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Conflict of interest and informed consent in industry‐sponsored clinical trials a

David S. Shimm M.D. & Roy G. Spece Jr. J.D.



Associate Professor of Radiation Oncology and Clinical Assistant Professor of Internal Medicine , University of Arizona College of Medicine , 1501 North Campbell Avenue, Tucson, AZ, 85724 b

Professor, University of Arizona College of Law , Published online: 23 Jul 2009.

To cite this article: David S. Shimm M.D. & Roy G. Spece Jr. J.D. (1991) Conflict of interest and informed consent in industry‐sponsored clinical trials, Journal of Legal Medicine, 12:4, 477-513, DOI: 10.1080/01947649109510865 To link to this article:

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The Journal of Legal Medicine, 12:477-513 Copyright © 1991 by Hemisphere Publishing Corporation


INTRODUCTION Clinical trials of new drugs, biologies, and medical devices are a necessary and vital aspect of modern medical practice. Although experimentation using computer simulations, tissue culture, whole organ preparations, and intact animals can yield valuable information, it is only through human experimentation that the toxicity and efficacy of new therapeutic maneuvers can be evaluated before allowing them to be used in unrestricted general medical practice. Before a new drug can be released for general use in the United States, it must be approved by the Food and Drug Administration, which requires a rigid sequence of evaluation prior to ap-

* Associate Professor of Radiation Oncology and Clinical Assistant Professor of Internal Medicine, University of Arizona College of Medicine. Address correspondence to Dr. Shimm at the Department of Radiation Oncology, University of Arizona College of Medicine, 1501 North Campbell Avenue, Tucson, AZ 85724. This article was stimulated by discussions in which we participated during our service on the University of Arizona Institutional Review Board. We are indebted to our colleagues on the Board, in particular to its former Chairman, Dr. Milan V. Novak. We would also like to express our appreciation to Dr. J. Robert Cassady, Dr. Gerald L. Logue, Prof, Michael H. Shapiro, Prof. Melvin G. Shimm, and Ms. Janice R. Steele for critically reading the manuscript; to Mr. Conrad Kresge, Mr. Robert Ryan, Ms. Gabrielle Shinohara, Mr. Jeffrey Stern, Ms. Elisabeth Strapac, and Mr. William Wilkinson for assistance in assembling data and references; and to Ron Roizen for encouragement and helpful discussion. This article was supported in part by an American Cancer Society Clinical Oncology Career Development Award and a generous gift from the Dick Thurman Memorial to Dr. Shimm, a Law College Association Grant to Professor Spece, and by DHHS/NIH Cancer Center Core Grant CA23074. † Professor, University of Arizona College of Law.


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proval.1 Only after a new drug or device has been proven to be safe and effective via such testing will the Food and Drug Administration allow it to be marketed. Such testing involves a significant commitment of effort and requires many patients. For this reason, drug manufacturers generally enlist the assistance of physicians in academic medical centers to conduct these studies. This article focuses on the ethical issues raised when clinical investigators enter patients into drug company-sponsored clinical trials in exchange for reimbursement. There are two major ethical issues—first, informed consent, in that experimental subjects are rarely, if ever, informed that their physician stands to receive a substantial payment from the drug company for entering a patient into a study, and, second, a potential conflict of interest, because the payment from the drug company can tempt the physician to recommend the company-sponsored experimental protocol over a standard mode of therapy, or no treatment. These issues have clinical relevance if, in fact, patients are being guided away from the best medical alternatives for them because of conflict of interest and lack of informed consent. Some of the historical aspects of human experimentation are explored with emphasis on the dynamics of privately funded human subjects research. Published commentary addressing similar issues is reviewed, and the relevant case law and statutory law are described. Proposed solutions are evaluated and recommendations offered.

I. ISSUES IN HUMAN EXPERIMENTATION Review of clinical research by Institutional Review Boards (IRBs) is now routine, but it is instructive to review some of their historical antecedents. Although courts had addressed the rights of research subjects previ-


Clinical testing required before a drug can be marketed is comprised of three phases. Phase I includes clinical pharmacology and toxicity testing, where patients are given escalating drug doses to determine the maximum tolerated dose, the optimum drug administration schedule, and the metabolic disposition of the drug. In Phase II testing, the maximum tolerated dose of the drug (as determined in Phase I testing) is given to patients with a variety of diagnoses for which it might possibly be useful, to determine the disorders for which the drug appears to be appropriate. In Phase III testing, patients with a disorder identified in Phase II testing are randomly assigned to treatment with the new drug versus placebo or best standard treatment to determine the actual efficacy of the new drug. The steps for a new device are analogous, with Phase I studies to determine safety, Phase II studies to identify situations where the device might be helpful, and Phase III randomized studies where the device is compared to the best standard treatment in promising situations identified by Phase II testing. Carter, Clinical Trials in Cancer Chemotherapy, 40 CANCER 544 (1977).

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ously, interest in the ethics of human experimentation became much more acute with the revelation during the Nuremburg Trials of the experiments carried out on human beings by Nazi physicians, and, in fact, a code of ethics for conducting medical research was outlined as part of the 1948 judgment in that case.2 Abuse of human subjects was not a monopoly of Nazi physicians. Instances of abuse also have come to light in the United States. In 1963, two physicians conducting an early study of cancer immunotherapy funded by the United States Public Health Service and by the American Cancer Society at the Jewish Chronic Disease Hospital in Brooklyn, New York, injected viable cancer cells into 22 elderly, debilitated patients without informing the subjects of the nature of the experiment.3 Similarly, in the early 1950s and extending into the 1970s, investigators at the Willowbrook State Hospital in Staten Island, New York, injected live hepatitis virus into retarded children living at the facility without obtaining proper consent. The study was justified on the basis that most residents contracted the disease shortly after entering the facility, even though the benefit of gamma globulin in the treatment of hepatitis already had been demonstrated.4 In the Tuskeegee syphilis study, started in 1932 and conducted for 40 years thereafter by the United States Public Health Service, hundreds of syphilis-infected men in Macon County, Alabama, were observed, but not treated, to determine the natural history of the disease, even after penicillin had been shown to be an effective treatment for the disease.5 Beecher has documented a number of other questionably ethical studies, including the following studies performed without adequate subject or parental consent: a study of the technique of transbronchial catheterization of the left atrium in 15 persons undergoing bronchoscopy for other reasons; vesicourethrography in 26 normal newborns to determine the incidence of vesicoureteral reflux; determination of portal blood circulation time and hepatic blood flow by a technique involving percutaneous injection of the spleen, and hepatic vein catheterization in 43 subjects, including 14 normal controls; and withholding penicillin or chloramphenicol from 500 patients with Group A streptococcal infections, or 157 patients with typhoid, respectively.6 Because of these and other cases, Congress enacted the KefauverHarris Amendments of 1962 of the Federal Food, Drug, and Cosmetic 2

I & II Trials of War Criminals Before the Nuremburg Military Tribunals (U.S. Government Printing Office, 1948).




Krugman, Giles, & Hammond, Infectious Hepatitis: Evidence for Two Distinctive Clinical, Epidemiological, and Immunological Types of Infection, 200 J.A.M.A. 365 (1967). Curran, The Tuskegee Syphilis Study, 289 NEW ENG. J. MED. 730 (1973). Beecher, Ethics and Clinical Research, 274 NEW ENG. J. MED. 1354 (1966).

5 6



Act, requiring informed consent in evaluating investigational drugs.7 Currently, both the Department of Health and Human Service and the Food and Drug Administration regulations address informed consent and riskbenefit ratios for proposed experimental treatment involving investigational devices or pharmaceuticals.8

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n . DYNAMICS OF INDUSTRY-FUNDED HUMAN SUBJECTS RESEARCH Investigators are currently faced with circumstances that restrict their ability to obtain funding for scientific research. Inflation-adjusted biomedical research funds barely have remained constant over the past decade.9 In addition, a number of commentators believe that an increasing proportion of the total biomedical research budget has been siphoned away from re7 8


21 U.S.C. § 355(i) (1972). The Department of Health and Human Services regulations provide that informed consent must include: (1) a statement that the study constitutes experimentation, and an explanation of purpose, duration of subject involvement, and procedures, with identification of those procedures which are experimental; (2) a description of foreseeable risk and discomfort; (3) a description of the potential benefit to the patient or to others; (4) the disclosure of alternative treatment; (5) a statement regarding confidentiality; (6) a discussion of compensation and medical care for injuries arising during the experimental procedure, and availability of information regarding further details; (7) the persons to contact for information about the project and about subjects' rights; and (8) a statement that participation in the study is voluntary and that the subject may withdraw at any time without prejudice. 45 C.F.R. § 46.116(a) (1990). In addition to these eight basic points, the Department of Health and Human Services prescribes six additional elements of informed consent: (1) a statement that the research may involve unforeseeable risks; (2) a description of circumstances where the subject's participation may be terminated by the investigator without the subject's consent; (3) the costs to the subject resulting from participation in the study; (4) a description of the consequences of withdrawal from the study and a description of the procedures for doing so in an orderly fashion; (5) a statement that the patient will be apprised of any new findings arising during the course of the study, which might relate to the patient's decision to remain in the study; and (6) the number of subjects involved. Id. § 46.116(b). Food and Drug Administration regulations are similar to those of the Department of Health and Human Services except that they explicitly require that the patient be informed that records may be subject to inspection by the Food and Drug Administration, and they specifically allow exceptions to the general obligation to obtain informed consent, when it is not "feasible," and where time is not adequate to obtain the patient's consent in time to save the patient's life. 21 C.F.R. §§ 50.20 to 50.25 (1990). Hathaway, Revitalizing the Federal Commitment in Support of Biomedical Research, 36 CLIN. RES. 475 (1988).

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search on major killers such as cancer, cardiovascular disease, and stroke, due to the efforts of well organized and vocal special interest groups who argue that more should be spent on highly visible, though numerically less significant problems, like AIDS. In addition, the multi-million dollar price tag for the human genome sequencing project is likely to come from existing research dollars, rather than from new appropriations.10 Investigators thus are competing harder for a shrinking pool of peerreviewed grant dollars. Contract work for pharmaceutical manufacturers therefore presents the investigator with an attractive alternative to competing for peer-reviewed funding. Indeed, a recent membership survey by the American Federation for Clinical Research indicates that close to 40% of the respondents participated in manufacturer-sponsored clinical research." In a typical arrangement, an investigator agrees to enter patients who meet specific entry criteria into a protocol written by a drug company to satisfy the Food and Drug Administration's requirements for Phase I, II, or III testing. There are several benefits to the investigator. Initially, through participation in the trial, the investigator may gain access to drugs for patients that are not otherwise available. From the patient's point of view, his or her personal interests and the investigator's are congruent in this regard, and, in fact, access to experimental therapies probably represents the major attraction to patients to participate in a clinical trial. Furthermore, by participating in and publishing clinical research, the investigator's academic reputation is enhanced, increasing prospects for promotion, tenure, salary increases, and other forms of recognition. This represents a temptation for the investigator to act in ways that may not be entirely consistent with the patient's best interest, and will be the subject of a forthcoming report of the AMA Council on Ethics and Judicial Affairs.12 However, such benefit to an investigator is indirect and arguably self-evident, and, furthermore, all endeavors have this diluted form of conflict of interest. There is also the cash payment often made to investigators in exchange for enrolling patients in pharmaceutical manufacturer-sponsored


Norman, Congress Readies AIDS Funding Transfusion, 230 SCIENCE 418 (1985); Stoto, Blumenthal, Durch, & Feldman, Federal Funding for AIDS Research: Decision Process and Results in Fiscal Year 1986, 10 REV. INFECT. DIS. 406 (1988); Wittenberg, NCI Budget Tapped for AIDS Care Costs, 80 J. NATL. CANCER INST. 1523 (1988); Watson, The Human Genome Project—Past, Present, and Future, 248 SCIENCE 44 (1990); Sharpe, The Crisis in Funding: A Time for Decisions, 62 CELL 839 (1990).


