mwe.com25 Important Takeaways from Draft FDA Guidance  Draft FDA Guidance reiterates the importance of conflicts of interest for pharmaceutical companies – Sponsors/Applicants must work closely with FDA to minimize the bias from a conflict of interest so that a clinical trial may be used in a marketing application – Raises the bar for Sponsor/Applicants to ensure that institutions conducting clinical studies have proper conflict of interest disclosure procedures in place  Create conflict of interest policies and procedures to minimize the risk that FDA will refuse to file a marketing application

26. Does not represent legal advice. www.mwe.com26 Definitions Individual Interest – An interest held by an individual or that individual’s immediate family. Institutional Interest – An interest held by the institution directly or indirectly. Match – Two or more Interests or Commitments with the same third-party that need to undergo Conflict of Interest review. COI Component – An Interest or Commitment that is part of a Match. Commitment – An Interest that involves an activity outside of the individual’s main institution – for example, serving on a board of directors or working as a consultant. Imputed Interest – An interest held by an individual that is imputed to the organization by virtue of that individual’s authority and decision-making capacity within the organization Conflict of Interest - An Interest that has the potential to compromise or bias the professional judgment or objectivity of the holder of the Interest, or has the appearance of having the potential to compromise or bias the professional judgment of the objectivity of the holder of the Interest √ Practice Tip : A conflict of interest can exist when there is no allegation that a researcher actually acted improperly. The threshold is about appearances and possibilities. √ Practice Tip: Conflicts of Interest always involve the appearance/actual use of a person's authority for personal and/or financial gain. √ Practice Tip: Conflicts may involve both individuals and institutions

27. Does not represent legal advice. www.mwe.com27 Four Steps to Identifying, Assessing and Managing Conflicts of Interest  Competent Conflicts of Interest Committee oversees management  All Interests must be reported by Covered Persons  All Interests must be assessed to determine if they are Conflicts of Interest. The assessment must follow pre-set criteria and must take into account whether the Holder is a key decision-maker or a member of the Research Team  Identified Conflicts of Interest must be reviewed by the appropriate Conflicts of Interest Committee to determine an effective management strategy or to determine that there is no effective management strategy available and the Conflict of Interest bars the holder from proceeding:  To whom should the Conflict of Interest be disclosed?  What information regarding the Conflict of Interest should be disclosed?  Are changes in personnel or participation necessary? Chinese Wall?  Does the make-up or nature of the Financial Interest need to change  The Conflicts of Interest Committee must maintain oversight of the Conflict of Interest to verify that the management strategy is implemented and remains sufficient to manage the Conflict of Interest Reporting Assessment Management Oversight

28. Does not represent legal advice. www.mwe.com28 Emerging Best Practice Considerations  The AAMC-AAU Reports, experiences of institutions under enforcement and media scrutiny, and evolving reactions and approaches to conflicts of interest suggest consensus on certain elements and on-going debate on others. Consensus Standards: 1.Potentiality-based definition of conflicts of interest 2.Detailed disclosure/Elimination of discretion of the disclosing party 3.Focus on Institutional & Imputed Conflicts 4.Broad-based disclosures to human subjects 5.Consistent rules across funding sources 6.SOPs that cover disclosure, assessment, management and oversight 7.Initial and on-going training standards 8.Development of Conflict Management Plans & On- going Oversight 9.Moving beyond legal standards to best practices 10.IRB is not enough! On-going Consideration: 1.Functionality of a Rebuttable Presumption Standard with Compelling Circumstances Exception 2.Approach for the integration of conflicts program into related compliance functions 3.Abandon thresholds 4.Universal Watch List Mechanisms 5.Composition of COI committee

29. Does not represent legal advice. www.mwe.com29 Overview of Sunshine Provisions

30. Does not represent legal advice. www.mwe.com30 What are the Federal “Sunshine Provisions”?  Section 6002 of the Patient Protection and Affordable Care Act – Seeks to increase transparency in the financial relationships between (1) industry and group purchasing organizations (GPOs) and (2) physicians and hospitals – Balances two goals: (1) discouraging relationships that undermine scientific integrity, and (2) allowing beneficial collaborations – Requires certain entities to report to the Secretary of the Department of Health and Human Services (HHS) certain financial relationships  GPOs and life sciences industry entities – even those with robust fraud and abuse compliance programs – will need to make significant operational changes to comply with these requirements

