Technology Transfer Tactics Audio Conference July 22 , 2009

1. Technology Transfer TacticsAudio ConferenceJuly 22 , 2009 Conflict of Interest in University Research:Strengthen Your Process and Policies Bernadette M. Broccolo McDermott Will & Emery, LLP 312-984-6911 bbroccolo@mwe.com

2. Focus • Conflicts of interest in research, clinical care and medical education arising from relationships between universities, their faculty, institutional providers, healthcare professionals and pharmaceutical, medical device and biotech companies. • The laws and regulations v. Industry Standards/Emerging Best Practices. • Provider and Industry response to call for reform. • Interplay with other compliance risks and challenges relating to: • Fraud and abuse and false claims enforcement • Off-label promotion enforcement • Industry trade association ethical standards • Medical profession ethical standards • The New Frontier www.mwe.com 5060964.3

3. Provider/Industry Relationship Puzzle The Many Pieces Individual and Institutional Royalty and Equity Interests in IP and Spin-Off Companies Sales and marketing Research sponsorship and grants arrangements Recruitment bonuses Consulting Agreements Business entertainment, gifts, and travel reimbursement Charitable Donations Pricing practices Speakers Bureaus CME funding Credit for published works Other Institutional Relationships Scientific advisory board participation www.mwe.com 5060964.3

4. Provider/Industry Relationship PuzzleThe Underlying Rationales and Realities • Manufacturers will continue to interact closely with academia and provider customers in both traditional and leading-edge relationships.  • Manufacturers have an increasing array of products that providers need – increased diversity in the market place of biotech, pharma, clinical lab diagnostics and device companies. • Manufacturers, academia and providers share a common commitment to innovation and their collaboration fuels it. • Financial relationships between industry and academia/providers involved in biomedical research and innovation are both complex and commonplace. • Industry-sponsored research is a source of income/capital generation for academia/providers and participation in such research can enhance their reputation. www.mwe.com 5060964.3

5. Provider/Industry Relationship PuzzleThe Underlying Rationales and Realities • Physicians need valuable information from industry to enhance clinical decision making. • Industry has resources to underwrite medical education and conferences, fund research, and provide philanthropic support for growth and development of physical plant and centers of excellence. • Manufacturers are recognized as part of the health care industry by regulators, media and consumers. • These relationships have become a top enforcement priority for regulatory bodies, the plaintiffs bar, industry trade associations and the media (national, regional and local levels). www.mwe.com 5060964.3

6. Variations on a Theme • The concerns arising from all of these financial relationships are variations on a common theme: They create undue influence that can: • Impair judgment in research resulting in risk to human subjects and unreliable data underlying new product development; • Change medical prescribing behavior that can pose harm to patients and increase costs to government payment programs; or • Diminish the objectivity and integrity of the content of medical educational programs and materials. www.mwe.com 5060964.3

7. Historical Perspective:Where We Have Been • Federal policy beginning in 1980 (Bayh-Dole Act) • Encouraging institutions to seek private investment for research. • Allowing researchers and institutions to share in the financial return on successful products/inventions. • Well established bodies of law governing COIs in research working hand-in-hand with the Bayh-Dole philosophy are inadequate for today’s needs. • Federal Common Rule and HHS Guidance on Conflicts, FDA, NIH/PHS • Applies only to federally-funded and FDA-regulated research • FDA/NIH/PHS • Focus primarily on preserving objectivity in the study and integrity of the data, not also safety of subjects. • Disclosure to and assessment by FDA occurs late in the research life-cycle. • Focus only: • individual conflicts of PIs, not individual conflicts of other research team members. • Individual and not institutional conflicts of interest. • Reporting (not assessment and management) • Use dollar thresholds for disclosures of interests (“significant financial interest”). • Relies primarily on the IRB and PIs to address conflicts of interest. www.mwe.com 5060964.3

