Life Science Compliance Update

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December 03, 2012

Institute of Medicine: Harmonizing Reporting on Potential Conflicts of Interest: A Common Disclosure Process for Health Care and Life Sciences

Doctor on Computer

Almost everyone in the healthcare industry unequivocally recognizes that “patients and the public benefit when physicians and researchers collaborate with pharmaceutical, medical device, and biotechnology companies to develop products that benefit individual and public health.”  However, a growing number of groups and individuals have continued a crusade in making such collaborations or physician-industry relationships more "transparent" due to their concern of the potential for bias or “conflicts of interest.” 

These conflict of interest crusaders argue that relationships with industry may unduly influence professional judgments involving the primary interests and goals of medicine.  As a result, groups like the Institute of Medicine (IOM) have recommended approaches to managing conflicts of interest (COIs), particularly financial relationships, without deterring fruitful scientific collaboration among academics, health care professionals, and industry. 

Managing potential conflicts of interest has been a growing topic over the last several years.  Increasing, physicians and other healthcare providers, are routinely required to provide financial information to a variety of organizations with stewardship responsibilities—academic institutions, funders, journals, continuing medical education (CME) groups, and more.  In addition, physicians must comply with disclosure obligations and regulations through the National Institutes of Health (NIH) and the Food

and Drug Administration (FDA).  Moreover, disclosure of physician-industry relationships is now federal law, as data will be gathered and reported under the Physician Payment Sunshine Act.  

In 2009, the IOM recognized in a report entitled Conflict of Interest in Medical Research, Education, and Practice, the tremendous burden these reporting obligations were placing on health care professionals and biomedical researchers by repetitive, overlapping but non-identical, time-consuming procedures and forms required by different organizations for reporting relationships for evaluation of possible COIs. 

For example, the Federal Demonstration Partnership, a group dedicated to reducing the administrative burdens associated with research grants and contracts, estimates that “42% of an American scientist’s time is spent on administrative tasks.  Much of that burden comes from redundant reporting and assurance requirements that vary.”  “Considering this waste, and anticipating the growing requirements for disclosure by reporting individuals, the need for a harmonized system becomes urgent and compelling,” IOM recently wrote in a new paper entitled “Harmonizing Reporting on Potential Conflicts of Interest: A Common Disclosure Process for Health Care and Life Sciences.”   

IOM explained that while accurate reporting can identify circumstances, in which there exists the possibility of inappropriate influence over patient care, education, or research, requirements are increasing for individual clinicians and researchers to report their relationships.  As a result, the IOM recognized that “The current process of disclosure is fragmented and burdensome for clinicians, researchers, students, trainees, and others who are required to report relationships (reporting individuals).”   

The report was developed by individual participants in a joint activity of the IOM’s Board on Health Sciences Policy and the Best Practices Innovation Collaborative of the IOM Roundtable on Value & Science-Driven Health Care.  Unfortunately, however, the committee that developed this working paper consisted of many individuals who have dedicated their careers to writing and researching about potential conflicts of interest from an anti-industry perspective.  Moreover, the committee did not consist of representatives from industry, clinical trialists, commercial CME providers, or clinical research organizations.  

What is also problematic about this report are some of the definitions IOM uses.  For example, IOM defines “faculty or speaker fee” to include compensation for “continuing education.”  As we have written numerous times over the past year in reference to comments submitted by the CME industry regarding the Sunshine Act, payments from accredited CME providers, in which commercial support is provided, must not be attributed to physicians who serve as faculty members or physicians who attend the CME program.  Such reporting would be contrary to the Accreditation Council for Continuing Medical Education’s (ACCME) Standards for Commercial Support.  IOM’s definition of “honoraria” is also problematic for the same reason.   

In addition, IOM uses a broad definition of “manuscript fee” and “review activity fee,” which may present challenges to physicians or researchers who contribute to the content of CME programs.   

Although the final Sunshine regulations have not been published yet, IOM should clarify that its definitions for (1) faculty or speaker fee; (2) honoraria; (3) manuscript fee; and (4) review activity fee are not applicable to payments made by accredited CME providers, and should exempt such payments from their uniform disclosure system and template.  To the extent that CMS includes accredited CME payments, IOM must work closely with the ACCME to ensure that such reporting is not contrary to ACCME’s standards. 