31. Does not represent legal advice. www.mwe.com31 The Proposed Rule: The Basic Requirements  Issued by the Centers for Medicare & Medicaid Services (CMS) on December 19, 2011, to implement the Sunshine Provisions (comment period closed February 17, 2012) – The Proposed Rule tracks many of the statute’s requirements, but also proposes to refine the statute in important ways that are not necessarily intuitive  Three key requirements (tracks the statute): 1.“Applicable Manufacturers” of covered drugs, devices, biologicals, and medical supplies must annually report to HHS: Payments or other transfers of value to physicians and teaching hospitals (“Covered Recipients”) 2.“Applicable Manufacturers” and “Applicable GPOs” must annually report to HHS: Ownership or investment interests held by physicians or their immediate family members 3.HHS must publish this information on a website (data must be searchable, clear and understandable, and easily aggregated and downloaded)

32. Does not represent legal advice. www.mwe.com32 Who Must Report?  Applicable Manufacturer: An entity: – (1) “Engaged in the production, preparation, propagation, compounding, or conversion of a covered drug, device, biological, or medical supply for sale or distribution in the United States [or a territory, possession, or commonwealth thereof],” OR – (2) “Under common ownership with an entity in paragraph (1) of this definition, which provides assistance or support to such entity with respect to the [activities described in paragraph (1)].” Note: “All or nothing” definition (one covered product renders a manufacturer an Applicable Manufacturer, including start-up companies with most products still in development stage) Includes companies that operate globally but sell/distribute covered products domestically Includes companies that hold FDA approval of a covered product but outsource manufacturing  Applicable GPO: An entity:  (1) Operating in the U.S. (or a territory, possession or commonwealth thereof), AND  (2) that “[p]urchases, arranges for or negotiates the purchase of a covered drug, device, biological, or medical supply for a group of individuals or entities, and not solely for use by the entity itself.” Note: Includes physician owned distributors (PODs) that purchase covered products for resale or distribution “Covered drug, device, biological, or medical supply” means “[a]ny drug, device, biological, or medical supply for which payment is available under [Medicare, Medicaid, or CHIP], either separately, as part of a fee schedule payment, or as part of a composite payment rate ….” Excludes: Certain exclusions, for example, over-the-counter (OTC) products

33. Does not represent legal advice. www.mwe.com33 Who Are the Targeted Receivers of Value?  Covered Recipients of Payments or Transfers of Value From an Applicable Manufacturer: – Means a physician (other than a physician who is an employee of an Applicable Manufacturer); OR – A teaching hospital  Physicians and Their Immediate Family Members Who Hold Ownership or Investment Interests in an Applicable Manufacturer or Applicable GPO: – “Physician” includes “doctors of medicine and osteopathy, dentists, podiatrists, optometrists, and licensed chiropractors” Note: Unlike Covered Recipients, this category includes physicians employed by the Applicable Manufacturer or Applicable GPO

34. Does not represent legal advice. www.mwe.com34 What are the Covered Financial Relationships?  Payments or other transfers of value: Must be reported unless explicitly excluded – Examples of exclusions: Transfers of less than $10 (unless aggregate amount to a Covered Recipient exceeds $100 in a calendar year) Product samples Manufacturer discounts, including rebates Dividend, profit distribution from, or ownership/investment interest in publicly traded securities or mutual funds Indirect transfers through a third party where Applicable Manufacturer is “unaware” of the identity of the Covered Recipient  Ownership and investment interests – E.g., stock; partnership shares; LLC membership; loans, bonds, or other financial instruments secured with property or revenue – May be direct or indirect, and through debt, equity, or other means – Excludes: Interests in a publicly traded security or mutual fund Retirement plan interests held by a physician (or immediate family member) by virtue of employment with the Applicable Manufacturer or Applicable GPO Stock options and convertible securities received as compensation, unless excercised or converted to equity