8. Historical Perspective:Where We Have Been Other Laws and Industry Standards Regulating Financial Relationships • Anti-Kickback Law • False Claims Act and Civil Money Penalties Laws. • Other Health Care Related and General Federal Criminal Laws • Medicare Marketing Guidelines • Foreign Corrupt Practices Act • Federal Food, Drug and Cosmetic Act and FDA regulations concerning labeling, promotion and advertising www.mwe.com 5060964.3

9. Historical Perspective:Where We Have Been Other Laws and Industry Standards Regulating Financial Relationships • State law versions of the anti-kickback and self-referral law • State laws regulating marketing of health care products • State consumer protection laws • Broadly worded consumer protection laws may be triggered by federal regulatory actions such as FDA warning letters • State False Claims Acts • The Deficit Reduction Omnibus Reconciliation Act of 2005 (DRA) includes provisions aimed at Medicaid false claims enforcement….. www.mwe.com 5060964.3

10. Historical Perspective:Where We Have Been • High profile cases of harm to clinical research subjects • Put spotlight on financial interests of researchers andinstitutions. • Increased focus on both individual and institutional COIs. • Focus on injury/harm to human subjects. • Myriad legal theories • Misrepresentation and fraud arising from failure to disclose COI. • Breach of fiduciary duty implied under informed consent. • Negligence, negligence per se. • Violation of right to be treated with dignity. • Assault/Battery (subject did not consent to research as conducted). www.mwe.com 5060964.3

11. Enforcement Activity • Pharmaceutical, medical device and biotech manufacturers have been and will continue to be the focus of the government’s intense and aggressive the government health care fraud and abuse initiatives. www.mwe.com 5060964.3

12. Late 2008-2009 Record-Setting Off-Label Promotion Settlements Off-Label Focus Areas • Scientific Advisory Board • CME Speakers • Speakers Bureaus • Product Development • Sales Force • Scientific Inquiries Recent Government Enforcement Activity has resulted in historic settlements with the pharmaceutical industry for alleged off-label activity September 2008 – Cephalon agreed to a $444 million fine, criminal plea and a 5-year Corporate Integrity Agreement (CIA) for alleged improper marketing of three of its drugs, Actiq, Gabitril and Provigi January 2009 – Eli Lilly Company agreed to pay $1.4 Billion to settle criminal and civil cases and entered into a five-year CIA regarding alleged off-label promotion of Zyprexa January 2009 – Pfizeragreed to $2.3 billion to resolve previously disclosed investigations regarding alleged improper promotion of Bextra, a drug that is now off the market www.mwe.com 5060964.3

13. Highlights of CIA Requirements • Post information regarding certain payments to physicians on the company web site • Greater management accountability through compliance certifications by the Board of the Directors and top management • Review of promotional detailing programs to examine physician recall of detailing messages and identify instances where off-label discussions may have occurred • Develop a database to track requests for off-label information that includes the name of the requesting health care professional and Lilly sales representative involved. • Policies and procedures addressing support for third-party educational activity and any financial relationships with faculty or speakers. www.mwe.com 5060964.3

14. State Attorneys General Also Pursue Off-Label Promotion • States have begun utilizing consumer protection laws and unfair trade practices laws to pursue off-label promotion • For Lilly and Pfizer, state AG settlements preceded the federal settlements: • Eli Lilly (October 2008) agreed to pay $62 million to 32 states and the District of Columbia to settle allegations of alleged off-label marketing related to its anti-psychotic drug Zyprexa. • Pfizer (October 2008) agreed to pay $60 million to states as part of an $894 overall agreement to resolve a series of lawsuits involving allegations of an illegal marketing campaign that encouraged physicians, hospitals, and health plans to prescribe Bextra in higher doses for “off-label” uses after the FDA had rejected Pfizer’s applications seeking authorization to use Bextra at higher doses. www.mwe.com 5060964.3

15. Catalysts for ChangeWhere We Are Now • Widespread scrutiny • Courts and the plaintiffs bar • Regulators • Legislators (State and Federal) • Industry and Professional associations • Patient advocates • The Media (national, regional, local) www.mwe.com 5060964.3

