Duke University Must Return $112.5 Million in NIH Grant Money

From Pharma & Life Sciences News on Bloomberg Law

March 25, 2019

By Jeannie Baumann

Duke University will pay $112.5 million to settle claims that biomedical researchers at the school manipulated research data to apply for federal grants, an attorney for the whistleblower in the case said March 25.

The latest settlement puts to bed one of two research scandals involving the Durham, N.C., campus over the past decade, prompting the National Institutes of Health to impose additional oversight over Duke’s management of its research awards.

False Claims Act violations are a major compliance danger zone for universities in general, but it’s rare that these cases involve tampering with scientific data. FCA allegations involving universities usually arise over improper billing to the federal government for salaries or other administrative matters.

“This case was, simply put, one of the largest scientific fraud cases in history. The impact on the published scientific record, federal grant funding, and on individual researchers was unprecedented,” the whistleblower’s attorney, John R. Thomas Jr., said. Thomas, a partner with Healy Hafemann Magee, is the brother of whistleblower Joseph M. Thomas.

Joseph M. Thomas sued Duke in 2013 alleging his former colleague, Erin N. Potts-Kant, her supervisor, William Michael Foster, and the university falsified data in applying for research grants. They received more than 60 research grants, totaling $200 million in funding, from the National Institutes of Health and the Environmental Protection Agency. Potts-Kant was fired two months before the complaint was filed, and Foster has since retired.

Duke University President Vincent E. Price vowed to improve the school’s grant processes, including by establishing a panel on research integrity.

In fiscal 2018, Duke received 844 research grant awards totaling $475 million in NIH funding, making it the eighth highest grant recipient in the U.S.

“The fact that fraud of this magnitude could occur at an institution as well-regarded as Duke University illustrates the work that remains to be done on behalf of research integrity across the country,” John Thomas said. “It is incumbent upon research institutions to ensure they are being faithful stewards of taxpayer dollars, and it is equally incumbent upon researchers to police their own and report fraud when they see it.”

This case demonstrates that individuals who learn of fraud against the U.S. government can make a difference through the qui tam provisions of the False Claims Act, Thomas said. Joseph Thomas is in line to receive 30 percent of the settlement.

Duke Response

Price said he expects Duke researchers to always adhere to the highest standards of integrity.

“Virtually all of them do that with great dedication,” Price said in a March 25 statement. “When individuals fail to uphold those standards, and those who are aware of possible wrongdoing fail to report it, as happened in this case, we must accept responsibility, acknowledge that our processes for identifying and preventing misconduct did not work, and take steps to improve.”

In the earlier case, the Health and Human Services Office of Research Integrity concluded former Duke cancer researcher Anil Potti committed research misconduct, which the federal government defines as falsification or fabrication of data, or plagiarism. Most cases of misconduct go through the ORI administrative process, which can result in a researcher either being barred from entering into any federal contracts or requiring tight supervision. But the ORI must promptly refer any criminal or civil fraud allegations to the Justice Department, the HHS Office of Inspector General, or another appropriate investigative body.

An unrelated case that also prompted a large settlement involved Partners HealthCare Sytem in Boston. It had to pay $10 million in 2017 to resolve allegations that three scientists in a stem cell laboratory knew or should have known that the lab promulgated and relied upon manipulated and falsified information to obtain NIH grant funding.

Additional Steps by Duke


In addition to paying up, the university is implementing additional steps to improve management of its research integrity and quality, Price said. It’s forming a new advisory panel on research integrity, to be headed by Ann M. Arving, former vice provost and dean of research at Stanford University. The advisory panel will also contain other outside voices, including former university research executives from Caltech and Rockefeller universities.

Duke is also changing its leadership structure in research to “provide clear and consistent policy guidance, oversight and accountability for all research at Duke University and Duke Health,” Price said. It will form an executive oversight committee to oversee the ongoing implementation of Duke’s research excellence initiative, he said.

The case is United States ex rel. Thomas v. Duke Univ., M.D.N.C., 1:17-cv-00276-CCE-JLW.


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