American Federation for Clinical Research, Guidelines for Avoiding Conflict of Interest, 38 CLIN. RES. 239 (1990). 12 AMA Council on Ethics and Judicial Affairs, Conflicts of Interest and Biomedical Research, in REPORTS OF THE COUNCIL ON ETHICAL AND JUDICIAL AFFAIRS 1 (Dec.


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clinical trials. In many such arrangements, investigators will be paid a dollar sum for each patient entered into a study. This capitation payment varies, but typically is $2000 to $5000 per subject, and is nominally designed to offset the additional data management costs incurred by the investigator, and occasionally those additional medical expenses that are specifically incurred by participating in the study. The remainder of investigator-manufacturer arrangements involve payment of a fixed amount to the investigator, not explicitly tied to the number of subjects entered into the study.13 Thus, because most patients' medical expenses are covered by third party commercial insurers, Medicare, Medicaid, or Veterans' Administration benefits, after the initial five to 12 patients have been entered into the study, the data manager's salary has been paid, yielding the investigator a windfall of $75,000 to $225,000 for a study enrolling 50 patients, and up to $475,000 for a study enrolling 100 patients.14 Although institutional and contractual safeguards can prevent the investigator from appropriating the money in excess of that required for conducting the study to use for personal enrichment, the money commonly is used to support travel to scientific meetings, purchases of supplies and equipment, and to fund research efforts that may not have been judged sufficiently meritorious to warrant funding via the standard peer review process. This money poses a temptation for the clinical investigator to enter a patient into an experimental study for a condition for which another treatment is known to be effective, or even surmised to be superior, thus denying the patient the opportunity to receive the best available treatment. It is this potential benefit to the investigator that represents a direct financial benefit—one not widely appreciated by research subjects. This situation is considered to represent an ethically suspect temptation to the investigator to transgress fiduciary obligations to the patient.



The authors have surveyed the records of the Office of Sponsored Projects at the University of Arizona College of Medicine and found that approximately one-half the manufacturer-funded studies are funded using capitation payments, and one-half are funded using block payments. However, because clinical trials have explicit target enrollments, even projects that involve block payments amount to de facto capitation payment, as any investigator with an eye to the future knows that failure to fulfill a study quota will reduce the chances of obtaining further funding from the manufacturer. The salary and fringe benefits to pay a data manager cost approximately $25,000 and a typical data manager can handle approximately 50 patients. Panel Discussion, Symposium on Methodology and Quality Assurance in Cancer Clinical Trials, 69 CANCER TREAT. REP. 1223 (1985). See Memorandum from Chairmen, Pediatric Oncology Data Managers' Committee to Principal Investigators and Data Managers (Apr. 27, 1990). Whether a physician who accepts manufacturers' payments, ostensibly to cover medical expenses, and simultaneously bills Medicare, could be prosecuted for fraud is beyond the scope of this article.



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III. GENERAL INFORMED CONSENT DOCTRINE IN THE COURTS The courts have taken an interest in informed consent for medical treatment, usually in the setting of routine care as opposed to the settings of therapeutic or non-therapeutic research. Many legislatures have addressed the topic as well. The many nuances in legislation and some of the more obscure common-law authorities are beyond the scope and purpose of this article. Although most of the decisions do not specifically address experimental medical treatment, a number of the issues raised in relation to informed consent for routine medical care are relevant to the present discussion. The first Anglo-American judicial treatment addressing medical informed consent was Slater v. Baker and Stapleton,15 a 1767 English case holding two practitioners liable for disuniting a fracture without the patient's prior consent. The necessity for informed consent for routine medical procedures is rooted in the patient's right to self-determination, as outlined in a number of early 20th century cases from this country. In Mohr v. Williams,16 the plaintiff consulted the defendant surgeon because of hearing difficulties. The surgeon noted a perforated tympanic membrane and a middle ear polyp on the right, but was unable to adequately examine the left because of excessive earwax; he obtained consent to operate on the plaintiffs right ear. Under anesthesia, the surgeon was able to clean the patient's left ear sufficiently to examine it, and judged its condition to be, in fact, worse than the right. He therefore operated on the left ear. Claiming that her hearing was worse after surgery, the patient sued the surgeon. The court found for the plaintiff, stating: "The free citizen's first and greatest right, which underlies all others—the right to himself—is the subject of universal acquiescence, and this right necessarily forbids a physician or surgeon . . . to violate without permission the bodily integrity of his patient . . . without his consent or knowledge."17 In Pratt v. Davis,n the court found against a surgeon who had performed a hysterectomy without obtaining prior consent from the patient. The court limited "implied" consent to specific situations, holding that explicit consent by the patient was required in almost all clinical situations: Ordinarily, where the patient is in full possession of all his mental faculties and in such physical health as to be able to consult about his condition without the consultation itself being fraught with dangerous consequences to the patient's


95 Eng. Rep. 860, 2 Wils. K. B. 359 (1767). 95 Minn. 261, 104 N.W. 12 (1905). 17 Id. at 14. 18 224 Ill. 300, 79 N.E. 562 (1906). 16



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health, and when no emergency exists making it impracticable to confer with him, it is manifest that his consent should be a prerequisite to a surgical operation.19

A similar outcome is noted in Rolater v. Strain.20 There, the plaintiff had consented to surgical drainage of an infection in her great toe, but she had specifically asked that no bone be removed. In the course of the operation, the surgeon judged that adequate drainage of the infected joint could not be accomplished without resecting a sesamoid bone that overlay the joint. The patient sued, claiming pain and mental distress. The defendant asserted that this case differed from Mohr v. Williams and Pratt v. Davis, because the patient had consented to surgery, and because the surgery was performed on the proper foot. However, the court held that because the surgeon had performed a different operation from the one to which the patient had consented, there was little distinction between this case and Mohr v. Williams and Pratt v. Davis. In perhaps the best known of these early cases, Schloendorffv. Society of New York Hospital,21 the plaintiff alleged that although she had only given permission for a pelvic examination under anesthesia to evaluate her uterine fibroid tumor, and had specifically forbidden any surgery, her surgeons had performed a hysterectomy. Justice Cardozo wrote: Every human being of adult years and sound mind has a right to determine what shall be done with his own body; and a surgeon who performs an operation without his patient's consent commits an assault, for which he is liable in damages. This is true, except in cases of emergency where the patient is unconscious, and where it is necessary to operate before consent can be obtained.22

With the necessity for informed consent grounded in the individual's right to self-determination, it is still necessary to address standards for informed consent—that is, how much must a patient be told in order to balance risks and benefits accurately. Historically, three general standards have been adopted to determine what information must be disclosed to patients—the practitioner-based standard, the reasonable patient standard, and the individual patient standard (which apparently has been embraced in one jurisdiction—Oklahoma). In Salgo v. Leland Stanford Jr. University Board of Trustees,™ a patient with severe aortic atherosclerosis and leg claudication became paraplegic after a translumbar aortogram. In finding for the defendant, the 19

Id. at 564. 39 Okla. 572, 137 P. 96 (1913). 21 211 N.Y. 125, 105 N.E. 92, 133 N.Y.S. 1143 (1914). 22 Id. at 9 3 . 23 154 Cal. App. 2d 560, 317 P.2d 170 (1970). 20



court alluded to the discretion inherent in the practitioner-based standard:

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[E]ach patient presents a separate problem . . . the patient's mental and emotional condition is important and in certain cases may be crucial, and . . . in discussing the element of risk a certain amount of discretion must be employed consistent with the full disclosure of facts necessary to an informed consent. . . . [The] physician has such discretion consistent, of course, with the full disclosure of facts necessary to an informed consent. 24

Natanson v. Kline25 also articulates the practitioner-based standard. This case involved a woman who developed a necrotic chest wall ulcer following Cobalt-60 irradiation after a mastectomy for breast cancer. The court stated: [W]here the physician or surgeon has affirmatively misrepresented the nature of the operation or has failed to point out the probable consequences of the course of treatment, he may be subjected to a claim of unauthorized treatment. But this does not mean that a doctor is under an obligation to describe in detail all of the possible consequences of treatment. . . . The duty of the physician to disclose, however, is limited to those disclosures which a reasonable medical practitioner would make under the same or similar circumstances. How the physician may best discharge his obligation to the patient in this difficult situation involves primarily a question of medical judgment. So long as the disclosure is sufficient to assure an informed consent, the physician's choice of plausible courses should not be called into question if it appears, all things considered, that the physician was motivated only by the patient's best therapeutic interests and he proceeded as competent medical men would have done in a similar situation.26

In Karp v. Cooley,21 a case involving experimental treatment, the practitioner-based standard is forcefully affirmed as well. In this case, the plaintiffs husband underwent open-heart surgery for a ventricular aneurysm. After resection of the aneurysm, however, there remained insufficient functional ventricular muscle to maintain circulation. The surgeon implanted a total prosthetic heart device, which kept the patient alive for another two days while he waited in vain for an organ donor. The widow sued, alleging, among other things, that the surgeon had failed to obtain adequate informed consent. The court, in rejecting her claim, stated: The Texas standard against which a physician's disclosure or lack of disclosure is tested is a medical o n e which must b e proved by expert medical testimony of what


Id. at 181. 186 Kan. 393, 350 P.2d 1093 (1960). 26 Id. at 1103, 1106. 27 493 F.2d 408 (5th Cir. 1974). 25



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a reasonable practitioner of the same school of practice and the same or similar locality would have advised a patient under similar circumstances.28

Further, quoting from Wilson v. Scott29 with approval, the court stated: "The question is not what, regarding the risks involved, the juror would relate to the patient under the same or similar circumstances, or even what a reasonable man would relate, but what a reasonable medical practitioner would do."30 In the three decisions cited above, the courts have taken the position that the standard to which a physician is bound in obtaining informed consent is whatever constitutes customary professional practice. Although a standard of this sort is certainly better than no standard at all, it does not embrace three important considerations. First, the practitioner-based standard of disclosure does not allow the patient recourse when the prevailing standard is one of silence. Second, it refers to a local custom of physicians, but with the ready nationwide availability of medical journals, as well as both manual and computerized means for searching them, and with the frequency and accessibility of national and even international medical meetings, it is no longer reasonable to speak of a local standard of medical knowledge. Rather, despite the lack of access in some areas to certain specialized medical services for which there is insufficient demand to warrant their use on more than an occasional basis, it is reasonable to speak of a national standard of medical knowledge among all practitioners of a given specialty. Third, and most important, the physician-based standard of informed consent substitutes the judgment of the physician for the judgment of the patient in a situation where the patient's judgment should be paramount, thus violating the principle of self-determination stated by Justice Cardozo in Schloendorff v. Society of New York Hospital. In the reasonable patient standard of informed consent, adequacy of informed consent is judged according to whether the physician has provided sufficient information for a hypothetical reasonable individual in the same or similar circumstances to make an informed judgment regarding the advisability of a medical procedure. The definition of "same or similar circumstances," and the extent to which they allow reference to subjective preferences, is one of the mysteries of informed consent doctrine. This standard was articulated in Canterbury v. Spence.31 In this case, a 19-yearold man underwent a laminectomy because of back pain and a filling defect that had been detected on a myelogram in the vicinity of the fourth thoracic


Id. at 420. 412 S.W.2d 299 (Tex. 1967). 30 Id. at 301. 31 464 F.2d 772 (D.C. Cir. 1972).