16. Catalysts for ChangeWhere We Are Now • Guidance from the OIG • Extensive and recently revised guidance from OIG and Major Trade Associations on Financial Interests between Providers and Industry Generally and CME specifically (PhRMA, AdvaMed, ACCME) • Extensive guidance from HHS, and Major Trade and Professional Associations (IOM, AAU, AAMC, AMA) on COI in Research and Clinical Care www.mwe.com 5060964.3

17. Government and Industry Guidance for Compliance with Fraud and Abuse Laws • OIG Compliance Program Guidance for Pharmaceutical Manufacturers • Other OIG guidance: http://oig.hhs.gov/fraud.asp • PhRMA and AdvaMed Codes • Both codes provide parameters for the full range of Interactions of their members with Health Care Professionals • Both codes were recently updated and contain tighter restrictions on industry interactions with healthcare professionals • Compliance with the Codes, along with an active compliance program, may be viewed favorably by the OIG and other enforcement agencies • But many of the physician relationships that have been characterized as improper by prosecutors and the press were drafted with the intent to comply www.mwe.com 5060964.3

18. Conflicts of Interest in Research and Clinical Care2006 AAMC/Mass General Survey Survey says … • 76% report they have established a committee evaluating individual financial conflicts of interest, but only 21% report that committee includes representation from outside as urged by AAMC task force. • A disappointingly low fraction of respondents report the SFI were evaluated by committee prior to IRB review and approval of conflicted research. • Only 38% report having policies to address institutional interests. • 55% report having policies to address interests of institutional officials. • The majority report separation of research operations from investment operations. • 54% reviews licensing agreements to identify potential conflicts of interest. • 85% monitor the research that is permitted to go forward despite a showing of SFI on the part of the researcher. • Between 60 and 65% disclose SFI to funders of research, editors of publications, oral presentations of research. • 42% disclose to other centers in a multi-center trial. www.mwe.com 5060964.3

19. Conflicts of Interest in Research and Clinical CareThe 2008 Report of the Joint AAMC/AAU Committee • Joint Committee of AAMC and AAU issued a Report on Conflicts of Interest in Research (the “Report”) on 2/28/08. • Reinforces and Refines Recommendations in AAMC and AAU 2001 and 2002 Reports. • The Report recommends that institutions take action within two years (2/28/10) to: • Accelerate the development of COI policies that cover the financial interests of faculty, Institutionsand their officials, including deans, department chairs and division chiefs. • Implement a reporting, evaluation and management process for both individual and institutional financial COI, that includes a review system that involves a standing internal committee or an external review entity. www.mwe.com 5060964.3

20. Institute of Medicine Report on Conflicts of Interest in Medical Research, Education and Practice • Issued in late April 2009 by the Institute of Medicine of the National Academies • Comprehensive coverage of conflicts of interest arising from industry relationships in all three areas of concern • Reinforces the standards set forth by AAMC and AAU in earlier reports (2008, 2002 and 2001) • Recognizes the need for industry/provider collaboration to advance science • Reinforces that “disclosure” of interests is not enough to address the risk • Calls for all the players to contribute to identifying and managing the conflict of interest risk arising from these relationships • Urges a commitment to self-reform as the alternative to government prescribed reform www.mwe.com 5060964.3

21. Key Recommendations: Increase oversight of grantee Institutions to ensure compliance with Federal financial COI regulations Require grantee Institutions to provide details regarding the nature of COI and its management Require NIH to maintain all COI from the grantee Institutions in a database Findings NIH could not provide an accurate count of the financial conflict-of-interest reports that it received from grantees during fiscal years 2004 through 2006. NIH is not aware of the types of financial conflicts of interest that exist within grantee institutions because details are not required to be reported and most conflict-of-interest reports do not state the nature of the conflict. Many Institutes’ primary method of oversight is reliance on grantee institutions’ assurances that financial conflict-of-interest regulations are followed. Latest DevelopmentsJanuary 2008 OIG Report: NIH Conflicts of Interest in Extramural Research www.mwe.com 5060964.3

