pediatric research: using inquiry to enhance your hospital’s … · 2019. 4. 17. · chief...

©2012 ECG Management Consultants, Inc., and Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients.

Pediatric Research:Using Inquiry to Enhance Your Hospital’s Success

Fifth of a Five-Part Series

November 15, 2012

©2012 ECG Management Consultants, Inc., and Foley & Lardner LLP

Audience Reminders

Submit a question by typing it into the Question and Answer pane at the right of your screen at any time.Respond to audience polls by clicking on the answer of your choice.Provide feedback through our electronic survey following the Webinar.

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Our Speakers

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Patty AdamsSenior ManagerECG Management Consultants, [email protected]

Jim Hendricks, Ph.D.PresidentSeattle Children's Research [email protected]

Dianne McCarthy Chief Counsel for Research AffairsBoston Children's [email protected]

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Pediatric Research: Using Inquiry to Enhance Your Hospital’s SuccessAgenda

Benefits of a Research ProgramCurrent Funding EnvironmentMaximizing Your Research PotentialIssues Related to Start-Up Companies Based on Intellectual Property (IP) Developed in Academic Medical Centers

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I. Benefits of a Research Program

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I. Benefits of a Research ProgramEnhanced Patient Care

Clinical research programs provide unique patient care protocols not available in other settings.Access to high-end equipment used in research may benefit daily patient care.Research programs provide differentiating factors.1

– New cures and treatment therapies.– State-of-the-art technologies.– Specialized surgeries and experimental medical procedures.– Expertise of physicians and surgeons.

1 http://ufandshandsjax.org/patient-care/benefits-academic-health.aspx.

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I. Benefits of a Research ProgramImproved Physician Recruitment and Retention

Improved level of physician job satisfaction.1

Enhanced local, regional, and national reputation.Research programs are assumed to attract the best and the brightest.

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1 David C. Mohr, Ph.D., James F. Burgess, Jr., Ph.D., “Job Characteristics and Job Satisfaction Among Physicians Involved with Research in the Veterans Health Administration,” Academic Medicine, Vol. 86, No. 8, August 2011, pp. 938-945.


I. Benefits of a Research ProgramCommunity Relations

Increases community presence through employment opportunities.Allows IP to be developed locally resulting in new business opportunities. Enhances partnerships through joint hospital and local industry innovation.

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I. Benefits of a Research ProgramAccess to Alternative Revenue Stream

Provides access to government funding for non-patient care activities.Allows philanthropic community members options for contributing to your hospital.Fosters partnerships with health-oriented foundations that provide grants to support patient care or research activities (e.g., American Heart Association, Cystic Fibrosis Foundation).

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II. Current Funding Environment

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Research is typically funded through the following sources:– Government (NIH, NSI) programs.– Industry.– Philanthropy.– Institutional (internal) funds.

Competition for funding sources is on the following spectrum:

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Most Competitive Least Competitive

Government Industry Philanthropy Institutional


$35,745 $36,209

$11,300$11,928

$12,741$13,675

$15,629

$17,821

$20,458

$23,296

$27,067$27,888$28,495$28,461

$29,030$29,312$30,545$31,009

$30,767 $30,702 $30,702

$11,300$11,630$12,087$12,547

$13,900$15,280

$16,977

$18,713

$21,003 $20,863$20,519$19,588$19,249

$18,567$18,797$18,545$17,898$17,472$16,994

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Pres

Budget

Dol

lars

(Mill

ions

)

NIH Appropriation in Current and Constant Dollars

With Supplemental Appropriation (ARRA)

Current $ (Millions)

1995 Constant $ (Millions)

NIH research funding has been flat for 5 years. In 1995 dollars, it has been decreasing.

II. Current Funding EnvironmentNIH Trends

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1

1 Prepared by Federation of American Societies for Experimental Biology.


II. Current Funding EnvironmentIndustry

Industry-sponsored clinical trials typically focus on devices or pharmaceutical therapies.Pharmaceutical trials are more prominent than device trials.Imaging capabilities are often a component of any clinical trial.Industry trials tend to provide lower indirect rates than government-funded research.

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II. Current Funding EnvironmentPhilanthropy

Philanthropy funding presents its own opportunities and challenges:– Provides interaction that may increase community visibility and

encourage additional giving.– Often requires dedicated staff to identify and approach donors.– Presents a good source of flexible funds.– May be instrumental in developing a pool of revenue for internally

awarded research support.Internal funding:– Relies heavily on clinical margin for funding.