The proposal is also problematic in that it came out before the final Sunshine Act regulations; thus, only more work, time, money and resources will be spent on this, and companies will still have overlapping responsibilities under this system.  It makes more sense for the Sunshine Act to be implemented for several years, and for IOM to revisit this issue after CMS has worked with the data it collects, and IOM serve as an independent review of how to improve the reporting process.  

An editorial published in the Journal of the American Medical Association (JAMA), noted that while a “single uniform disclosure form is impractical, given that agencies such as NIH and FDA and many state governments have varying disclosure requirements determined by rules that cannot be easily modified …  “Substantial improvements can be made in the disclosure system by creating a centralized data repository that is governed in a manner that ensures data security while reducing the burden of disclosure for individuals and meeting the needs of all stakeholders.” 


The Field Definitions Working Group was tasked with identifying a set of common elements to accommodate most current and anticipated requirements for disclosure of relationships for evaluation of possible COI.  The group reviewed 23 sample disclosure forms made available by participants from across health care sectors (federal agencies, academic institutions, journals, CME providers, and professional organizations).  The survey of current requirements revealed substantial differences, including varied directions to reporting individuals, incompletely aligned data elements, differences in response format (e.g., open-ended vs. closed questions), and a range of requirements for inclusion of family members’ relationships with industry.   

Harmonization of definitions and requirements, to the extent possible under current regulations and policies, “will simplify data collection, storage, maintenance, and retrieval.”  Harmonization may also improve the accuracy of data and reduce the need for clarification and revision.  To this end, IOM suggested common elements intended to meet the needs of many organizations’ current policies on COI.  

Relationships to Be Reported  

The 2009 IOM report defined COI broadly as “circumstances that create a risk that professional judgments or actions regarding a primary interest will be unduly influenced by a secondary interest.”  Primary interests are those related to conducting research, taking care of patients, and providing medical education.  Secondary interests are those that relate to an individual’s gain—e.g., financial, professional, political, or interpersonal.  

The committee recognized that although other relationships might compromise objectivity, financial relationships may be the easiest to measure and track. As a result, IOM proposed that to meet many current regulatory and organizational requirements, a harmonized system should instruct reporting individuals to disclose relationships, activities, or interactions that may influence—or that give the appearance of potentially influencing—professional judgments or actions. 

Although manufacturers will be required to report these extended relationships to CMS, reporting individuals also will need to track these relationships to ensure accuracy.  To meet the requirements of all organizations requesting disclosure statements from reporting individuals (requesting organizations), a harmonized system will need to accommodate reporting for as many different family members as are currently required by organizations.  

IOM noted that current requirements for inclusion of extended family members’ data creates a significant and likely unnecessary burden, on reporting individuals and does not necessarily fulfill the intent of limiting COI.  As a result, IOM suggested the following general principles to guide decisions on when, and at what level, to require reporting of family members’ relationships.  

First, IOM suggested that reporting individuals should disclose others’ financial relationships if there exists the possibility that the financial relationship will benefit the reporting individual, including if the reporting individual has benefitted in the past. Second, to help ease the burden of disclosure, IOM also recommended that requesting organizations consider whether the individual reporters can verify the accuracy of others’ relationships—for example, by requiring only those that are a matter of public record. 

One way to accomplish these two goals would be simply to require disclosure of relationships of the reporting individual’s spouse or domestic partner and dependent children, with expanded disclosure of family financial relationships that may influence professional judgment, and with accommodation for unusual cases, such as with special government employees (SGEs) who advise FDA and are required under federal law (18 U.S.C. 208) to report certain financial interests of individuals and institutions, whose interests are imputed to them regardless of the magnitude of the interest. 

Based on IOM’s survey of requirements and disclosure forms, they proposed the following general features for a harmonized set of data elements:  

  • Data elements should be non-duplicative and discrete (non-overlapping).
  • Fields should allow the option other, with specification of further details.
  • Data elements should be easily and immediately updatable.
  • Data elements requested of individuals should be only those that are applicable.  

Definitions of common data elements are listed below and referenced to categories contained in the Sunshine Act.  The definitions include the overarching categories and data elements common to many requesting organizations and does not attempt to harmonize the determination of when a relationship is significant or constitutes a significant COI.  It is important to note that many requesting organizations will require reporting for only a subset of the fields listed.  Accordingly, IOM reported that individuals will need to fill out only those data fields relevant to their personal roles and relationships.  