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vertebra, which was judged to be most consistent with a ruptured intervertebral disc. At surgery, although no ruptured disc was found, the spinal cord was noted to be edematous, covered by telangiectatic blood vessels, and without normal epidural fat. On the second postoperative day, the patient fell while voiding unattended, and shortly thereafter noted paraparesis and dyspnea. A second neurosurgical procedure yielded only modest benefit, and the patient remained permanently paraparetic, requiring crutches, and incontinent. The patient sued his neurosurgeon for damages, alleging that he had not been informed of the risk of paralysis. The court held that a physicianbased standard was not sufficient to ensure an adequate informed consent. The court had difficulty in determining that there was a single prevailing medical custom regarding the extent of disclosure required in obtaining consent. Further, the court was concerned that a physician-based standard did not protect a patient from a standard of silence, that such a standard did not respect the patient's autonomy, and that such a standard was at variance with more general standards for required disclosure in non-medical instances: [The] reality of any discernible custom reflecting a professional consensus on communication of option and risk information to patients is open to serious doubt. We sense the danger that what in fact is no custom at all may be taken as an affirmative custom to maintain silence. . . . With but few exceptions . . . society demands that everyone under a duty to use care observe minimally a general standard. Familiarly expressed judicially . . . the yardstick is that the degree of care which a reasonable prudent person would have exercised under the same or similar circumstances. . . . In sum, the physician's duty to disclose is governed by the same legal principles applicable to others in comparable situations. . . . Any definition of scope in terms purely of a professional standard is at odds with the patient's prerogative to decide on projected therapy himself. . . . In our view, the patient's right of self-decision shapes the boundaries of the duty to reveal. That right can be effectively exercised only if the patient possesses enough information to enable an intelligent choice. The scope of the physician's communications to the patient, then, must be measured by the patient's need, and that need is the information material to the decision. . . . [A]ll risks potentially affecting the decision must be unmasked. . . . [The physician] cannot know with complete exactitude what the patient would consider important to his decision, but on the basis of his medical training and experience he can sense how the average, reasonable patient expectably would react.32

That same year, Canterbury v. Spence was followed by two other similar cases. In Cobbs v. Grant? the plaintiff underwent surgery for a duodenal ulcer. Eight days after surgery, the plaintiff was readmitted to the 32 33

Id. at 783-87. 104 Cal. Rptr. 505, 502 P.2d 1 (1972).

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hospital because of bleeding from a severed splenic artery, which required a splenectomy. Five months later, the patient had yet a third operation, a partial gastrectomy for a gastric ulcer. This operation was complicated by postoperative bleeding due to premature absorption of a suture, which resolved without surgery. The patient sued, claiming negligence, and claiming that he had not been adequately informed of the potential risk. The court stated that the physician was obligated to disclose to the patient "[A]ll significant perils [which could lead to] . . . the risk of death or bodily harm, and problems of recuperation."34 In Wilkinson v. Vesey,35 the plaintiff received radiation treatments for an unbiopsied mediastinal mass judged most consistent with either lymphoma or a retrosternal thyroid gland. She subsequently developed severe bone and soft tissue necrosis that required numerous reconstructive plastic surgical procedures. She sued, charging failure to correctly diagnose her illness, improper radiation treatment, and failure to obtain informed consent. The court held for the plaintiff, stating: "[A] physician is bound to disclose all the known material risks peculiar to the proposed procedure."36 The reasonable patient standard correctly incorporates the notion that questions about consent are personal, and not medical ones. Even the reasonable patient standard, however, may not be sufficiently protective of patient autonomy, because it does not protect the autonomy and preferences of patients who deviate from the norm. Only a subjective disclosure test fully honors self-determination. An Oklahoma case, Scott v. Bradford,17 contains language that seems to mark it as the only one in United States history to embrace a wholly subjective disclosure test. In this case, a woman experienced urinary incontinence after a hysterectomy for uterine fibroid tumors, owing to an iatrogenic vesico-vaginal fistula, which was later repaired. She alleged that she had not been ade*quately apprised of the risks of the surgery, and that had she been, she would not have consented to the surgery. The court stated: "[W]e therefore, hold the scope of a physician's communications must be measured by his patient's need to know enough to enable him to make an intelligent choice. . . . A risk is material if it would be likely to affect a patient's decision."38 The quoted language does not refer to "a reasonable patient," but rather just to "a patient." It can therefore be read to adopt a wholly subjective standard of disclosure. However, the language follows a refer34

Id. at 11. 295 A.2d 676 (R.I. 1972). 36 Id. at 689. 37 606 P.2d 554 (Okla. 1980). 38 Id. at 558. 35

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ence to the court's agreement with Canterbury's reasonable patient standard. This leaves the intent of the court uncertain. The Bradford court explicitly disagreed with Canterbury's test for causation. Although it adopted the reasonable patient standard of disclosure, Canterbury embraced the atavistic objective test for causation that has been employed by the vast majority of courts. Under this test, the patient can prevail only if it is proven by a preponderance of the evidence that a reasonable patient would have refused the preferred therapy if the non-disclosed, material risk had been disclosed. What Canterbury v. Spence gives to self-determination in disclosure, it takes away in causation. Scott v. Bradford is the only case to consistently support self-determination by apparently adopting subjective disclosure and causation tests. The court states: Although the Canterbury rule is probably that of the majority, its "reasonable man" approach has been criticized by some commentators as backtracking on its own theory of self-determination. The Canterbury view certainly severely limits the protection granted an injured patient. To the extent the plaintiff, given an adequate disclosure, would have declined the proposed treatment, and a reasonable person in similar circumstances would have consented, a patient's right of self-determination is irrevocably lost.39

Scott v. Bradford was followed by Smith v. Karen S. Reisig, M.D., Inc.40 and Spencer v. Seikel.41 In Smith, the defendant gynecologist inadvertently punctured the plaintiffs bladder during a hysterectomy for endometrial cancer. The injury was recognized at the time, and was repaired with the assistance of a urologist. The plaintiff sued, on the basis of the bladder injury, and also claimed that had she been informed that hormonal, nonsurgical treatment was available, she would not have consented to surgery. The court did not address the disclosure issue, but adhered to Bradford's adoption of the subjective test for causation, stating: Ms. Smith testified unequivocally that had she been told of the alternative of , hormonal therapy, she would not have consented to the surgery. Physician argues that the trial court properly determined that reasonable minds could not differ that the plaintiff would have consented even if adequately informed. This conclusion flies directly in the face of the evidence. . . . [W]e are asked to abandon the subjective test adopted in Scott v. Bradford, supra. We decline to do so.42

39 40 41 42

Id. at 559. 686 P.2d 285 (Okla. 1984). 742 P.2d 1126 (Okla. 1987). Smith, 686 P.2d at 288.

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In Spencer, the mother of an infant with severe intra-uterine hydrocephalus sued her obstetrician for not informing her of the option of aborting the fetus at the time the hydrocephalus was discovered. The court followed Bradford both as to the subjective causation test and as to the individual patient disclosure rule, stating: "Thus, because what is material to a patient's decision is subjective to each patient, objective or general professional standards are ineffective to determine the scope of the physician's duty to obtain an informed consent in a given case."43 Although somewhat oblique, this phrase seems, in context, to adopt the wholly subjective test for disclosure. Another disclosure standard is set forth by the court in Fain v. Smith.*4 There, the court seems to adopt what can be argued to be a fourth standard—a hybrid between the reasonable person test, and the wholly subjective test embraced in Scott v. Bradford and its progeny. In Fain, the patient sued after his heart was inadvertently punctured during a pulmonary arteriogram, claiming that he had not been adequately informed of the potential risks. The court observed that the relevant standard is "what a reasonable person with all the characteristics of the plaintiff, including his idiosyncrasies and religious beliefs, would have done under the same circumstances."45 Of additional interest in this context is the early Colorado case of Jackson v. Burnham,46 wherein the court observes that a physician experiments at his peril. Here, the plaintiff suffered from penile phimosis. Rather than incising the constricting foreskin, the accepted medical practice, the defendant physician treated the patient with a hot poultice, which only aggravated the condition, so that ultimately gangrene of the penis occurred. The court held for the plaintiff, stating: "There must be some criterion by which to test the proper mode of treatment in a given case; and, when a particular mode of treatment is upheld by a consensus of opinion among the members of the profession, it should be followed by the ordinary practitioner; and, if a physician sees fit to experiment with some other mode, he should do so at his peril."47 This precedent seems to be at the root of certain hints found in some of the authorities that there might be strict liability for experimentation. If this were the case, the informed consent standard would be irrelevant. Whenever an injury occurred, there would be liability regardless of adequate disclosure. This early Colorado case does not seem to accurately state the law. However, because the au-

43 44 45 46 47

Spencer, 742 P.2d at 1129. 479 So. 2d 1150 (Ala. 1985). Id. at 1155. 39 P. 577 (Colo. 1895). Id. at 580.



thorities cited in the text herein assume that there is not strict liability, and that an appropriate standard for disclosure and causation must be divined before negligence liability attaches.