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II. Current Funding EnvironmentFoundations and Internal Awards

Disease-focused foundations can assist by:– Offering sums for seed funding prior to a larger research project.– Providing options for network/multisite population-based research.– Identifying potential philanthropic partners.

Internal funding:– Recognizes and rewards specific interests of the hospital and

physicians.– Often relies on clinical margin for funding.

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Effective research programs require a multi-funding approach.– Research funding sources are variable.– It is important to understand your funding options.

Research finance requires long-term planning to ensure the viability of programs.– Flexible funding sources may provide the best initial sources.– Multisite clinical trials offer some structure and opportunities for

new areas of study.Funds can be found for all levels of research.

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III. Maximizing Your Research Potential

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III. Maximizing Your Research PotentialTranslational Research

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BenchLaboratory Discoveries

BedsidePatient-

Centered Research

CommunityPractice

Guidelines


III. Maximizing Your Research PotentialTranslational Research

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BenchLaboratory Discoveries

BedsidePatient-

Centered Research

CommunityPractice

Guidelines

Capital Investment

Seed Investment

ROI Realization Time


III. Maximizing Your Research PotentialTranslational Research (continued)

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FY 2012 Distribution of Expenditures by Business LineSeattle Children’s Research Institute


III. Maximizing Your Research PotentialManaging Recruitment

Minimum of 1.5 R01 ($375,000 MTDC) equivalents in relinquished funding.Standard seed package varies by business line: (1) $1.5 million bench, (2) $1 million clinical, and (3) $750,000 health services/ outcomes.Do not make specific commitments (e.g., “will fund 1 FTE postdoc for 2 years”).Seed funds are allocated at the recruits’discretion.Seed accounts have no expiration date.

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Average Annual Seed Expense: $70,000Average Annual Indirect Revenue: $188,000Average Annual ROI: 1.7


III. Maximizing Your Research PotentialManaging Grantor Mix

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Award Type Average F&A (%)Gifts 0%

External NFP 13.4%

Corporate 32.1%

Federal 55.2%

FY 2012 Awards by Grantor TypeSeattle Children’s Research Institute

NOTE: Figures may not be exact due to rounding.


III. Maximizing Your Research PotentialManaging Administrative Costs

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Continuous Performance Improvement Management System

Focus on customer.Data-driven decisions.Continuous learning using Plan-Do-Check-Act (PDCA) Cycle.Waste (muda) elimination. One-piece flow (FIFO).


III. Maximizing Your Research PotentialManaging Administrative Costs (continued)

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Transaction Completion



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Transaction Pre-AssemblyQuality Check

Main LineFirst-Level Processing

Transaction Complete

Analyst LineSecond-Level

ProcessingIRB Meeting

>30 Minutes

≤30 Minutes

Institutional Review Board

Troubleshooting Andon Light



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Cost Containment Ratio = Net Research Support MTDC

Total Research Infrastructure Cost Less Depreciation and F&A Recovery

FY 2012 Budget: 19.0%FY 2012 Actual: 11.6%


IV. Issues Related to Start-Up Companies Based on IP Developed in Academic Medical Centers

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IV. Issues Related to Start-Up Companies Based on IP Developed in Academic Medical CentersPreface

This is being presented from the perspective of the General Counsel Office of Boston Children’s Hospital (BCH), an academic medical center.BCH is a Harvard teaching hospital that is subject to policies and regulations specific to BCH professional staff and Harvard Medical School (HMS) facultyOther large academic or research institutions likely have similar policies and regulationsThus, many of the points and lessons from this presentation can translate to other professional settings.

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IV. Issues Related to Start-Up Companies Based on IP Developed in Academic Medical CentersIntroduction and Context

As both a clinical and research institution, BCH encourages the discovery, development, and commercialization of new therapies, diagnostics, and devices (inventions) in order to benefit the public.Collaborations and relationships with private companies for the development and commercialization of IP are important. Start-up companies may be the most appropriate and efficient way to commercialize certain IP developed at BCH.Faculty members may also be interested in founding companies to commercialize potentially profitable IP or advising companies that are commercializing the inventions they developed at BCH.However, these relationships create challenging issues, such as managing conflicts of interest (COIs) and commitment, as well asclarifying the ownership of and monetary gain derived from IP developed within BCH.