22. Latest DevelopmentsNIH Proposed Rulemaking on Conflicts of Interest in Extramural Research • Published in May 2009 • Proposes changes to NIH’s 1995 conflict of interest rules for federally funded research • NIH Acting Director, Raynard Kington: • “Both the public and the private sectors are deeply involved in collaborative research efforts to meet public health needs … These collaborations are increasingly complex and it is important to consider if changes are needed to the regulations to ensure the integrity of the science.” • In addition to making changes to the rules, NIH seeks public comment on key issues such as expansion of the scope of interests to be disclosed, the definition of “significant financial interest”, and expansion of the regulations to address institutional interests. www.mwe.com 5060964.3

23. Latest DevelopmentsJanuary 2009 OIG Report: FDA Oversight of Financial Conflicts of Interest • On January 12, 2009, the OIG issued a report sharply criticizing the FDA’s oversight of financial conflict of interest information submitted by investigators conducting clinical trials.  • Federal regulations require clinical trial sponsors to collect and disclose certain financial interests of investigators that could create bias in the clinical research, such as serving as a consultant for the study sponsor or participating in the sponsor’s speakers bureau.  • The OIG report found significant deficits in the FDA’s ability to determine whether sponsors have submitted all necessary financial information and that FDA action in response to disclosed financial interests was inconsistent.  • Particularly noteworthy is the fact the some of the same types of financial relationships between industry and health care professionals that give rise to off-label promotion and false claims allegations are the basis for the government’s concern about the integrity of the clinical research process undertaken to support FDA market approval.  www.mwe.com 5060964.3

24. Latest DevelopmentsJanuary 2009 OIG Report: FDA Oversight of Financial Conflicts of Interest • Findings: • One percent of clinical investigators disclosed a financial interest • FDA cannot determine whether sponsors have submitted financial information for all clinical investigators. • Forty-two percent of FDA-approved marketing applications were missing financial information. • FDA did not document a review of any financial information for 31 percent of marketing applications. • Neither FDA nor sponsors took action for 20 percent of marketing applications with disclosed financial interests. www.mwe.com 5060964.3

25. Latest DevelopmentsJanuary 2009 OIG Report: FDA Oversight of Financial Conflicts of Interest RECOMMENDATIONS • FDA should ensure that sponsors submit complete financial information for all clinical investigators and use a complete list of clinical investigators to check that sponsors have submitted financial information for all clinical investigators. • FDA should check that sponsors have submitted all required attachments to financial forms. • FDA should update guidance to sponsors regarding the due diligence exemption. • FDA should add a review of financial information to the onsite inspection protocol. • FDA should ensure that reviewers consistently review financial information and take action in response to disclosed financial interests. • FDA should require that all centers consistently use a template that includes a prompt to document a review of financial information. • FDA should provide additional guidance and training to reviewers. • FDA should require that sponsors submit financial information for clinical investigators as part of the pretrial application process. www.mwe.com 5060964.3

26. Association Focus on Industry Influence Over Medical Education AAMC Report - Guidelines Addressing Gifts from Industry June 2008 • Industry Funding of Medical Education, Report of the AAMC Task Force offers guiding principles and recommendations for how medical schools and teaching hospitals should govern student and faculty interactions with industry. The report's objective is to prevent conflicts of interest that can distort therapeutic judgments and decision making. The AAMC's leadership is urging all association members to implement policies and procedures, consistent with the report's guidelines, by July 1, 2009. • Report proposes that academic medical centers: • Establish and implement policies that prohibit the acceptance of any gifts from industry by physicians, faculty, students and residents on- or off-site • Eliminate the receipt of drug samples or manage their distribution via a centralized process that ensures timely patient access throughout the health care system • Restrict access by pharmaceutical representatives to individual physicians by confining visits to non-patient areas and holding them by appointment only • Set up a central continuing medical education (CME) office to receive and coordinate the distribution of industry support for CME activities • Strongly discourage participation by faculty in industry-sponsored speakers' bureaus • Prohibit physicians, residents, and students from allowing presentations of any kind to be ghostwritten by industry representatives • ACCME – (June 2008) Issued a Call for Comments seeking industry input on revised policy proposals, including a consideration that commercial support be eliminated from CME. www.mwe.com 5060964.3