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IV. INFORMED CONSENT IN THE EXPERIMENTAL SETTING In the experimental situation, the requirement of informed consent is even more pressing. In non-therapeutic experimentation, where the subject is being used as a "human guinea pig," without the possibility of deriving benefit from the experimentation, the need for straightforward informed consent, of a stricter nature than that required for an accepted medical procedure, is obvious. Even in therapeutic experimentation, however, when the patient is being used as a subject for investigational therapy from which benefit may be derived, more detailed informed consent than that required for standard therapeutic procedures is necessary. Here, the patient's hope for cure and the clinical investigator's enthusiasm can interact to overestimate the potential benefit to the patient of participating in the study. Recognition of the special need to protect research subjects found institutional expression in the promulgation of regulations pertaining to research subjects outlined above. Moreover, in addition to these regulations, a body of case law pertaining to research subjects also has developed. It is not easy, however, to discern the overall impact of these cases. The President's Commission for the Study of Ethical Problems in Medicine and Biomedical and Behavioral Research concluded in 1982 that "informed consent for research and for therapy are basically the same, and commentators and federal regulators draw on the extensive case law from therapeutic settings in elaborating upon the rules that are appropriate for disclosure and consent in research settings."48 Karp v. Cooky, discussed above, lends credence to that view. However, there are and ought to be significant differences between the two settings, and a brief review of the primary case authorities is offered to make these points. The early cases on informed consent and research deal with basic medical malpractice and simply allude to informed consent. Consider


President's Commission for the Study of Ethical Problems in Medicine and Biomedical and Behavioral Research, Informed Consent as Active, Shared Decision-Making, in 1 MAKING HEALTH CARE DECISIONS: THE ETHICAL AND LEGAL IMPLICATIONS OF INFORMED CONSENT IN THE PATIENT-

PRACTITIONER RELATIONSHIP (1982); Capron, Informed Consent in Catastrophic Disease Research and Treatment, 123 U. PA. L. REV. 340 (1974); Katz, Judges, Physicians, and Patients—The Legal Doctrine of Informed Consent, in THE SILENT WORLD OF DOCTOR AND PATIENT 48 (1984); King, In Search of a Standard of Care for the Medical Profession: "Accepted Practice" Formula, 28 VAND. L. REV. 1213 (1975); Riskin, Informed Consent: Looking for the Action, 1975 U. ILL. L.F. 580.

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Fortner v. Koch*9 There, the plaintiff had developed swelling of the knee, and had been informed by the defendant physician that he had a sarcoma. He was treated by means of an "antitoxin injection." A few days later, the overlying skin ulcerated, and the knee became infected and more painful. Consultation with a second physician, who biopsied the lesion and performed a Wasserman test, revealed that the patient did not have a sarcoma, but rather had a syphilitic gumma, for which he was then successfully treated. In addition to charging the defendant physician with inadequately caring for the patient's syphilis, the plaintiff also alleged that he had been treated with "poisons or harmful drugs." Commenting on this matter, the court stated: We recognize the fact that, if the general practice of medicine and surgery is to progress, there must be a certain amount of experimentation carried out; but such experiments must be done with the knowledge and consent of the patient or those responsible for him, and must not vary too radically from the accepted method of procedure.50

Although Fortner v. Koch does not explicitly state the particulars of an investigator's duty to inform a subject of non-therapeutic research risks, this matter is clearly addressed in a more contemporary Canadian case involving non-therapeutic research, Halushka v. University of Saskatchewan.51 Here, the plaintiff, an engineering student at the university, had agreed, in consideration of a $50 payment, to be a normal subject in an investigation of a new anesthetic agent. He had not been told that he was to be given an investigational drug, nor that there might be risks associated with the study. The study involved insertion of a pulmonary artery catheter and an endotracheal tube. About one hour after the start of the study, the patient suffered a cardiac arrest. Cardiac function was restored by means of open chest cardiac massage. The patient was unconscious for four days, and he was discharged from the hospital 10 days after the incident. Although the plaintiff had been a good student prior to his cardiac arrest, after the incident he was unable to concentrate on his studies and dropped out of the university. The plaintiff sued, alleging that he had not been properly informed of the risks of the study. The appeals court, in affirming judgment for the plaintiff in the court below, invoked a higher standard of consent for experimental studies as compared with that prescribed for standard medical treatment: 49 50 51

272 Mich. 273, 261 N.W. 762 (1935). Id. at 765. 52 W.W.R. 608, 53 D.L.R.2d 436 (Sask. 1966).

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[The] duty imposed upon those engaged in medical research . . . to those who offer themselves as subjects for experimentation, as the respondent did here, is at least as great as, if not greater than, the duty owed by the ordinary physician or surgeon to his patient. There can be no exceptions to the ordinary requirements of disclosure in the case of research as there may well be in ordinary medical practice. The researcher does not have to balance the probable effect of lack of treatment against the risk involved in the treatment itself. The example of risks being properly hidden from a patient when it is important that he should not worry can have no application in the field of research. [Here the court states that "therapeutic privilege" not to inform has no place in, at least, non-therapeutic medical experimentation.] The subject of medical experimentation is entitled to a full and frank discussion of all the facts, probabilities and opinions which a reasonable man might be expected to consider before giving his consent. . . . The undisclosed or misrepresented facts need not concern matters which directly cause the ultimate damage if they are of a nature which might influence the judgment upon which the consent is based.52

The court obviously finds that the therapeutic privilege has no place in nontherapeutic research.53 This ruling also goes beyond many standard therapy cases by allowing recovery even if a risk other than the one not disclosed results in the complained-of injury. In Whitlock v. Duke University,™ the court addresses the issue of whether a higher standard of disclosure and liability is required in a (nontherapeutic) research setting. The plaintiff was a commercial diver with extensive experience with SCUBA and tethered diving equipment and had made a number of decompression, mixed gas, and saturation dives. He volunteered to participate in a number of simulated dives at the Duke University hyperbaric facility, including one dive at a pressure equivalent to 2250 feet of salt water, a world record. When the plaintiff later began to suffer problems suggesting permanent organic brain damage attributable to the simulated dives, he brought suit for compensatory relief. The court compared the level of risk disclosure required for routine medical care specified by the applicable North Carolina law, to the level of risk disclosure required in the setting of medical experimentation, as specified by the Nuremburg Code. First, consistent with Halushka v. University of Saskatchewan, the court indicated that there is no place for the "therapeutic privilege" in nontherapeutic human experimentation. Second, in an experimental setting, the researcher is obligated to disclose "all [emphasis in original] hazards 52 53


Id. at 4 4 3 . The doctrine of therapeutic privilege provides that a physician may withhold information from a patient if the physician judges that fully informing the patient would be harmful to the patient's interests. This clearly violates the patient autonomy principle. Such a privilege should be viewed with skepticism, particularly in an experimental setting. 637 F. Supp. 1463 ( M . D . N . C . 1986).

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reasonably to be expected and the possible effects upon the health and the person of the subject," while in the setting of routine medical care. The applicable North Carolina law "only requires the health care provider to apprise the patient of the 'usual and most frequent risks and hazards' of the procedure."55 Thus, the court found that, in contrast to the setting of routine medical care, where North Carolina statutory law seems to have specified a "reasonable patient" standard of disclosure, like that articulated in Canterbury v. Spence, at least an "individual patient" standard of disclosure, like that articulated in Scott v. Bradford, is required in an experimental setting. Indeed, the opinion can be read to go beyond the individual patient standard to require that all reasonably expected risks be disclosed to all subjects. In Moore v. Regents of the University of California,56 the plaintiff alleged that, while caring for his illness, the defendants had engaged in experimentation using his tissues without his knowledge or permission, and that they had enriched themselves at his expense and without his consent. The plaintiff had undergone a splenectomy for treatment of hairy cell leukemia. Without the patient's knowledge, the defendants developed a cell line from his spleen capable of producing commercially valuable myeloid colony stimulating factor, and entered into commercial licensing agreements for production and marketing with Sandoz Pharmaceuticals and Genetics Institute, Inc. Over the course of nearly the next seven years after the splenectomy, the defendants continued to take tissue specimens from the patient without informing him of the true purpose of these samples. The patient alleged that: [H]ad he known what was taking place, he would not have consented to the splenectomy for these research and commercial activities; would have insisted on participating in control of the use of his blood and bodily substances; would not have permitted these materials to be used by defendants solely for their independent research, commercial activity, and economic benefit; would have considered treatment at another medical facility where his wishes would have been carried out; and would have sought participation in the economic benefit.57

Although this case raises a number of interesting points, of particular relevance to this discussion is the element of disclosure and informed consent. The defendants told the intermediate appellate court that: [I]f plaintiff is permitted t o h a v e decision making authority a n d a financial interest in [his o w n ] cell line, h e would then have t h e unlimited p o w e r to inhibit medical 55

Id. at 1471. 215 Cal. App. 3d 709, 249 Cal. Rptr. 494 (1988), affd in part, rev'd in part, 51 Cal. 3d 120, 793 P.2d 479, 271 Cal. Rptr. 146 (1990), cert, denied. 111 S. Ct. 1388 (1991). 57 Moore, 249 Cal. Rptr. at 500. 56



research that could potentially benefit humanity. He could conceivably go from institution to institution seeking the highest bid, and if dissatisfied, "would claim the right simply to prohibit the research entirely."58

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The court of appeals did not look kindly on this justification for denying the patient knowledge of, and participation in, the economic benefits of the cell line derived from his spleen: We concede that, if informed, a patient might refuse to participate in a research program. We would give the patient that right. As to defendants' concern that a patient might seek the greatest economic gain for his participation, this argument is unpersuasive because it fails to explain why defendants, who patented plaintiffs cell line and are benefiting financially from it, are any more to be trusted with these momentous decisions than the person whose cells are being used. . . . If this science has become science for profit, then we fail to see any justification for excluding the patient from participation in those profits.59

This case illustrates the difficulty in distinguishing between therapeutic and non-therapeutic research. There was no doubt that the patient consented to having his spleen removed, and that the splenectomy was done for his benefit. The issue rather revolved around what was done with the spleen after it was removed, and whether the patient deserved a voice in the disposition of his anatomic parts. While the court was clearly uncomfortable with the prospect of patients vending their organs, or even their tissues to the highest bidder, it recognized that, absent a legislative solution to this problem, similar perhaps to those prohibiting the sale of donor organs, this may be no less appropriate than disposition of the matter to a not entirely disinterested clinical investigator. Further, while the splenectomy was performed for the patient's benefit, it appears that the defendants on many occasions had the patient travel from his home in Seattle to their clinic at the U.C.L.A. medical center, no doubt at his own expense, in order to obtain tissue specimens that may have been more important for their undisclosed research or entrepreneurial endeavors than for his wellbeing. It would appear that, in this regard, the defendants allowed their pecuniary interests to blind them to their fiduciary obligation to the patient. Indeed, the California Supreme Court made conflict of interest and breach of fiduciary duty the cornerstones of its opinion. The Court stated: [A] physician must disclose personal interests unrelated to the patient's health, whether research or economic, that may affect the physician's professional judgment; and . . . a physician's failure to disclose such interests may give rise to a cause of action for performing medical procedures without informed consent or

58 59

Id. at 508. Id. at 508-09.