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IV. Issues Related to Start-Up Companies Based on IP Developed in Academic Medical CentersBCH’s IP Plan

BCH’s IP Policy:BCH owns all IP developed by members of its medical or research staff and

any persons, whether compensated or not, involved in any activities supported by funds, personnel, facilities, materials, or other resources of BCH or administered by BCH (i.e., Covered Persons).Covered Persons may not sign agreements that restrict, commit, or affect IP

in any way that violates BCH’s IP Policy.BCH’s Technology and Innovation Development Office (TIDO) is solely

responsible for the commercialization and distribution of inventions, including any commercialization and distribution decisions made with a third party, such as the federal government or a private sponsor.The proceeds from IP commercialized by BCH are distributed to the

inventor, the inventor’s department and lab, and BCH, according to the IP Policy.

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IV. Issues Related to Start-Up Companies Based on IP Developed in Academic Medical CentersGrocela v. General Hospital Corporation – Massachusetts Superior Court, July 18, 2012

FactsJoseph Grocela, M.D., is a clinical urologist and surgeon at Massachusetts General Hospital

(MGH) and a member of the HMS faculty. Dr. Grocela created several inventions from 2004 to 2008 that arose out his urology practice;

MGH assigned the rights to these invention to Dr. Grocela and was granted royalties and licenses in 2010.Dr. Grocela formed Grindstone Medical LLC in 2009 to develop and market future inventions.In January 2012, Dr. Grocela created a “voice box invention” that was conceived in his basement,

on his own time, and at his own expense but that incorporated knowledge acquired in the course of his professional activities at MGH.MGH’s IP PolicyMGH owns all staff inventions “that arise out of or relate to the clinical, research, educational, or

other activities of the Inventor”; policy compliance is a condition of staff privileges at MGH.

IssueIs the MGH IP Policy, as applied to Dr. Grocela, an unfair and unreasonable restraint on trade

and ordinary competition?

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IV. Issues Related to Start-Up Companies Based on IP Developed in Academic Medical CentersGrocela v. General Hospital Corporation – Massachusetts Superior Court, July 18, 2012 (continued)

Decision (July 2012): Summary Judgment Granted in Favor of MGH

Rights to the “Voice Box Invention” Belong to MGH The voice box invention arose out of Dr. Grocela’s activities at MGH.Per the IP Policy, Dr. Grocela is obligated to assign the rights to the invention to MGH.

The MGH IP Policy Is Reasonable and FairNothing prohibits Dr. Grocela from practicing medicine elsewhere.As a member of the MGH staff, Dr. Grocela reaps the benefit of clinical resources, office

space, access to doctor-patient relationships, and the professional prestige of practicing at a major teaching hospital.In return, Dr. Grocela has agreed to contribute to MGH’s research and educational

objectives.Furthermore, MGH has a legitimate interest in freely sharing staff inventions to further

research and benefit its patients; this outweighs any possible restraint on competition.

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IV. Issues Related to Start-Up Companies Based on IP Developed in Academic Medical CentersBackground on COIs

Relationships with industry are generally positive indicators that faculty members are recognized thought leaders who have professional opportunities, government funding, and support from companies working to translate research to the bedside.Although many benefits flow from partnerships with industry and others, COIs may arise from competing commitments and financial interests that could impact scientific endeavors.Additional attention and action is needed to safeguard the integrity of the institution, the faculty member, and research at the institution.

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IV. Issues Related to Start-Up Companies Based on IP Developed in Academic Medical CentersIdentifying and Managing COIs

A COI arises when a faculty or staff member, or an entity with which a member is associated:– Has an existing or potential financial or other interest that impairs or might reasonably

appear to impair the member’s independence of judgment in the discharge of his/her hospital/university responsibilities.

– May receive, personally, a financial or other benefit from the use or disclosure of university information.

HMS rules on COIs:– Prohibit a faculty member from engaging in research when that faculty member is paid a

certain amount or has more than a certain ownership interest in the entity sponsoring the research.

– Prohibit the holding of an executive position in a for-profit business in which the faculty member has equity.

– Require annual disclosure and updating of permissible conflicts when research is federally funded.

– Require a management plan to address potential COIs and ensure the reliability and integrity of research.

