Duke Is Wake-up Call for Research Compliance

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By Jeannie Baumann

Research institutions can avoid tighter federal reins on grants with better oversight and a culture of compliance, experts said in light of recent penalties administered to a top university.

The National Institutes of Health hit Duke University, one of the nation’s top grant recipients, with tougher requirements for managing research grants, following two high-profile cases of research misconduct over the past several years, including a pending whistleblower case. The NIH now requires Duke investigators to obtain prior approval for any changes to new and existing grants, including extensions and financial adjustments, Duke University spokesman Michael Schoenfeld confirmed to Bloomberg Law.

The restrictions imposed by the NIH indicate the agency has concerns about how the university is handling hundreds of millions of dollars—a situation in which other institutions could find themselves if they don’t tighten their management of research awards.

“In general, the NIH looks to the grantee institutions to stand in its shoes as the custodians of the public funds that are awarded,” Kate Gallin Heffernan, an attorney in Verrill Dana LLP’s Boston office whose practice includes research compliance and misconduct, told Bloomberg Law in an April 2 email.

Those requirements are usually laid out in an institution’s standard operating procedures and in the NIH Grants Policy Statement. While Heffernan doesn’t have insight on the specific situation with Duke, this requirement indicates the NIH’s concerns rise to the institutional level. “These types of extra protections that the NIH is requiring of all applications for funding by this institution suggests that the NIH has become concerned about the systems the institution has in place and so is supplementing its existing requirements.”

At stake is billions of dollars in public money. The NIH describes itself as “the steward of medical and behavioral research for the Nation.” About 83 percent of its $37.1 billion annual appropriation funds extramural research through grant awards to institutions like Duke to carry out biomedical research. Duke ranks ninth out of more than 500 higher education institutions in top NIH grant recipients, according to a funding database maintained by the agency. In fiscal year 2017, Duke received 823 awards worth more than $440 million, up from 778 awards worth more than $416 million the year before that.

“NIH may take one or more enforcement actions when a grant recipient fails to materially comply with the terms and conditions of grant award, depending on the severity and duration of the noncompliance,” the NIH Office of Extramural Research said in an April 3 statement to Bloomberg Law. The agency referred to Section 8.5 of its grants policy statement, about actions the NIH may take when it decides closer monitoring or corrective actions are required, such withholding future awards.

Duke is in the middle of a whistleblower case involving alleged research misconduct that could put it on the hook for $600 million as well as civil penalties for each false claim. Joseph M. Thomas, a former employee of Duke’s pulmonary division, filed a complaint alleging his former boss, Erin N. Potts-Kant, her supervisor, and the university, falsified research data. The case is in the discovery phase in preparation for a possible trial, according to filings tracked by Bloomberg Law.

The case involves more than 60 research grants totaling $200 million in funding from the NIH and the Environmental Protection Agency. Thomas asked that Duke reimburse the U.S. government triple the amount of damages plus civil penalties for each false claim.

Separately, the Health and Human Services Office of Research Integrity (ORI) concluded former Duke cancer researcher Anil Potti committed research misconduct, which the federal government defines as falsification or fabrication of data, or plagiarism.

Potential Trend?

In addition to the Duke situation, Partners Healthcare in Boston settled a similar research misconduct case with the Department of Justice last year, Marti Arvin noted. Arvin, who has more than three decades of experience in research compliance at academic medical centers, said there have been a fair number of cases in which the ORI has gone after the individual principal investigator. But now there are at least a few cases that name the institution as well.

“It’ll be interesting to see how this trends,” said Arvin, who is the vice president of audit strategy for CynergisTek, a health-care IT consulting firm based in Mission Viejo, Calif. “Perhaps that trend is going to increase.”

Previously, a Duke grant valued at $250,000 or less didn’t require advance approval from the NIH if the researcher wanted to make changes in the allocations among categories or deadlines; now they do, Schoenfeld said. The NIH said it’s part of a modular research grant application format, in which grant applicants request funding in modules of $25,000 to $250,000 for each budget year, and all other grant applications require detailed budgets in various forms.

Tips for Other Institutions

When asked how other institutions can avoid having restrictions placed on their grants, the NIH Office of Extramural Research said it expects them to have systems, policies, and procedures in place for managing grant funds. They also must establish effective internal control systems that provide for appropriate monitoring and “reasonable assurance” the institution is complying with federal rules as well as the grant’s terms and conditions.

The NIH said actions to achieve an organizational culture that is committed to compliance should include:

  •  a clear delineation of the roles and responsibilities of the organization’s staff, both programmatic and administrative;
  •   written policies and procedures, training, management controls, and other internal controls;
  •   performance assessment, administrative simplifications, and information sharing; and
  •  communication between research administrators and grants management officers at the NIH.
Duke already has addressed many of the concerns that prompted this change through enhanced internal controls, education and training, and new information systems, Schoenfeld said. The university will continue to look for opportunities to improve oversight, and the new NIH guidelines won’t affect funding for current research grants.

“Duke is committed to upholding the highest standards of integrity in all our work and will of course adhere to the new guidelines,” Schoenfeld said in an April 2 email.

Institutions need to have sufficient internal infrastructure both to prevent any grant mismanagement and then to be able to address it when it occurs. “This is easier said than done, of course, and necessarily requires a commitment of resources and funding to research integrity efforts that not all institutions may have readily available,” Heffernan said. That includes robust research ethics education and requires a strong research integrity officer with institutional backing and the resources and staff “to manage the case-load of allegations of misconduct that may exist at larger institutions.”

Arvin said research compliance oversight tends to be siloed and decentralized at many organizations. It might be helpful for all institutions to reevaluate how they’re managing compliance to assure the right controls are in place at the grant submission level, the grant renewal level, any requests for additional funding, and how to determine what to do with any leftover funds.

“Compliance is defined by the culture of the organization, “Arvin said. “If you don’t have someone at the top who can really look at the whole broad picture and fully understand what’s happening in each component of it, I think it lends itself to having noncompliance and oftentimes unintentional noncompliance.”

To contact the reporter on this story: Jeannie Baumann in Washington at jbaumann@bloomberglaw.com

To contact the editor responsible for this story: Randy Kubetin at rkubetin@bloomberglaw.com

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