35. Does not represent legal advice. www.mwe.com35 Reporting Payments and Other Transfers of Value  Each Applicable Manufacturer must timely file an annual report of all payments or other transfers of value  For each payment or other transfer of value, the report must include the: Name, business address, specialty, and NPI of Covered Recipient Date and amount of payment or other transfer of value Associated covered drug, device, biological, or medical supply (if applicable) Form of payment or other transfer of value (cash or cash equivalent; in-kind items or services; or stock, stock option, or any other ownership interest, dividend, profit, or return on investment) Nature of payment (each payment or other transfer of value must be categorized in one of 14 specified categories, such as consulting fee, gift, entertainment, food and beverage, research, or “other”) Special Rules for Research Payments – Limited to “bona fide” research, including clinical investigations subject to both a written agreement and research protocol – Report must indicate whether it is a direct research payment (provided directly to the physician or teaching hospital Covered Recipient) or indirect research payment (provided to research institution which in turn pays the physician Covered Recipient(s) serving as principal investigator(s)) – For indirect research payments or other transfers of value, the report must include the Covered Recipient principal investigator’s name and NPI Note: The Proposed Rule requires Applicable Manufacturers to report the entire payment amount for each research-related payment, rather than the specific amount provided to the Covered Recipient, even if the research budget itemizes the Covered Recipient principal investigator’s compensation. However, on its public website, CMS would publish the separate research payment amount for physician Covered Recipients rather than aggregate the information. (For teaching hospital Covered Recipients, however, the entire amount would still be aggregated.)

36. Does not represent legal advice. www.mwe.com36 Reporting Physician Ownership or Investment Interests  Each Applicable Manufacturer and Applicable GPO must timely file an annual report of ownership or investment interests held by a physician or an immediate family member thereof  The report must include: Whether the ownership or investment interest is held by a physician’s immediate family member Name, business address, specialty, and NPI of physician Dollar amount of investment and the value and terms of each ownership or investment interest The data required for payments and other transfers of value if any payment or other transfer of value was made to a physician holding an ownership or investment interest

37. Does not represent legal advice. www.mwe.com37 Penalties  Potential civil monetary penalties for noncompliance – $1,000 - $10,000 for each payment or other transfer of value or ownership/investment interest not reported as required $150,000 maximum annual penalty – $10,000 - $100,000 for each payment or other transfer of value or ownership/investment interest) in case of knowing failure to report $1,000,000 maximum annual penalty  Factors to be considered in setting penalty include: – Length of time of failure to report, including the length of time the Applicable Manufacturer and Applicable GPO knew of the payment or other transfer of value or ownership/investment interest – Amount of unreported payment or transfer of value or ownership/investment interest – Level of culpability – Nature and amount of information reported incorrectly – Degree of diligence in correcting the error

38. Does not represent legal advice. www.mwe.com38 Implementation Delays Statutory Timeline: Initial reports due by March 31, 2013 (for data from CY 2012). Subsequent reports due by the 90th day of each calendar year. The Secretary of HHS was to establish procedures for implementing these requirements by October 1, 2011. However, CMS did not issue a Proposed Rule until December 19, 2011. As a result, CMS proposed to not require data collection until after it issued a final rule, and that it was considering requiring the reporting of some CY 2012 data by March 31, 2013. CMS Announces Additional Delay: Then, on May 3, 2012, CMS announces it will not require Applicable Manufacturers and Applicable GPOs to begin collecting data before January 1, 2013. The agency notes it received over 300 comments to the Proposed Rule and that it “intends to release the final rule later this year.” Sens. Chuck Grassley and Herb Kohl, authors of the Sunshine Provisions, expressed disappointment, noting that, “[g]iven all of the extra time, CMS will have no further excuses for not [properly implementing the statutory requirements].” With a final rule to be issued in late 2012 and data collection to possibly begin January 2013, regulated entities will have a compressed timeframe in which to build compliance programs. Consider beginning the development process based on the statutory provisions, using the Proposed Rule as a guidepost.