27. American Medical Student Association:Conflicts Of Interest Policy Scorecard • Scorecard evaluates conflict-of-interest policies at the 151 medical colleges and colleges of osteopathic medicine in the United States. • Assesses policies related to potential conflicts of interest created by industry marketing at the level of the individual physician and trainee. • Most recent results: of the 151 US medical schools, 8 received As (5%), 14 Bs (9%), 5 Cs (3%), and 24 Ds (16%). These totals include 11 institutions assessed since the original Scorecard release on May 30, 2008. • 52 schools (34%) receive a grade of F. This includes 16 that either submitted policies graded as F or indicated they had no relevant policies, as well as 13 schools that declined to submit policies and 23 that did not respond to repeated attempts at follow-up. • September 2008 JAMA Commentary published in the Journal of the American Medical Association indicates that stricter conflict-of-interest policies adopted by academic medical centers has not apparently been detrimental to staff retention. www.mwe.com 5060964.3

28. Congressional Focus:Failure to Report Payments from Manufacturers • Senate Finance Committee and Senate Committee on Aging have launched investigations over the last 2 years of industry/academia/provider relationships that can affect quality and integrity of CME, clinical care and research (Grassley) • Two Phases: Began in certain cases with industry companies and led to institutions and prominent clinicians/researchers • Harvard • Emory • CRF • University of Wisconsin • Developing support for “Sunshine” legislation and self-initiated reform www.mwe.com 5060964.3

29. Congressional Focus:Failure to Report Payments from Manufacturers Emory University • October 2008 Dr. Charles Nemeroff, Chair ofthe Emory University psychiatry department stepped down as chair of the department after the congressional investigation determined that Nemeroff regularly exceed the $10,000 limit for significant financial interests and failed to fully disclose payments received from Glaxo while he was simultaneously conducting research into Glaxo Drugs • Emory Settlement • PI failure to fully disclose financial relationships with industry entities • Emory as large recipient of NIH grant funds undertook extensive internal investigation that resulted in agreed-upon sanctions • PI permanently removed from Chair of Department • Tight restrictions on future participation in industry speaker bureaus, CME presentations, and scientific advisory boards, whether paid or unpaid • No participation in NIH grant applications for 2 years www.mwe.com 5060964.3

30. Congressional Focus:Failure to Report Payments from Manufacturers • January 2009 Senator Charles Grassley The Senator wrote a letter to the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) to investigate Emory University over possible research violations including: • Possible violation of National Institutes of Health’s (NIH) Conflict of Interest Rules for failure of physicians disclose conflicts on annual disclosure forms; • Possible violations of Institutional Review Board (IRB) protocols through failures to report conflicts on IRB forms and failure to report those IRB violations to the Office of Human Subject Research Protection (OHRP); • Possible violations of Federal Contracting Rules regarding commitment of time for NIH Grants because physician researchers spent significant time on the road giving promotional talks for drug companies;; and • Possible misleading information provided to NIH regarding the nature of physician activities as a consultant for drug companies www.mwe.com 5060964.3

31. Congressional Focus:Failure to Report Payments from Manufacturers University of Texas • Dr. Augustus John Rush, University of Texas, Southwestern Medical Center at Dallas. • In 2001, Dr. Rush disclosed $3,000 in outside income for his work as an Advisory Board Member for Eli Lilly. Lilly reported to Senator Grassley that it paid Dr. Rush $17,802 for that year. • Dr. Karen Wagner, University of Texas Medical Branch at Galveston. • From 2003 – 2004, Dr. Wagner was a member of the University’s committee for conflicts of interest. • Dr. Wagner did not make any financial disclosures to the University from 2000 – 2004. According to payment information reported to Senator Grassley by the manufacturers, in 2003, she received nearly $50,000 from various manufacturers, and in 2004, Dr. Wagner received close to $30,000 from various manufacturers. www.mwe.com 5060964.3

