When Academics Sit on For-Profit Boards, Questions Arise

The presence of people with academic affiliations on the boards of for-profit healthcare companies is not necessarily illegitimate, but does pose questions about conflict of interest or the appearance of it, researchers say.

Conflict-of-interest regulations have removed drug company pens and note pads from physicians' offices, but they haven't addressed the propriety of academic leaders and researchers serving on the boards of for-profit healthcare companies, a new study suggests.

Researchers from the University of Pittsburgh School of Medicine found that nearly 10% of for-profit healthcare company board positions they examined were held by people with academic affiliations. The findings, which appear in the current issue of The BMJ, found that these board members were compensated an average of $193,000 in 2013, and that many of them also held stock in the companies.

Study co-author Timothy Anderson, MD, chief medical resident in Pitt's Department of Internal Medicine, says the findings show that academic leaders and professors may have relationships with for-profit companies that fall outside the parameters of the Physician Payments Sunshine Act.

"Often when we talk about conflicts of interest in medicine, we are talking about physicians receiving pens and meals from sales representatives," Anderson says. "The stakes are much higher for the board members in our study."

The Pitt researchers analyzed public disclosures of all publicly traded U.S. healthcare companies listed on the NASDAQ exchange and New York Stock Exchange in January 2014 that specialized in pharmaceuticals, biotechnology, medical equipment, and providing healthcare services.

Of the 442 companies with publicly accessible disclosures on boards of directors, 180 (41%) had one or more academically affiliated directors in 2013. These individuals included professors, trustees, CEOs, vice presidents, presidents, provosts, chancellors and deans from 85 non-profit academic research and healthcare institutions. The 279 academically affiliated board members received annual compensation totaling over $54 million and owned more than 59 million shares of company stock.

Questions About Conflict of Interest
Anderson says the presence of academics on for-profit company boards is not necessarily illegitimate, but it does pose legitimate questions about conflict of interest or the appearance of it.

"Our view is not to pass judgment," he says. "We wanted to paint that landscape of how diverse these sorts of relationships are. Some may be quite beneficial and some might be quite concerning, but until we really understand what relationships exist, it is hard for the medical and academic community to have a good discussion about what we should do to minimize the risks and maximize the benefits of these collaborations."

"We do not expect a one-size-fits-all approach would work in managing these relationships, but we risk undermining the public's trust if these conflicts of interest are not addressed openly," he says.

The researchers did not disclose the names of the academically affiliated board members in their analysis. Anderson says the goal is to highlight the issue, not the individuals.

The Sunshine Act requires nearly all payments to physicians and academic medical centers be reported annually by pharmaceutical and medical device companies. The act does not require separate reporting of payments for serving as a company director.

Anderson says the problem could be larger than what his research uncovered.

"The Sunshine Act is limited to looking only at physicians and not people who aren't docs," he says. "It is also only subject to companies that currently sell a product that Medicare pays for. It will cover someone who covers drugs or medical devices but perhaps not a company that is still in development."

Anderson says sitting on a for-profit company board poses particular conflict-of-interest concerns for academics because it can split their loyalties. As academics, they have a primary duty to their patients, their colleagues, their research, and their academic institutions. As paid members of a for-profit board, they have a fiduciary obligation to act in the best interests of shareholders.

"Sometimes those two sets of responsibilities may overlap and sometimes they may not," he says.

"We know if someone is helping run a clinical trial there is some risk, but there is also some benefit from the knowledge gained in a clinical trial. It is a little less clear whether running a company from the board room is something that is going to benefit patients or research."

Anderson and his colleagues hope their study will spark a discussion.

"Some commentators have proposed just not allowing it; telling faculty 'we are comfortable with you participating with the research within the industry or other endeavors, but not leading a company because we feel that would be too great a conflict,'" he says.

"Other commentators recommend limiting how much reimbursement or time their faculty can spend in these roles. We talk about the dollar figures in this paper, but we don't have data for how much money is an influencing amount versus how much is appropriate for reimbursing services. A lot of folks have pointed out that there is not any evidence that this helps or harms individuals or companies, so future research should probably try to determine if there is any benefit or harm to these relationships."