39. Does not represent legal advice. www.mwe.com39 The Devil is in the Details  The Proposed Rule contains several important ambiguities, including: – the difference between research, development, and clinical investigations for purposes of determining eligibility for delayed publication of research payments – how to categorize compensation for physicians serving in roles other than principal investigator in connection with research – what types of entities may fall within the definition of “teaching hospital” in light of various complicated corporate structures – the specific parameters regarding when multiple entities under common ownership have the option to submit a collective report  Given the breadth of the Proposed Rule and the extensive comments CMS received, some of these finer details may get lost

40. Does not represent legal advice. www.mwe.com40 Research Contracting: What’s in a Name?  Common Mistake: Equating “sponsor” with “funder” – sponsor is a term of art under the FDA regulations  Critical to clearly establish in a research agreement if there is a sponsor (and if so, whom) and if not, at whose behest the trial is being conducted  Minimizing Risks:  Distinguish between grantor and sponsor  No obligation for 100% funding by a non-sponsor funder  Clearly document the grantor’s reason for providing funding and in what amount  Demonstrate the research study’s scientific bona fides  Consider requiring a DSMB or other independent reviewers of scientific merit and on- going safety  Coordinate decision to seek and receive grant funding with COI programs  Monitor extent, frequency, types of financial relationships between grantee and grantor Sponsor ≠ Funder

41. Does not represent legal advice. www.mwe.com41 Strategies for Going Forward

42. Does not represent legal advice. www.mwe.com42 Lifecycle of Financial Considerations In Biomedical Innovation Research Studies Intellectual Property Protections Conflict of Interest Management Research Funding Individual & Institutional Provider/Industry Collaborations Clinical Trial Billing/Financial Management Vendor Contracts CME and Publications  Institutional Provider-Industry Partnerships Occur Against a Backdrop of Other Financial Relationships that Must be Considered as Part of Conflict of Interest Management

43. Does not represent legal advice. www.mwe.com43 Later: Cardiologist submits a Research Application to the Research Support Office, including her Research Protocol Disclosure Statement disclosing the SAB compensation Interest First: Cardiologist discloses the SAB compensation Interest on her Annual COI Dislcosure Statement to Corporate Compliance COI Committee COI Committee determines whether the Interest poses an Individual Conflict of Interest in the cardiologist’s clinical practice. If so, the COI Committee determines if a management strategy is necessary. Universal Watch List Research Support Office Research Support Office confirms that there are no additional interests in or adverse to DEF registered in the Universal Watch List COI Committee reviews the cardiologist’s Protocol Disclosure Form, Annual COI Disclosure Form, and the absence of any hits on the Universal Watch List to identify the Individual Conflict of Interest held by the cardiologist and whether a management strategy is necessary, for example, disclosure in the informed-consent authorization form. Corporate Compliance Corporate Compliance updates Universal Watch List IRB COI Committee communicates with IRB to implement management strategy Management in Motion – Useful baseline  A cardiologist on the ABC Hospital medical staff is a nationally recognized leader in her field. As a result of her reputation and expertise, she is approached by DEF company to sit on the DEF scientific advisory board, which advises DEF on product development. The cardiologist holds DEF’s products in high regard, so she accepts the offer and is paid and accepts $5,000.00 for each all-day scientific advisory board meeting she attends, usually 3-4/year. Over time, she becomes very familiar with DEF’s products and is instrumental in identifying potential improvements. She also routinely prescribes DEF’s products to her patients but her patients are not aware of her compensation relationship with DEF. As a result of the cardiologist’s expertise and familiarity with DEF’s products, DEF asks if she will conduct a Phase III clinical research study at ABC hospital to test the safety and efficacy of DEF’s product. She remains a paid member of the scientific advisory board.