32. Congressional Focus:Dr. Rush vs. Industry Reported Payments www.mwe.com 5060964.3

33. New Focus on Physicians by Healthcare Agencies • According to a March 4, 2009 New York Times Article • Within a few months, federal officials “plan to file civil and criminal charges against a number of surgeons” who allegedly “demanded profitable consulting agreements from device makers in exchange for using their products.” “What we need to do is make examples of a couple of doctors so that their colleagues see that this isn’t worth it.” Lewis Morris, Chief Counsel to the Department of Health and Human Services Office of Inspector General www.mwe.com 5060964.3

34. The Media’s Role inCompliance Enforcement and Reform • Extensive and relentless coverage in national media of all congressional investigations and agency enforcement actions • Media coverage can be both the cause and the effect of government enforcement initiatives • The publicity may not draw clear distinctions between improper and legitimate financial arrangements. • March 3, 2009 New York Times Article • Addresses Harvard medical student concerns regarding industry relationships with Harvard faculty. • Students have raised concerns that faculty relationships with drug companies filter into the content of the lectures in the classroom at the medical school. • Harvard medical students have implemented a policy requiring all professors and lecturers to disclose industry ties in class. www.mwe.com 5060964.3

35. Senator Grassley Response to March 3, 2009 NYT Article • Just one day after the NYT article, Senator Grassley sent a letter to Pfizer requesting information regarding the nature and amount of payments made to 149 Harvard faculty members, such as honorarium or research support. • Senator Grassley noted that he is concerned that • “Pfizer is attempting to intimidate young scholars from professing their independent views on issues that they think are critical to science, medicine, and the health and welfare of American taxpayers.” www.mwe.com 5060964.3

36. Sunshine and TransparencyLegislative Reform Initiatives • The Physician Payments Sunshine Act • First introduced by Sens. Grassley and Kohl in September 2008 • Re-introduced in January 2009, as promised. • Requires manufacturers to disclose payments/value provided to certain healthcare professionals. • .Includes gifts, honoraria, travel, grants, etc. • Quarterly report with name of physician, date and purpose of payment. • Various states have enacted or proposed prescription drug marketing laws. • Massachusetts recently became first state to enact a law specifically requiring medical device manufacturers to report information regarding gifts and other economic benefits given to prescribers and purchasers of medical devices in the state. • Vermont quickly followed Massachusetts lead. • Huge pre-emption issue www.mwe.com 5060964.3

37. Sunshine and Transparency“Self-Reform” • Industry • Eli Lilly is disclosing on its website all grants to educational institutions and nonprofits quarterly • So is: • Pfizer ($500 or more paid to physicians, nurses and nurse practitioners) • Merck • Others with Corporate Integrity Agreements and enforcement settlements • Academia and Institutional Providers are following suit • Stanford • University of Pennsylvania • Cleveland Clinic • UCLA and UCSF • University of Massachusetts • More of both is imminent www.mwe.com 5060964.3

38. Conflicts of Interest in Research and Clinical CareToday’s Liabilities & Risks • May endangerSubjects’ safety and result in private claims for negligence, etc. • Mayjeopardize public’s faithin findings and/or lead them to question whether the Research Team is acting in their own interests. • May reduce thepublic’s willingness to participatein research. • Mayinhibit future discoveriesif less support for research. • May undermine the market for the institution’s other or core lines of business/services. www.mwe.com 5060964.3

39. Conflicts of Interest in Research and Clinical CareToday’s Liabilities & Risks • Loss of federal funding • Sponsor’s inability to obtain FDA approval or exposure to withdrawal of approval • Government investigations of research compliance generally • Suspension of research activities by IRB and/or government agencies • Individuals and institutions debarred from conducting federally-funded and FDA-regulated research • Media Sanction: Loss of reputation and public confidence in research, clinical care www.mwe.com 5060964.3