IOM listed several other parameters to govern the data fields within the harmonized system.  First, data elements should be reported separately for each relationship. Second, in conjunction with the anticipated Sunshine Act rules, when a relationship involves a covered drug, device, or biological or medical supply, the name of that product should be recorded.  Third, the value of each applicable data element should be recorded.  With the variation in standards among organizations regarding monetary thresholds, IOM proposed that a harmonized reporting system prompt reporting individuals to disclose monetary value with sufficient granularity to allow interpretation in accordance with organizational policies.   

Fourth, to accommodate requests for disclosure over various time frames, each relationship should include a start date and an end date, and archived elements should be easily available.  Finally, in the case that a requesting organization is obliged, legally or otherwise, to obtain information in a more detailed or otherwise uniquely categorized manner than is used by the majority of requesting organizations, the harmonized system will accommodate presentation of additional data fields for completion by reporting individuals. 

Framing Principles  

To frame exploration of the options, the working group developed the following core principles for data storage and access.  

1)    Data in the harmonized system are owned by the reporting individual, who fully controls access to and distribution of those data at the time of entry and indefinitely into the future.  Note: Once data are reported by individuals to organizations, those re-ported data are subject to the privacy/confidentiality policies of the organization.

2)    Security of deposited data is paramount.

3)    The data storage mechanism should allow the reporting individual to access, update, and save data at any time.

4)    The data repository or system should include a function to indicate when data are up-dated and allow for “reminder” prompts for updates.

5)    Reporting individuals should be able to input data in multiple ways: via a Web-based portal, computer programs, apps, etc.

6)    The harmonized system should be designed to work with other existing systems, and those not yet developed, to “cross-populate” data among databases, when authorized by individual reporters.

7)    Requesting organizations should be able to obtain data elements as authorized by reporting individuals.  

Data Entry  

IOM recommended that individual reporters be presented only with data elements applicable to them, rather than every possible field of entry. To tailor the elements to the reporting individual, data entry should begin with a “mapping” process in which a set of questions determines exactly which data elements the reporting individual needs to provide to comply fully with the re-quirements of each organization.  The mapping process should include at least two steps: 

1)    Identification of positions or roles held by the reporting individual at a particular organization for which reporting is required (e.g., appointment at Duke University, author for the New England Journal of Medicine, board member of the American Society of Clinical Oncology), and

2)    Determination of whether relationships exist that must be disclosed, per the requirements of those organizations.

The system should allow for updating positions and relationships at any time to accommodate, for example, annual reporting as required by many institutions, as well as periodic reporting such as at the time of publication.  The process described will both maximize the efficiency of data entry and help prevent inadvertent omissions.  If a reporting individual has no relation-ships that may constitute a COI under the requirements of his or her positions, the number of data elements to be filled out should be minimal.

Data Retrieval

After data are entered into the system, two approaches are possible for providing the data to requesting organizations: a “push” or a “pull” mechanism.  With a “push” mechanism, the reporting individual initiates a data transfer to a requesting organization.  The “pull” mechanism allows requesting organizations to query the data repository to retrieve a predefined and preapproved dataset.  With appropriate permission structures, the end result of either mechanism is the same—data are shared with requesting organizations with the express permission of the reporting individual.  Since data security is of paramount importance, IOM believes that the optimal system is one in which the individual reporter “pushes” his or her data to requesting institutions.  IOM then proposed the following structure and support for the system:

1. Data repository: centralized.  A centralized database holds the greatest potential for efficiency and cost savings.  Many organizations currently invest in the maintenance of complex data and human systems which require expensive upkeep.  While a harmonized system will not eliminate the need for organizations to maintain a database to receive and filter information from the harmonized system, IOM anticipates that the remaining intra-organizational database will be significantly smaller and less resource-intensive to maintain.  The “push” will be the default position for data sharing from the repository, with “pull” permission granted selectively and specifically by a reporting individual to certain institutions, if satisfaction of security safeguards can be assured.  

2. Business model: not-for-profit.  To streamline discussions of financial considerations in these early stages, IOM suggests that the harmonized system be established as a not-for-profit model at the outset.  

3. Revenue generation: subscription or membership.  Anticipating that the activity will offset to some extent organizations’ current costs, IOM proposes a subscription or membership model—tiered based on size, utilization patterns, or other parameters of participating individuals and organizations—for revenue generation.  

4. Housing structures: operations and governance.  Housing the operations within an existing organization may maximize resources; however, collective establishment of a new organization is a viable alternative if institutions with experience and resources in managing similar data systems are willing to contribute these to the new organization.  