44. Does not represent legal advice. www.mwe.com44 Later: CFO discloses Institution's Interest on Institution's Continuing COI Disclosure Statement to Corporate Compliance COI Committee COI Committee determines whether the Interest poses a Direct Institution Conflict of Interest because of Institution's updated COI disclosure, and if so, whether a management strategy is now necessary, for example, additional oversight by a DSMB and possible forfeiture of the subsidy. First: Oncologist submits a Research Application to the Research Support Office, including her Research Protocol Disclosure Statement disclosing he has no Interests COI Committee reviews the investigator’s Protocol Disclosure Form, Annual COI Disclosure Form, and the absence of a hit on the Universal Watch List and determines there are no Conflicts of Interests. Corporate Compliance updates Universal Watch List Universal Watch List Research Support Office confirms no Universal Watch List Hits Corporate Compliance DSMB Oversight DSMB Research Support Office Management in Motion – Unintended Effects of Large Scale Partnerships on Existing Research  An oncologist on the ABC Hospital medical staff is conducting an investigator-sponsored research study. The goal of the research study is to determine whether a drug manufactured by DEF that is effective in fighting lung cancer in adults also may be effective in children. Although DEF is not interested in sponsoring the study, it recognizes its important public health benefits and has provided a grant to the oncologist in the form of the drug at no cost and $25,000. Without this grant, the oncologist could not have conducted the research. When she began the study, the ABC Hospital Conflict of Interest Committee informed her that there were no Individual, Institution or Imputed Conflicts of Interest. Six months later, DEF awarded ABC Hospital a $100,000 grant to support ABC Hospital’s building a new heart center. The ABC officials who awarded the grant were not aware of the study and the oncologist had no part in seeking the grant. The study is on-going.

45. Does not represent legal advice. www.mwe.com45 First: Material management discloses ABC’s formulary negotiations on Institution's Annual COI Dislcosure Statement to Corporate Compliance COI Committee Later: Institution works through the RSO to enter into a multi-study collaboration with DEF (through an “update” to its Annual COI Disclosure Statement) and submits this pending Institutional Interest as well as notice of multiple, pending studies with DEF. Universal Watch List COI Committee reviews the Annual COI Disclosure Forms and the Universal Watch List’s hit of Institution's Interest to identify the Institutional Conflict of Interest and whether it can be managed. Corporate Compliance updates Universal Watch List Research Support Office Identifies Institution's Interest using the Universal Watch List Corporate Compliance Research Support Office Management in Motion – Management Beyond Research  DEF Company believes it manufacturers a superior anti-nausea drug to the drug that ABC Hospital currently has on its inpatient formulary purchase list. Therefore, the marketing/sales division of DEF Company is currently working with ABC its oncologists to present the clinical data that demonstrates that ABC Hospital should add DEF product to its inpatient formulary. At the same time, the research and development division of DEF is entering into a collaboration arrangement ABC Hospital to conduct DEF-sponsored research.

46. Does not represent legal advice. www.mwe.com46 Universal Database of Interests Research Sponsors & Funders Vendors COI Reporting Forms Formulary Drug Manufacturers Pharmacy and Therapeutics Committee All Purchasing Officials Research Support Office/Division Board of Directors or Trustees Universal Watch List – Institutional Providers Functional Areas Across an Institutional Provider Need to Report Interests to Common, Integrated Databank

47. Does not represent legal advice. www.mwe.com47 Universal Watch List -- Industry Universal Database of Interests Sales Grant Agreements Speaker Bureaus Institutional Relationships Research Sponsorship Agreements Advisory Boards Grant Applications Functional Areas Across an Industry Entity Need to Report Interests to Common, Integrated Databank while Maintaining Firewalls

48. Does not represent legal advice. www.mwe.com48 Approaches for Large-Scale Collaborations  Have a robust conflict of interest program in place – lends credibility to the collaboration process  Distinguish between basic and clinical research  Assess the relative IP rights of investigators versus home institutions  Balance subject safety concerns – especially relevant for Phase I trials  Look for opportunities for upfront, project-wide (not study-specific) management approaches  Vet conflicts in advance – do not safe this for closing time  Have multi-party buy-in to the conflict of interest process and management plan

49. Does not represent legal advice. www.mwe.com49 Thank you