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IV. Issues Related to Start-Up Companies Based on IP Developed in Academic Medical CentersConflicts of Commitment

BCH recognizes that outside consulting or business activities may further the faculty member’s knowledge and perspective and allow the member to make additional contributions to further scientific and clinical advancement and the aims of healthcare.A “conflict of commitment” arises when a faculty or professional staff member undertakes outside activities that interfere with the member’s primary obligations and commitments to BCH or HMS.HMS’ Conflict of Commitment Policy requires faculty members to limit the amount of time they devote to any outside activities so that the activities do not compromise or interfere with the faculty member’s responsibilities to BCH or HMS.BCH’s policies require that all consulting agreements be reviewed by the OGC and contain our standard terms protecting the ownership of BCH’s IP.

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IV. Issues Related to Start-Up Companies Based on IP Developed in Academic Medical CentersResearch COI Committee

BCH’s Research COI Committee advises faculty on COI issues and reviews and approves faculty management plans.Provides a forum for discussion of faculty COI issues.Fosters awareness and the implementation of high ethical standards

across the research enterprise.Reviews matters that present potential COI issues.Approves management plans.Composed of senior faculty members with advice from OGC office.Increasingly advises on faculty start-ups and equity issues.

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IV. Issues Related to Start-Up Companies Based on IP Developed in Academic Medical CentersScenario #1 – Hospital-Encouraged Start-Up

ScenarioFaculty member invents new therapy, diagnostic, or device while working at BCH and using BCH

resources.BCH helps to fund the development of the invention and works with the faculty member to find investors

and establish a for-profit company to eventually commercialize the product.Hospital will eventually license the invention to the outside company, which may pay license royalties to

BCH.

Issues/RecommendationsCompany required to obtain license to the IP developed at BCH before commercializing; BCH may take

equity and receive up-front fee and milestone-based royalties. BCH will (generally) not conduct clinical trial on invention if it holds equity.Faculty member must not maintain executive position in company.Faculty member may serve as founder, provide SAB services, and wish to take equity. If faculty member

takes equity, that member may not conduct or supervise clinical trials on invention.COI management plan required to ensure that any clinical or basic research performed at BCH is not

compromised by existence of outside company and equity held by faculty member.

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IV. Issues Related to Start-Up Companies Based on IP Developed in Academic Medical CentersScenario #2 – Faculty Forms Start-Up Independently

ScenarioFaculty member devises new invention based on work done at BCH and

using BCH resources.Faculty member independently finds investors and forms own start-up

company without BCH involvement or authorization to develop and commercialize the invention.After company is formed, faculty member approaches BCH for a license to

the IP, or company tries to use IP without a license from BCH.

IssuesThe invention belongs to BCH, and neither the faculty member nor the

company have any rights to the IP.Such a scheme violates BCH’s IP Policy and undermines the relationship

between BCH and its faculty.

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IV. Issues Related to Start-Up Companies Based on IP Developed in Academic Medical CentersScenario #3 – Commercializing Open Source Information

ScenarioFaculty member develops software for new clinical application.Faculty member and BCH agree to distribute the software as open source to the

community at large.But faculty member then forms own start-up company to sell services related to the

open source material.

IssuesThe software is owned by BCH and distributed via open source, but faculty member

finds way to commercialize invention through a service company based on the IP.Does this contradict decision to open source?Is new company based on BCH IP, and does it therefore owe BCH royalties or

payments? This undermines relationship between faculty member and institution.

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IV. Issues Related to Start-Up Companies Based on IP Developed in Academic Medical CentersKey Points

Relationships with outside and faculty start-up companies can be extremely valuable to the academic institution, the faculty member, and the public beneficiaries of medical inventions.However, the potential for harmful COIs and conflicts of commitment is high.The rights to and ownership of IP resides with the institution.COI issues must be addressed and managed prior to forming any corporation based on institutional IP.Proper monitoring, planning, and explicit IP agreements are the keys to successful compliance and benefit for all parties involved.

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Questions and Answers

To submit a question for any of our presenters, type it into the Question and Answer pane at the right of your screen at any time.

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Patty AdamsSenior ManagerECG Management Consultants, [email protected]

Jim Hendricks, Ph.D.PresidentSeattle Children's Research [email protected]

Dianne McCarthy Chief Counsel for Research AffairsBoston Children's [email protected]


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Future Programs

We are beginning to formulate the content for our 2013 sessions and we hope you will join us for future Web conference programs in the New Year.

We will communicate these opportunities as soon as details are finalized.

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pediatric research: using inquiry to enhance your hospital’s … · 2019. 4. 17. · chief...

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