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breach of fiduciary duty. . . . Yet a physician who treats a patient in whom he also has a research interest has potentially conflicting loyalties. . . . A physician who adds his own research interests to this balance may be tempted to order a scientifically useful procedure that offers marginal, or no, benefits to the patient. The possibility that an interest extraneous to the patient's health has affected the physician's judgment is something that a reasonable patient would want to know in deciding whether to consent to a proposed course of treatment. . . . [A] physician who does have a preexisting research interest might, consciously or unconsciously, take that into consideration in recommending the procedure. . . . [W]e hold that a physician who is seeking a patient's consent for a medical procedure must, in order to satisfy his fiduciary duty and to obtain the patient's informed consent, disclose personal interests unrelated to the patient's health, whether research or economic, that may affect his medical judgment.60

The supreme court reversed the court of appeals' finding that the plaintiffs property had been converted, but it held, nonetheless, that the plaintiff had a cause for action for, as the court put it, breach of fiduciary duty resulting from a failure to disclose facts material to plaintiffs consent or in performance of procedures without his permission. It reasoned that a physician who has a research interest in a patient has a conflict of interest, and that because this conflict might affect the physician's medical judgment, it is a material fact that must be disclosed. Following is a summary of the law relevant to informed consent in the experimental setting. First, a general obligation for the medical practitioner to obtain informed consent for any medical procedure, whether standard-of-care or experimental, is grounded in the principle of patient autonomy, as articulated in Schloendorff v. Society of New York Hospital, and other more recent cases. Second, in contradistinction to the setting of routine medical care, in which there may be special circumstances when a physician has a "therapeutic privilege" not to inform the patient of the procedure, the court in Halushka v. University of Saskatchewan stated that no such therapeutic privilege exists, at least in the setting of nontherapeutic research. Moreover, consistent with Capron's observations, the clinical investigator's obligation to inform the subject in the setting of therapeutic research is as great as the obligation in the non-therapeutic experimental setting.61 While (solely) non-therapeutic research is a straightforward situation, in the setting of therapeutic research, the distinction between the experimental and the therapeutic can be blurred, and it can be difficult for the patient to discern the distinction between procedures performed for the patient's benefit, and those performed for the benefit of the clinical investigation. Additionally, because the patient-subject in therapeutic research is 60 61

Moore, 271 Cal. Rptr. at 150-52. Capron, The Law of Genetic Therapy, in THE NEW GENETICS AND THE FUTURE OF MAN (1972).

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often faced with a debilitating, even life-threatening illness, for which conventional treatment may offer little hope, experimentation in such a situation requires a standard of informed consent at least as strict as in the nontherapeutic setting. The "therapeutic privilege" not to inform has no more place in the setting of therapeutic research than in the setting of nontherapeutic research. Many courts have stated that, in the setting of routine medical care, the treating physician may choose to inform the patient only of those medical risks that a reasonable patient might consider material to a decision regarding treatment. Other courts have held the physician to an even looser, practitioner-based standard of disclosure. However, in Whitlock v. Duke University, the court stated that, in the context of experimental treatment, the patient must be told of all potential risks. It is therefore recommended that the courts explicitly adopt stricter standards of both disclosure and causation in the experimental setting, compared with the setting of routine medical care. Furthermore, wholly subjective disclosure and causation standards should be adopted in the experimental setting, whether therapeutic or non-therapeutic.62 Such an approach would entail certain risks: it could be very time-consuming; it could give too much weight to hindsight; it could be unfair to the physician; and it could lead to "over-informing" patients, thus potentially resulting in patient confusion. In the interests of protecting research subjects, however, these risks are worth taking. The suggested approach would give concrete form to the views of many commentators that informed consent does and/or should have more "bite" in the research setting.63 The higher, wholly subjective, standard of informed consent advocated in the experimental setting would dictate that the patient be told the source and mechanism of study funding. The same would probably be true even under the more widely accepted reasonable patient disclosure standard. Thus far, however, it is not the practice of most physicians. V. CONFLICT OF INTEREST AND INFORMED CONSENT With the exception of Moore, the case law dealing with conflict of interest in the experimental setting is inferential. It may be argued that whenever a patient presents to a medical practitioner, there is a potential 62

Wolljen, Developments

in Regulation

of Informed

Consent to Human Experimentation,

17 LOY.

U . L . REV. 507 (1987); J. KATZ, T H E SILENT W O R L D O F DOCTOR AND PATIENT 75 (1984); Riskin,

supra note 4 8 , at 588; Capron, supra note 4 8 , at 408, 420; R. FADEN & T. BEAUCHAMP, A HISTORY AND THEORY O F INFORMED CONSENT 30 (1986). 63

Adams & Shea-Stonum, Toward a Theory of Control of Medical Experimentation with Human Subjects: The Role of Compensation, 2 5 C A S E W. R E S . L . J . 604 (1975); R. Levine, Informed Consent,


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conflict of interest. Under a fee-for-service arrangement, the practitioner will earn more by performing additional procedures and tests, while in a managed care setting, the practitioner's financial interests are served best by not requesting procedures, tests, and consultations. Under the best of circumstances, however, one would hope that both the physician's sense of professionalism, and the threat of malpractice litigation and utilization review, would lead the physician to recommend a course of treatment without regard for personal enrichment. Under the worst of circumstances, the potential conflict of interest in this context is readily apparent, and is so similar to those to which the patient has been exposed (for example, in having appliances or automobiles repaired), that the patient likely would be on guard.64 A situation somewhat analogous to the situation addressed in this article—payment of physician-investigators for entering patients into clinical studies—arises in the setting of incentive payments to physicians participating in health maintenance organizations or other managed care practice arrangements. In this situation, a physician typically is awarded a bonus payment, corresponding in some fashion to the health maintenance organization's excess of revenues over expenses. As variable (and hence, controllable) expenses consist largely of those spent for tests, procedures, and specialist referrals, such an incentive plan provides a temptation for physicians to underutilize these services.65 A number of lawsuits have been brought alleging malpractice due to the conflict in the physician's personal stake in minimizing expenses, and the physician's fiduciary interest in the patient's health. In Wickline v. California,66 the plaintiff underwent replacement of her terminal aorta by a Teflon graft for treatment of Leriche syndrome. Her postoperative course was difficult. Later that day, the surgeon took her back to the operating room to remove a clot from the graft, and five days later, he took her to the operating room a third time to perform a lumbar sympathectomy. The attending surgeon wanted to keep the patient in the hospital for another eight days, but Medi-Cal only authorized four additional days. Accordingly, the patient was discharged after those four days 64



Relman, Dealing with Conflicts of Interest, 313 N E W E N G . J. M E D . 749 (1985); Berenson, Capitation and Conflict of Interest, 5 HEALTH AFF. 141 (1986); Morreim, Conflicts of Interest—Profits and Problems in Physician Referrals, 262 J . A . M . A . 390 (1989). Egdahl & Taft, Financial Incentives to Physicians, 315 N E W E N G . J. M E D . 59 (1986); Hillman, Financial Incentives for Physicians in HMO's—Is There a Conflict of Interest?, 317 N E W E N G . J. M E D . 1743 (1987); Scovern, Hired Help: A Physician's Experiences in a For-Profit Staff-Model HMO, 319 NEW E N G . J. M E D . 787 (1988); Hillman, Pauly, & Kerstein, How Do Financial Incentives Affect Physicians' Clinical Decisions and the Financial Performance of Health Maintenance Organizations?, 321 N E W E N G . J. M E D . 86 (1989); Hillman, Health Maintenance Organizations, Financial Incentives, and Physicians' Judgments, 112 A N N . INTERN. M E D . 891 (1990). 181 Cal. App. 3d 1175, 228 Cal. Rptr. 661 (1986).

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had elapsed. During the next couple of days following her discharge, the patient developed a wound infection and another clot in her graft, which ultimately required that her leg be amputated, first below, and then above, the knee. The plaintiff filed a lawsuit alleging that Medi-Cal was liable for her injury because its prospective utilization review requirements, used for cost control, led to her premature discharge from the hospital, and ultimately to the loss of her leg. Although the plaintiff won in the lower court, the appeals court reversed the decision. It stated that, although the patient's physician should have objected more strenuously to her premature discharge, and although a third-party pay or can be held liable for negligently causing injury to a patient, neither he nor the non-medical personnel, who were the agents of Medi-Cal, were shown to have acted inconsistent with the standard of care. Despite this outcome, the Wickline court forged new common law in this country. The court essentially ruled that, under certain circumstances, a third-party payor may be liable for injury caused to a patient as the result of a conflict of interest. If a payor's financial incentives lead to suboptimal medical care, liability may attach. The court also indicated that, in appropriate cases, the payor and physician may be jointly liable. Two additional cases, Bush v. Dake61 and Sweede v. CIGNA Healthplan of Delaware, Inc. ,68 raise the issue of inappropriate delay in the diagnosis of cancer due to incentives to physicians to minimize the use of diagnostic tests. In Bush v. Dake, the plaintiff alleged that the defendant physician neglected to perform necessary tests to detect her cervical carcinoma in a timely fashion because of the financial incentive plan of the health maintenance organization with which he had contracted. Although a Michigan state court judge held that a jury should decide whether the financial incentive plan contributed to medical malpractice, the principals agreed to a settlement about which they agreed not to comment. In Sweede v. CIGNA Healthplan of Delaware, Inc., the plaintiff presented to her physician with a lump in her breast. The physician ordered a mammogram, which was interpreted as non-pathologic. Eight months later, when the physician found nipple retraction on examining the breast, he referred the patient to a surgeon. The surgeon diagnosed breast cancer, which was inoperable and incurable. The plaintiff asked for punitive damages, alleging that her physician delayed referring her to a surgeon for biopsy in a timely fashion because of the financial incentives of the CIGNA capitation and withholding plan. Under this plan, 20% of the physician's capitation fee for seeing each patient was withheld. The amount of the 67 68

No. 86-25767 (Saginaw County, Mich., Apr. 27, 1989). No. 87C-SE-171-1-CV (Del. Super. Ct., Feb. 2, 1989) (LEXIS, Gen. Library, Super. Ct. file).