40. Where do we go and what do we do now????

41. The New Balancing Act Balancing the desire to encourage innovation through Collaboration in research and commercialization With Emerging best practices concerning disclosure, assessment and management of potential conflicts of interest. www.mwe.com 5060964.3

42. Today’s “Bottom Line” • The media, the public and regulators judge “yesterday’s practices” using “today’s standards.” • Good intentions and honesty of purpose are not enough to deflect scrutiny. • The media, public and regulators make judgments in part on appearance. • The IRB process is not enough! • Conflicts in one functional area cannot be addressed in silos; the conflicts compliance infrastructure for all key functional areas must be integrated and coordinated, including the tech transfer/start-ups/venture development function. www.mwe.com 5060964.3

43. Today’s “Bottom Line” • Government perceives almost any legitimate business transaction as corrupt and abusive. • Government continues to use the threat of individual prosecution in every major investigation. • Bad intent can negate good intent and can be contagious. • Make sure every contract passes the “front page of the New York Times” test. • View all communications, especially emails, as non-confidential and non-privileged. www.mwe.com 5060964.3

44. Use Today’s Industry Standards • Current legal and regulatory requirements may not even qualify as the minimum. • Standards exceeding those requirements have emerged from industry and government agency guidelines. • Compliance with the guidelines is not mandatory. • The guidelines are not complete or entire consistent. • Showing best efforts to implement the guidelines as appropriate for the nature and extent of an organization’s operations, risks and resources (financial and personnel) is advisable. • Must develop an approach that will be workable and effective for each entity. • Art not science! www.mwe.com 5060964.3

45. Use Today’s Industry StandardsDefinition of Conflict of Interest • The following definition of conflict of interest articulated in such guidelines should be viewed as the current industry standard, rather than as an industry best practice: • A conflict of interest is an Interest that hasthe potential to compromise or bias the professional judgment or objectivity of the holder of the Interest, or hastheappearance of having the potential to compromise or bias the professional judgment or the objectivity of the holder of the Interest. www.mwe.com 5060964.3

46. Use Today’s Industry Standards: Four Key Components of a Conflicts of Interest Program • 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 www.mwe.com 5060964.3

47. Types of Conflicts of Interest • Individual Conflicts of Interest = An Interest held by an individual, or that individual’s immediate family, that results in a Conflict of Interest. • Institutional Conflicts of Interest = An Interest held by the institution directly or indirectly that results in a Conflict of Interest. • Imputed Institutional Interest = An Interest held by an individual but that is imputed to the organization by virtue of that individual’s authority and decision-making capacity within the organization (these individuals are known as Key Officials). www.mwe.com 5060964.3

48. Key Questions in Understanding Conflicts of Interest • What is an “Interest” and what is a “Conflict of Interest”? • What gives rise to a Conflict of Interest? • What is the difference between Individual and Institutional Interests? • What is the difference between Institutional Interests and Imputed Institutional Interests? • What does the Law say? • How can an organization effectively identify, assess and manage Conflicts of Interest going forward? www.mwe.com 5060964.3

49. Today’s Standards and Emerging Best Practices • Adopt some or all of the AAMC-AAU Recommendations. • Today’s COI programs must go beyond technical legal requirements. • Improved/more rigorous policies and procedures for identifying, assessing and managing COIs. • Address both individual and institutional conflicts of interest. • Apply new rules to all research, not just federally funded research. • Integrate the conflicts policies and disclosure processes for Governing body, senior officers, employees, professional staff, IRB, purchasing and formulary/device review process, fundraising, education, and tech transfer/start-up/venture development function. • Integrate conflicts policies with related policies such as vendor financial relationships, conflicts of commitment. www.mwe.com 5060964.3

50. Today’s Standards and Emerging Best Practices • Establish a Committee dedicated to overseeing COI in research. • Define the relative role of COI Committee, Legal Counsel, Compliance Officer, Other Staff. • Sufficient, independent qualified personnel to assist in the assessment. • Limited role of Professional Staff. • Clear separation of research administration and financial administration (e.g., technology licensing) within the institution. www.mwe.com 5060964.3