IOM said it will establish a steering group comprised of equal representation from requesting and reporting organizations, as well as those with technical expertise necessary for carrying out design and implementation of the harmonized system.  Key tasks of the steering group will include evaluating existing organization, support, and governance options, establishing a secretariat, and moving forward with implementation.  IOM has agreed to organize and host the initial gatherings of the steering group. 


The IOM reported included a proposed Table of Data Elements for the Harmonized System and Sunshine Act Reporting.  The table uses specific terms, and as a result, the IOM group provided several definitions, which are drawn from documents developed by the NIH, FDA, CMS, ICMJE, various universities, and English-language dictionaries.   Below is a list of some of the relevant terms:

  • Award: A prize or other symbol of recognition given for an achievement or based on merit.
  • Consulting fee: Payment received for the provision of personal services, not as an employee, that require advanced knowledge and expertise in a field of science or learning, including the rendering of advice or consultation.  Includes fees for services provided as a member of a scientific advisory board, an agent of a company (e.g., someone who receives a commission or finder’s fee).
  • Expert witness fee: Payment for serving as an individual qualified to speak authoritatively by virtue of his or her special education, training, knowledge, skill, or experience/familiarity, or payment for providing expert advice related to a scientific, technical, or professional matter. Expert witness services include providing a written report, appearing for a deposition, or otherwise providing information, including testifying under oath.
  • Faculty or speaker fee: Compensation for speaking to others to impart knowledge or skills in health care and life sciences, including, for example, continuing education, board review, seminars, lectures, teaching engagements, speakers bureau or other fees. [Note: the Sunshine Act proposes to define “direct compensation for serving as faculty or as a speaker for a medical education program” as “all instances in which applicable manufacturers pay physicians to serve as speakers, and not just those situations involving ‘medical education programs.’” As noted, comments were invited in this area and clarification is expected in the final rule. Of note, the proposed rule does not provide guidance about where other faculty fees (such as curriculum development or online courses) should be recorded.]
  • Gifts: A transfer of tangible or intangible value for which the recipient does not provide equal or greater consideration in return. [Note: Final definitions should follow those in the Sunshine Act final rule (e.g., food gifts).]
  • Grant: A financial transfer of money, property, or both to an entity to carry out an approved project or activity.
  • Honoraria: Payments to a professional person for services for which fees are not legally or traditionally required (e.g, an appearance, speech, article). [Note: the Sunshine Act proposed rule requests comments on the distinction between honoraria and direct com-pensation for serving as a CME faculty or speaker. The definition of these two items should correspond to the final rule.]
  • Manuscript fee: Compensation received for authorship, editing, reviewing, or other ser-vices associated with preparing of materials for publication.
  • Review activity fee: Compensation received for professional review of scientific activities, including participation on a data-monitoring board, statistical analysis, etc.  

The table presents the broad categories of data elements expected to be included in the harmonized system.  The table attempts to make clear the intended one-to-one correspondence with anticipated categories required by the Sunshine Act.  The table will be updated upon enactment of the final rule by CMS and updated periodically as indicated by future legislation and rule making.  IOM noted that the harmonized reporting system must be able to identify and highlight those relationships among reporting individuals and manufacturers that are applicable.  The Sunshine Act applies only to a subset of manufacturers and products. 

IOM also said that “it will be incumbent upon the operators of the harmonized system of disclosure to maintain the capacity within the system to identify and flag relationships and covered drugs, devices, biologicals, or medical supplies that fall under CMS regulation and may be subject to review and appeal.” 

Date of payment.  If an arrangement involves payment over time, the manufacturer will elect whether to report a single line-item payment on the first day of payment or report each payment separately.  IOM recommended that manufacturers relay their accounting plan to reporting individuals.  Alternatively, the reporting individual should record each payment separately and the harmonized system should have the capacity to filter and aggregate these payments.  


If this central system were ever implemented it would create a bonanza for trial attorneys and media to discredit doctors who have no idea of the “value” of non cash items that will be reported in the physician payment sunshine act but they might  not report in to this big brother database.     The concept of a uniform form is one thing but a central database tracking doctors every move is quite something else. 

These recommendations coupled with the Physician Payment Sunshine Act encompass the prospect of the greatest invasion of personal privacy on doctors in the history of our nation.     

Fortunately, this report has a much chance of being implemented as any of our readers winning the Powerball lottery.  I like those odds.

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