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withhold that the physician ultimately received depended on the number of specialist referrals and hospitalizations made by all participating physicians. The court denied punitive damages, stating that the relationship between the capitation/withhold policy, the physician's compensation, and his decision to refer to a specialist, was too remote. The suit was settled out of court. However, the Delaware legislature found the issue of conflict of interest in this setting to be sufficiently troubling to propose a bill requiring health maintenance organizations to inform enrollees of physician financial incentive policies.69 In Teti v. U.S. Healthcare, Inc.,70 a RICO (statutory civil racketeering) claim was filed against a health maintenance organization with a similar capitation/withhold plan, alleging that "concealment of the Compensation Referral Fund71 from purchasers of healthcare coverage constituted a pattern of fraudulent non-disclosure violative of RICO." The federal court dismissed the case and the racketeering charge. The case is on appeal, and will be refiled in a state court if rejected on appeal. A recent California case indicates that private health insurance companies can be held liable for denial of medical care based on utilization review/cost-containment measures. The case of Wilson v. Blue Cross of Southern California,72 involves a situation in which hospitalization was recommended for a patient with substance abuse and other psychiatric problems, but his insurers refused to pay pursuant to concurrent utilization review. The patient committed suicide. The plaintiffs contended that the patient's insurance contract did not even permit concurrent utilization review, and there was expert testimony that the suicide would have been prevented by hospitalization. The California court of appeals reversed the trial court's summary judgment in favor of the defendants, reasoning that there was a triable issue of fact concerning the contribution of each of the defendants to the wrongful death of the decedent. The cases discussed above stand for the proposition that the existence of an incentive plan to contain costs in the setting of routine medical practice establishes a potential conflict of interest. One can infer that such a conflict is even more unacceptable in an experimental setting. In the latter situation, a higher standard of disclosure should be required because there is no direct countervailing public policy goal of restraining health care expenditures, as is the case in managed care programs. The case law cited above strongly suggests, if not clearly requires, 69

70 71


Meyer, MD Incentives Suit Against HMO Dismissed; Issue Lingers, Am. Med. News, Jan. 12, 1990, at 1, 40. N o . 88-9808 ( E . D . Pa., Oct. 18, 1989). The Compensation Referral Fund is a system used by the defendant H M O s to provide incentives for primary care physicians to minimize referrals to specialists and hospitals. 271 Cal. Rptr. 876, 222 Cal. App. 3d 660 (1990).



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that experimental subjects should be informed of all financial arrangements between clinical investigators and manufacturers. It also implies that financial incentive plans raise the possibility of conflict of interest. In addition, statutory law addressing these issues has been considered at both the federal and state levels. In response to the issues of conflict of interest and disclosure raised by these and other cases, the United States Congress enacted a section of the Omnibus Budget Reconciliation Act of 1986 which states: If a hospital or . . . an eligible organization with a risk-sharing contract . . . knowingly makes a payment, directly or indirectly, to a physician as an inducement to reduce or limit services provided to individuals . . . the hospital . . . or organization shall be subject, in addition to any other penalties that may be prescribed by law, to a civil money penalty of not more than $2000 for each such individual with respect to whom the payment is made. 7 3

This section prohibits incentive payments by hospitals, and it was originally to have covered health maintenance organizations as well. However, a recent amendment defers the application of this prohibition to health maintenance organizations until 1991.74 As noted above in the discussion of Sweede v. CIGNA, the Delaware state legislature has similarly considered legislation to require that health maintenance organizations disclose to their enrollees the existence of capitation/withholding agreements between insurers and their primary care physicians. The state of California has enacted a statute requiring that an experimental subject be informed of the source of an investigator's funding for a study. The California Health and Safety Code requires that the subject or guardian be informed of "the name of the sponsor or funding source, if any, or manufacturer if the experiment involves a drug or device, and the organization, if any, under whose general aegis the experiment is being conducted."75 This provision was cited by the California Supreme Court in Moore v. Regents of the University of California; however, it should be noted that, although this statute requires that the experimental subject be told who is funding the study, it does not require that the subject be told the mechanism by which the study is funded, or the amount of money involved. In keeping with the principle of full disclosure elaborated above, it would appear necessary to inform the patient not only of the source of funding, but also of the investigator's potential conflict of interest by par73 74


4 2 U.S.C.A. § 1320a-7a(b) (West 1983 & Supp. 1990). Omnibus Budget Reconciliation Act of 1986, Pub. L. N o . 99-509, Title I X , §§ 9313 (c), 9317 (a), (b), 100 Stat. 2003 (1986); Omnibus Budget Reconciliation Act of 1987, P u b . L. N o . 100-203, Title IV, §§ 4118 (e)(l), (6)-(10), 4039 (h)(l), 101 Stat. 1330 (1988); Omnibus Budget Reconciliation Act of 1989, Pub. L. N o . 101-239, Title V I , § 6003 (g)(3)(D)(i), 103 Stat. 2153 (1989). C A L . HEALTH & SAFETY C O D E § 2 4 1 7 3 (1978).

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ticipating in a capitation arrangement, or in the analogous block grant arrangement with the understanding that the clinical investigator has a target subject enrollment for which to aim.76 Another argument in favor of such disclosure may be premised on the fact that federal regulations already require that subjects be told that Food and Drug Administration officials might review parts of their medical records and that there might be "unforeseeable risks." The potential conflict of interest inherent in manufacturer funding is far more significant than the required disclosure of officials reviewing charts, or of "unforeseeable risks."

VI. REACTIONS TO INDUCEMENTS OFFERED TO INVESTIGATORS BY MANUFACTURERS Although coverage of conflict of interest issues in medical ethics and legal medicine textbooks is scanty,77 a number of commentators have addressed the potential conflicts of interest inherent in pharmaceutical company-sponsored research. Jellinek suggests that Institutional Review Boards should be aware of the source of funding for research proposals, and that this information should appear on subject consent forms.78 He voices concern that there may be a conflict of interest between the ethical principles of research and the pharmaceutical companies' legitimate financial interests, and also that, at least on the margin, knowledge of the financial sponsorship of a study might influence a subject's willingness to consent. In response, Levine asks: Should we distract many prospective subjects with irrelevancies in order to meet the needs of a small minority? . . . Are we obliged to disclose information merely



Because applicable Institutional Review Board guidelines require that information be conveyed to human subjects in a manner that is understandable to a person with an eighth grade education, perhaps the patient should be told specifically that this potential conflict of interest might influence the physician's choice as t o whether standard or experimental treatment is offered to the patient. A review of recently published textbooks and monographs on medical ethics and legal medicine reveals that conflict of interest issues are not indexed in N . SIDLEY, LAW AND ETHICS (1985); H . ENGLEHARDT, T H E FOUNDATIONS O F BIOETHICS (1986); G. POZGAR, LEGAL ASPECTS O F HEALTH C A R E ADMINISTRATION (1987); J. M O N A G L E & D . THOMASMA, M E D I C A L ETHICS (1987); AMERICAN C O L L E G E OF LEGAL M E D I C I N E , LEGAL MEDICINE (1988); G . A N N A S , JUDGING MEDICINE (1988); E . LOEWY, TEXTBOOK O F M E D I C A L ETHICS (1989); R. VEATCH, M E D I C A L ETHICS (1989); J. VEVAINA, R. B O N E , & E . KASSOFF, LEGAL ASPECTS O F MEDICINE (1989); T. ACKERMAN & C . STRONG, A

CASEBOOK OF MEDICAL ETHICS (1989). Such issues a r e , however, indexed in R. LEVINE, ETHICS AND REGULATION OF CLINICAL RESEARCH (1986), but only to be dismissed as a problem in the text. 78

Jellinek, IRB's and Pharmaceutical

Company Funding of Research,

4 I.R.B. 9 (Oct. 1982).



because it would satisfy the curiosity of some people? How many people want to

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know and what effect would such information have on their decisions?79

Levine's argument is not persuasive and begs the question. Although empirical research regarding industry-funded research and patient reaction to disclosures about funding is encouraged, there is no empirical support for Levine's assumption that few subjects would wish to know the funding source, and that such disclosure would "distract" patients. Respect for patients and their right to self-determination argues in favor of placing the burden of risk of error concerning such factual issues on those who oppose disclosure of any specific item. Moreover, similar concerns, voiced when the government announced it would require disclosure concerning the availability vel non of funding for treatment of injuries resulting from research, have never been shown to have been realized.80 Siris has described potential problems with pharmaceutical companysponsored research.81 She asserts that a pharmaceutical manufacturer's economic interest is less likely to lead to research of significance than would direction by a government pandering to special interest groups. Nevertheless, she raises a number of valid points regarding the influence that such outside funding may have on the direction of a laboratory's research, on the rigidity and rigor of the design and evaluation of the trial, and on the pressure on clinical investigators to enter patients. She points out that the money paid by pharmaceutical manufacturers to clinical investigators can provide support for their non-pharmaceutical company-based research, and sees this as a positive result of the collaboration. However, she does not offer any suggestion as to how the investigator can avoid the conflict of interest inherent in a situation where funding for the investigator's personal research interests depends on enrolling patients in clinical trials. Roizen also raises the possibility that per capita payment to physicians for entering patients into clinical studies could encourage them to enroll patients into studies that were not necessarily in their best interests, in contravention of the physician's fiduciary responsibilities.82 He points out that to object that excessive regulation of such payments might prevent physicians from filling their quotas and persuade manufacturers to take 79



Levine, Response to IRB's and Pharmaceutical Company Funding of Research, 4 I.R.B. 9 (Oct. 1982). Fishbein, Objections to the "Interim Final Regulation," 1 I.R.B. 9 (Mar. 1979); Levine, Advice on Compensation: More Responses to DHEW's "Interim Final Regulation," 1 I.R.B. 5 (Apr. 1979); O'Sullivan, Boston's Response to the "Interim Final Regulation," 1 I.R.B. 9 (June/July 1979); 4 5 C.F.R. § 46.116 (1990). Siris, In Search of Funding: The Clinical Investigator and the Drug Company, 5 I.R.B. 1 (Nov./ Dec. 1983). Roizen, Why I Oppose Drug Company Payment of Physician/Investigators on a Per Patient/Subject Basis, 10 I.R.B. 9 (Jan./Feb. 1988).

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their money elsewhere only acknowledges and reinforces the suggested existence of such a possible bias in favor of enrolling marginal patients. In response to Lewis' defense of manufacturers' capitation payments,83 which holds that capitation represents the most convenient method for compensating clinical investigators, that per capita payments do not grossly exceed the costs of research, and that clinical investigators do not personally profit from these payments, Roizen states that regardless of the level of reimbursement, capitation payments structure the relationship among patients, clinical investigators, and manufacturers toward recruitment of subjects, and may give short shrift to the interests of experimental subjects.84 Roizen further speculates that the incentive for clinical investigators to enter patients into clinical trials may be even greater with smaller capitation payments, because they will have to enroll more subjects to cover their fixed costs. Although this contention is logical, it is likely that clinical investigators are shrewd enough to insist on capitation payments sufficiently large to be worth their while, and furthermore, that manufacturers want to offer sufficient reimbursement to ensure adequate patient accrual. Spiro, too, directly addresses certain important concerns.85 He points out that, as federal support for clinical training and research has declined, the temptation to make up the shortfall to support academic activities by participating in clinical trials has grown increasingly difficult to resist. He observes that many journals require that individuals writing about drugs or devices disclose any financial interest they may have in such products to reveal the source of any potential bias. Accordingly, it is equally reasonable that the patient be made aware of the difference between the one or two hundred dollars the physician gets for a consultation, and the thousands that may be paid for entering a patient in a clinical trial. In a recent editorial, Relman commented on conflict of interest in clinical investigation.86 Although he directs his commentary toward the problem of stock ownership, rather than the problem of excessive payments to clinical investigators, many of his arguments are equally applicable to this latter problem. He points out that under the best of circumstances, it can be difficult for a scientist to maintain an objective perspective about his own work, and that such bias can 6nly be worsened by financial conflict of interest. He also points out that intellectual fulfillment and scientific recognition represented sufficient incentives for physicians to participate in clinical and basic research, long before the issue of

83 84

85 86

Lewis, The Case for Per Patient Payments, 10 I.R.B. 9 (Sept./Oct. 1988). Roizen, Why I Still Oppose Percapita Payment: A Response to Lewis, 11 I.R.B. 11 (July/Aug. 1989). Spiro, Mammon and Medicine: The Rewards of Clinical Trials, 255 J . A . M . A . 1174 (1986). Relman, Economic Incentives in Clinical Investigation, 320 N E W E N G . J. M E D . 933 (1989).

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financial incentives arose. He advocates proscription of physicians' financial involvement in a company whose product they are evaluating, either in the form of stock ownership, or as paid consultants. An excellent survey of general medical conflict of interest standards, guidelines, and pronouncements has been written by Rodwin.87 He notes analogies to consumer-protection laws, disclosure by lawyers to clients, and disclosure by government officials. Consistent with his observations, disclosure alone is often not enough to obviate conflict of interest concerns, and that the attorney-client context offers a fruitful vineyard for harvest by authorities who wish to develop the field of medical conflict of interest. Lind has recently addressed a similar issue—the payment of "finder's fees" for referral of patients for clinical studies. He states: [T]his practice is flawed, because it has the potential to violate the patient's trust in the referring physician, the investigator, or both, in the process of clinical research. . . . That finder's fees may at times be offered and accepted without compromising patient care does not negate the fact that their being offered increases the risk that a physician's judgment will be altered.88

Although Lind draws a distinction between finder's fees and excessive reimbursement to clinical investigators by manufacturers, his arguments are considered to be as applicable to the latter situation as to the former. VII. APPROACHES PREVIOUSLY PROPOSED TO DEAL WITH INVESTIGATOR CONFLICT OF INTEREST Owing to difficulty in obtaining peer-reviewed grant funding, investigators continue to search for funding sources for their academic pursuits. The generous per capita payments offered by pharmaceutical manufacturers for entering patients into clinical trials are far in excess of the funds required to offset the investigator's direct and indirect costs of participating. .This excess represents a bounty, and offers the investigator a source of funding not subject to the vagaries, or rigor, of competitive peer review. Unfortunately, this practice raises two serious ethical issues—first, a conflict of interest, because this money can tempt the clinical investigator into directing patients toward well-funded experimental treatments, and away from conventional treatment (or no treatment at all); and second, a 87

Rodwin, Physicians' Conflicts of Interest: The Limitations of Disclosure, 321 NEW ENG. J. M E D . 1405 (1989). 88 Lind, Finder's Fees for Research Subjects, 323 NEW ENG. J. MED. 192 (1990).

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breach of informed consent, in that patients are not told of this potential conflict. The patient autonomy principle, as expounded in Schloendorff v. Society of New York Hospital and a number of other cases relating to informed consent, dictates that patients be made aware of the source and amount of funding for studies into which they are being encouraged to enter. It is difficult to see what compelling purpose could be served by concealing from the patient the fact that the investigator counseling the patient to enroll in a study might not be acting in the role of an entirely disinterested advocate for the patient's health. As noted in Spiro's and Lind's commentaries, and as physicians in clinical practice will agree, most patients will consent to most recommended procedures; but just as this does not eliminate the justification for informed consent, so too would a healthy distance between the investigator and the direct financial benefit resulting from the patient's participation in a study be salutary in removing both the appearance as well as the likelihood of taint. There are a number of approaches to eliminating the probability of conflict of interest and violation of fiduciary obligations in pharmaceutical manufacturer-sponsored clinical trials. A simple, though Draconian, solution would ban any research in which the physician-investigator has a potential fiscal interest that might lead to such a conflict. But however appealing this solution may be from an absolutist point of view, it is probably impractical. Even without a hint of direct financial benefit, an investigator's academic reputation stands to benefit from successful research. Moreover, because this sort of benefit may result from almost any human endeavor (even altruism can feel good, and earn the admiration of others), it seems futile to try to eliminate it. Further, it could be argued that most potential experimental subjects are probably aware of this potential conflict of interest, and the conventional informed consent procedure is devised to disclose and to protect subjects against it. Similarly, because academic reputation usually translates into less ethereal rewards such as promotion, tenure, and salary, these are so intimately intertwined with the concept of reputation and merit that the only way to eliminate this potential conflict would be to eliminate criteria of merit and reputation from considerations of promotion, tenure, and salary. Whether this would be desirable is beyond the scope of this discussion. Moreover, as with reputation, it can be argued that most potential research subjects are aware that academic advancement customarily requires academic success, and that the current informed consent procedure is designed to disclose and protect against these sorts of conflicts. Finally, the rewards, financial and otherwise, stemming from academic productivity are not as direct as those afforded by capitation payments for entering

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patients into studies, and thus the occasion of conflict of interest is less clearcut. Whether to forbid or require disclosure of one's financial interest in the economic health of the manufacturer of the drug or device the clinical investigator is offering to a patient is also problematic. While many academic physicians may participate in retirement funds that may have an interest in a pharmaceutical manufacturer, or may own shares of a pharmaceutical manufacturer's stock, it would seem that, in this situation, the direct benefit to the investigator is so small as not to merit notice.89 The American Medical Association's Council of Ethical and Judicial Affairs appears—perhaps inadvertently—to address the issue of capitation payments from pharmaceutical manufacturers and other commercial concerns, stating in its section on fee-splitting: A physician may not accept payment of any kind, in any form, from any source, such as a pharmaceutical company or pharmacist, an optical company, or the manufacturer of medical appliances and devices, for prescribing or referring a patient to said source for the purchase of drugs, glasses, or appliances . . . payment violates the requirement to deal honestly with patients and colleagues. The patient relies upon the advice of the physician on matters of referral.90

Although this statement deals specifically with one physician paying another physician for referring patients for the purpose of services, the fact that experimental pharmaceuticals may be provided free to the patient in a clinical trial does not invalidate the basis for the prohibition—namely, that such a tainted relationship between the physician and the manufacturer violates the physician's fiduciary duty. Harvard Medical School was recently embarrassed when a faculty member at the Massachusetts Eye and Ear Infirmary conducted a trial of a vitamin A-containing ointment for the treatment of keratoconjunctivitis sicca, and published encouraging reports of its efficacy. This individual did not disclose that he owned over half a million dollars worth of stock in the company that manufactured the ointment, leading to an investigation of his conduct by Harvard and termination of his grant support by the National Institutes of Health. In response to concerns about this conflict of interest, a second study, this time a multi-institutional, randomized, double-blind 89


Given their general financial naivete, the majority of physicians are probably not even aware of the investments of their pension funds. On the other hand, when an investigator is a large stockholder of the pharmaceutical manufacturer, as may well be the case with a small biotechnology firm, the potential for conflict is much greater. In the latter case, therefore, a physician should not be permitted to perform clinical testing of products manufactured by the company, because of the potential conflict of interest. A M A Council on Ethical and Judicial Affairs, Conflicts of Interest, in REPORTS OF THE COUNCIL ON ETHICAL AND JUDICIAL AFFAIRS 9 (Dec.


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study financed by the manufacturer was conducted by investigators without links to the company, and concluded that the ointment was no more effective than placebo.91 In response to this episode, Harvard Medical School has recently adopted guidelines pertaining to its faculty members' potential conflicts of interest in clinical research or commercial biomedical technology. 92 The Post Coronary Artery Bypass Graft Surgery Clinical Trial is an example of clinical investigators imposing ethical guidelines on themselves to minimize the risk and the appearance of conflict of interest. This trial is designed to show whether anti-thrombotic treatment and cholesterol reduction after coronary artery bypass surgery can limit the development of atherosclerosis in the grafted vessels. The investigators participating in this study decided at the outset to formulate guidelines to avoid even the appearance of conflict of interest. These guidelines provide as follows: Investigators involved in the Post-CABG study will not buy, sell, or hold stock or stock options in any of the companies providing or distributing medication under study. . . . Each investigator will agree not to serve as a paid consultant to the companies. . . . These guidelines will apply to the investigator's spouse and dependents. The trial's coordinating center will hold and update annually conflictof-interest statements from each investigator. . . . [T]he participation of investigators in educational activities supported by the companies; the participation of investigators in other research projects supported by the companies; occasional scientific consulting to the companies on issues not related to the products in the trial and for which there is no financial payment or other compensation; and financial interests in the companies over which the investigator has no control, such as mutual funds and blind trusts [are not viewed as conflicts of interest, but must be reported annually to the coordinating center].93

91 92


Booth, Conflict of Interest Eyed at Harvard, 242 SCIENCE 1497 (1988). The Harvard guidelines specify that: (1) faculty members complete a disclosure form at least yearly, and, in addition, when any new potential conflict of interest arises; (2) faculty members or their families not own stock in, or work as a paid consultant for, any company whose product the faculty member is investigating in a clinical trial unless specific permission is granted; (3) the faculty member not do research at a university facility for any company in which he or his family has a financial interest unless specific permission is granted; (4) the faculty member not sit on a review committee to evaluate a technology in which he or a family member has a financial interest unless specific permission is granted; (5) the faculty member not serve as an executive for a profitmaking biomedical company, or have a financial interest in such a company that competes with the university without specific approval; (6) the faculty member not make referrals to a business in which he or his family member has a financial interest; (7) the faculty member disclose his financial interest in a subject when it is presented or published. Marshall, When Commerce and Academe Collide, 248 SCIENCE 152 (1990). Healy, Conflict-of-interest Guidelines for a Multicenter Clinical Trial of Treatment After Artery Bypass-Graft Surgery, 320 N E W E N G . J. M E D . 949 (1989).


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To address similar concerns, the National Institutes of Health proposed ethical guidelines for researchers.94 Although these guidelines are very similar to the guidelines imposed by the investigators of the Post Coronary Artery Bypass Graft Clinical Trial on themselves, they were greeted by protest from the scientific community. The protests were generally based on the burdens that compliance would impose, the vagueness of the regulations, disagreement that scientific bias represented a real problem, and the obstacles to technology transfer that the regulations would pose.95 The proposed guidelines were withdrawn, but the problem of conflict of interest remains under study at the national level.96 The American College of Physicians' Ethics Committee also has attempted to address the problem of money changing hands between physicians and pharmaceutical manufacturers in the form of a position paper endorsed by the American Thoracic Society, the American Society of Hematology, and the American Diabetes Association.97 The conclusion of the position paper is that a physician should not participate in arrangements with a pharmaceutical manufacturer that the physician would not want to 94

T h e proposed NIH guidelines provide as follows: [E]ach institution receiving financial support must have written policy guidelines on conflict of interest and the avoidance thereof. These guidelines should reflect State and local laws and must cover financial interests, gifts, gratuities and favors, nepotism, and other areas. . . . With the increased involvement of NIH- and ADAMHA-supported investigators in non-Federally supported activities, particularly those sponsored by industry, have come some complex questions. . . . The intention in formulating [the regulations] is t o ensure that NIH- and ADAMHA-supported research is carried out in a completely objective manner, and that research results a r e not influenced by the possibility of financial gain. . . . Such safeguards are particularly important for situations in which conflicts of interest exist but are not publicly discernible. . . . Private financial interests can adversely affect the accomplishment of [biomedical and behavioral research] by directly affecting the manner in which the research is conducted, by creating the appearance that the research has been influenced by those financial interests, o r by inhibiting the dissemination of research results. . . . [Investigators and consultants] are responsible for avoiding circumstances that would put them in a conflict of interest situation with that research. These provisions also apply to the spouses, dependent children, and other dependents of the individuals mentioned above. Full disclosure of all financial interests and outside professional activities . . . shall b e made t o the institution. . . . N o investigator . . . or their spouses, dependent children, or other dependents, shall be allowed to have personal equity holdings or options in any company that would be affected by the outcome of the research. . . . An investigator . . . may not receive honoraria, fees for service, or a management position from a private source if that individual is involved in an NIH- o r ADAMHA-sponsored project that is evaluating o r testing a product of the source. NATIONAL INSTITUTES O F HEALTH, G U I D E FOR GRANTS AND CONTRACTS 1 (Sept. 15, 1989).


Palca, NIH Grapples with Conflict of Interest, 245 SCIENCE 2 3 (1989); Palca, Conflict Over Conflict of Interest, 245 SCIENCE 1440 (1990). 96 Palca, NIH Conflict of Interest Guidelines Shot Down, 247 SCIENCE 154 (1990); Mervis, NIH Rebuffed, Rethinks New Ethics Regulations, T H E SCIENTIST, Feb. 5, 1990, at 1, 12, 2 0 . 97 American College of Physicians, Physicians and the Pharmaceutical Industry, 112 A N N . INTERN. M E D . 624 (1990); Noble, Response to Physicians and the Pharmaceutical Industry, 113 A N N . INTERN. M E D . 407 (1990).

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be generally known. Given people's ability for dissimulation and selfdeception, this does not seem to be a useful approach. The American Medical Association's Councils on Scientific Affairs and Ethical and Judicial Affairs recently have addressed the issue of conflicts of interest in research.98 In a thoughtful description of the benefits and risks to clinical investigators, medical centers, and corporations, they point out some of the problems already highlighted in this article—the appearance (at the least) of having been "bought," shifting of researchassociated costs to patients or their insurance carriers, and uncompensated use of medical center facilities. They conclude that, on balance, financial links between clinical researchers and industry are beneficial, but that certain safeguards heed to be established. First, they suggest that these financial ties should be disclosed to the medical center where the research is carried out, and to the journals in which the research is published. However, they do not suggest disclosing such ties to the experimental subject. Second, they suggest that each institution establish guidelines regarding potential conflicts of interest, and that all clinical investigator-industry financial arrangements be scrutinized by either the Institutional Review Board, or by a separately constituted body. The American Medical Association's House of Delegates and Council on Ethical and Judicial Affairs also have recently addressed the issue of gifts from pharmaceutical manufacturers, stating that "[s]ome gifts that reflect customary practices of industry may not be consistent with principles of medical ethics."99 One such suspect practice, which is particularly relevant to the present discussion because of its similarity to capitation payments, occurs when the gift depends on the recipient physician's prescribing practices. VIII. A FLEXIBLE APPROACH WITH TEETH: ADEQUATE INFORMATION FOR THE SUBJECT AND SEPARATION OF THE CLINICAL INVESTIGATOR FROM THE INDUSTRY PAYMENT Although proscribing research in which an investigator stood to benefit in any way would unavoidably eliminate significant research, and although defining exactly what constitutes potentially suspect financial benefit to an investigator would be a formidable challenge, a few simple measures to ensure honesty strongly recommend themselves. First, as is required in California, the experimental subject should be informed as to 98


A M A Council on Scientific Affairs and Council on Ethical and Judicial Affairs, Conflicts of Interest in Medical Center/Industry Research Relationships, 263 J . A . M . A . 2790 (1990); Greenberg, Washington Perspective: All Expenses Paid, Doctor, 336 LANCET 1568 (1990). Merz, AMA Issues Rules on Drug Firm Gifts, A m . Med. News, Dec. 14, 1990, at 1, 3 3 .

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the source of funding for the study. In addition, however, full disclosure also requires that the patient be told the mechanism of the funding (for example, capitation or block grant with a target enrollment), as well as the amount of funding. This is especially important in therapeutic research, because unlike the subject of a non-therapeutic investigation, who should have no illusions of consequential health benefits, the subject of a therapeutic investigation is also a patient who depends on the physician-investigator as a supposedly disinterested health care advisor. Accordingly, such a patient fairly must be made aware of potential sources of bias in the physician's advice. It may be objected, of course, that such disclosure might discourage patients from entering useful studies, but if a patient is dissuaded from enrolling in a study owing to concerns about the investigator's possible conflict of interest, this is precisely the sort of decision that the principle of autonomy must respect.100 Despite requiring full disclosure of risks and benefits to experimental subjects, the fact remains that most patients trust their physicians and will do as they advise. It would seem that, in such a situation, the most workable solution would be to concentrate on the investigator's potential conflict of interest, rather than on the subject's informed consent, by eliminating the investigator's direct financial incentive to enroll patients in studies. Clearly, there is a need for Phase I, II, and III studies to develop new drugs, and payments from pharmaceutical manufacturers provide a useful buffer against the vagaries of research funding. The Harvard Medical School and National Institutes of Health guidelines represent a starting point for a solution. Unfortunately, however, because they can be circumvented by prior approval, they are almost meaningless. Without such loopholes, moreover, they are so restrictive as to virtually preclude clinical investigators from stock ownership, whether in the form of individual shares, mutual funds, or via a pension. The issue of stock ownership, either directly, or indirectly via pension plans or insurance, is, in any event, a complex matter beyond the direct concern of this article. To address the distinct problem of payment to clinical investigators for enrolling patients in clinical studies, a solution that takes into account the needs of pharmaceutical manufacturers for patients, the needs of inves100

Another possibility would be to have experimental studies explained to potential subjects by a truly disinterested third party, an ombudsman. While this is conceptually attractive, in practice, it probably would not work. This ombudsman would only see potential subjects after the investigator had described the study. Because the ombudsman probably would be less familiar with an individual investigator's study than the investigator, the patient would more likely be influenced by the investigator. Further, because the ombudsman would most likely be in some way paid by the investigator's institution, there would be an inherent conflict of interest in that if the ombudsman were judged to be doing the job too effectively, and if subjects were declining participation too often, then the ombudsman's job might be in jeopardy. Only if the ombudsman were truly independent and paid by a private or public non-profit corporation could this represent a viable option.

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tigators for funds, and the needs of patients for protection, can be devised as follows. First, control of the money should be taken from the hands of the investigator, as distance will more likely lead to the appearance, as well as the reality, of unbiased investigation. Pharmaceutical company dollars, whether paid on a capitation basis, or given as a contract, should pass through a mechanism by which the direct cost associated with conducting the study—data manager salaries, photocopying, mailing, unreimbursed medical expenses incurred by participation in the study, as well as hospital and medical school indirect costs—are paid with the first dollars. Any remaining money—the money that, in the present arrangement, would be employed by the investigator for personal purposes—should be placed in an institution-wide pool.101 Investigators throughout the institution, including the investigators actually accruing patients to the study, could submit proposals for competitive local peer review to draw on this money, in a fashion similar to that currently used for institutional Biomedical Research Support Grants. In this way, the investigators responsible for accruing patients would have no direct stake in the payments for their patients, and thus would be much less susceptible to the potential bias inherent in the present arrangement. Because they could compete for these windfall funds (along with other members of the institution), and because their reputations would benefit from a well-conducted study, there would still be an incentive for these investigators to enter patients into studies. Now, however, the incentives would be no different from those operating in the setting of a National Institutes of Health peer-reviewed grant. One might argue that government funding presents the same potential conflicts of interest as does industry funding. It is our experience, however, that government-funded research projects do not involve any substantial excess payments over the true costs to the researchers and their institutions. Moreover, the competitive grant funding process serves as a buffer against improper involvement of subjects as might occur in industryfunded projects. Finally, informed consent permits should include wording that informs patients of this arrangement.102 Excess industry payments to clinical investigators should be distin101

While this manuscript was in press, a similar proposal was advanced by a group from the University of Pennsylvania. Hillman, Eisenberg, Pauly, Bloom, Glick, Kinosian, & Schwartz, Avoiding Bias in the Conduct and Reporting of Cost-Effectiveness Research Sponsored by Pharmaceutical Companies, 324 NEW ENG. J. MED. 1362 (1991). It is anticipated that unscrupulous investigators will try to circumvent these stipulations by arranging paid "consultantships" with pharmaceutical companies. To keep the system from being subverted in this fashion, all arrangements between medical school faculty members and private industry in which money changes hands should be subject to review, either by the Institutional Review Board, or by a separate, specifically charged body.



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guished from the indirect costs paid to institutions by the National Institutes of Health or the National Science Foundation.103 First, these indirect cost payments are negotiated with each institution individually, based on strict accounting procedures.104 Second, and more pertinent, these indirect cost payments are made to the institution, rather than to the clinical investigator. This is the arrangement recommended for industry payments to clinical investigators for conducting clinical trials. Rather, these excessive industry payments more closely resemble the outright payment of "finder's fees" discussed in Lind's article. CONCLUSION In conclusion, financial arrangements between industry and clinical investigators, where individual investigators benefit directly from payments far in excess of those required to offset their costs incurred in conducting studies, give the appearance as well as the opportunity for conflict of interest. Further, such arrangements are rarely disclosed to patients, whose decisions whether to participate in a clinical trial might be influenced by their assessment of their physicians' freedom from bias. By requiring disclosure of funding sources in informed consent, and by removing control of the monies generated by enrolling patients in these studies from the individual investigators, the subject's right to selfdetermination will be affirmed, and the probability of conflict of interest on the part of the clinical investigator will be reduced. The usual federal sanctions concerning violation of Institutional Review Board informed consent requirements should remain in place. Further, civil liability rules concerning experimentation should be altered, in those jurisdictions where the law has not yet matured to this point, to make it easier to obtain damages for nondisclosure of the investigator's conflict of interest. Specifically, wholly subjective, patient-oriented standards of disclosure and of causation should be adopted. 103


Brown, Indirect Costs of Federally Supported Research, 2 1 2 SCIENCE 411 (1981); Cooper, The Indirect Costs of Sponsored Research, 65 A C A D . M E D . 995 (1990). Recent revelations about the misuse of indirect cost dollars indicates that there may b e more similarity between these payments and excess industry payments than initially meets the eye. Palca, Indirect Costs: The Gathering Storm, 252 SCIENCE 636 (1991).

Conflict of interest and informed consent in industry-sponsored clinical trials.

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