Some principles require principals: Why banning "conflicts of interest" won't solve incentive problems in biomedical research

Texas Law Review

Volumn 85, Issue 6, 2007, Pages 1413-1463

  Sage, William M ^a  

^a UNIVERSITY OF TEXAS AT AUSTIN   (United States)

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EID: 34547793509     PISSN: 00404411     EISSN: None     Source Type: Journal    
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References (261)

1. This Article focuses on biomedical research using human subjects that is performed by or in collaboration with academic medical centers. Biomedical research has become a large-scale enterprise, implicating many organizational structures, incentives, and interests. Research susceptible to financial influence does not always make use of human subjects, but may involve animal studies, microbial studies, or in vitro bioassays. Some researchers work in universities, others in private industry, and still others in government. The missions and obligations associated with these settings differ, and in the case of academic medical centers, several missions occupy a single setting. A growing amount of human subjects research is also being conducted by "contract research organizations" (CROs), typically for-profit ventures that replicate in the community clinical research activities that traditionally were housed in academic institutions. See, e.g., Ken Gatter, Fixing Cracks: A Disclosure Norm to Repair the Crumbling Regulatory Structure Supporting Clinical Research and Protecting Human Subjects, 73 UMKC L. REV. 581, 618 (2005)
2. (describing CROs as organizations that exist separately from academic institutions that receive federal funding and noting that CROs can operate trials more efficiently and are better able to recruit study participants); Trudo Lemmens, Leopards in the Temple: Restoring Scientific Integrity to the Commercialized Research Scene, 32 J.L. MED. & ETHICS 641, 645 (2004) (explaining that CROs manage a significant number of clinical trials outside of academia at dedicated research centers). Some of this Article's insights apply beyond the clinical academic setting, but a detailed consideration of those environments is beyond this Article's scope. In particular, this Article does not address special issues that may arise in CROs.
3. Sheryl Gay Stolberg, F.D.A. Officials Fault Penn Team in Gene Therapy Death, N.Y. TIMES, Dec. 9, 1999, at A22.
4. Apotex pressured the University of Toronto, to which it had promised a multimillion dollar gift, to demote a hematologist who had published negative findings about its new iron-binding drug. Krista Foss, Grievance Filed in Drug-Research Controversy at U of T: Doctor in Lengthy Battle with Company Over Freedom to Publish Her Negative Findings, GLOBE & MAIL (Toronto), Dec. 18, 1998, at A11.
5. The maker of Synthroid, Boots Pharmaceutical, attempted to suppress the publication of research that it sponsored at the University of California, San Francisco, which failed to show its product to be advantageous. See Drummond Rennie, Thyroid Storm, 277 JAMA 1238, 1238-39 (1997);
6. see also In re Synthroid Mktg. Litig., 264 F.3d 712, 714 (7th Cir. 2001) (discussing the publication of a study concluding that Synthroid and generic levothyroxine are interchangeable).
7. Barry Meier, Contracts Keep Drug Research Out of Reach, N.Y. TIMES, Nov. 29, 2004, at A1.
8. David Armstrong, Delicate Operation: How a Famed Hospital Invests in Device It Uses and Promotes, WALL ST. J., Dec. 12, 2005, at A1. The Cleveland Clinic was criticized in 2005 for its relationship with AtriCure, the manufacturer of radiofrequency ablation equipment used to treat atrial fibrillation. A venture capital fund established by the Clinic had invested substantially in AtriCure, as had the Clinic's physician-CEO, who helped manage the fund, sat on AtriCure's board of directors, and developed and retained a royalty interest in a device AtriCure was marketing. Another Clinic physician, who treated patients with the device and reviewed it favorably in professional publications, was a paid consultant to the company, though his payments were disclosed to the journals involved. The Clinic's Institutional Review Board (IRB) learned of the financial relationships and brought them to the attention of the Clinic's conflicts of interest committee. The IRB required the Clinic to disclose the financial relationships to research subjects in the clinical trials. The conflicts committee recommended, but could not require, disclosure to patients receiving the device outside of the research protocols. Id.
9. Financial Relationships and Interests in Research Involving Human Subjects: Guidance for Human Subject Protection, 69 Fed. Reg. 26,393, 26,396 (May 12, 2004), available at http://www.hhs.gov/ohrp/humansubjects/ finreltn/finalguid.pdf.
10. A capitated payment is a fixed monthly fee for each patient assigned to the care of an HMO physician, regardless of whether or how often the patient seeks treatment from that physician. See Jerome P. Kassirer, Managing Care - Should We Adopt a New Ethic?, 339 NEW ENG. J. MED. 397, 397 (1998)
11. (arguing that a population-based ethic for the provision of health care - "intentionally providing minimally acceptable care to some for the benefit of others" - is wrong). But see Richard D. Lamm, Rationing of Health Care: Inevitable and Desirable, 140 U. PA. L. REV. 1511, 1513, 1515 (1992) (arguing that "[p]ublic spending on health care should attempt to maximize the nation's health," and asking what standard of care should be provided to individuals in order to achieve that maximization).
12. See Lawrence Casalino, Managing Uncertainty: Intermediate Organizations as Triple Agents, 26 J. HEALTH POL. POL'Y & L. 1055, 1055 (2001) (noting that entities such as HMOs are questionable in their service of patients' interests).
13. See, e.g., Alexander M. Capron, Containing Health Care Costs: Ethical and Legal Implications of Changes in the Methods of Paying Physicians, 36 CASE W. RES. L. REV. 708, 709, 748-50 (1986)
14. (describing the unfamiliar ethical territory presented by a regime in which providing more care diminishes - rather than increases - health care providers' profits). DRGs converted a direct relationship between hospital and physician payment into an inverse one, in that a patient who required prolonged care continued to generate physician fees but eroded the fixed amount available to the hospital. Recognizing the danger to medical ethics, Congress enacted a law prohibiting hospitals (and the few HMOs then serving the elderly) from making incentive payments to physicians to induce them to limit services to Medicare or Medicaid beneficiaries. Omnibus Budget Reconciliation Act of 1986, Pub. L. No. 99-509, § 9313(c), 100 Stat. 1874, 2003 (codified as amended at 42 U.S.C. 1320a-7a (2000)).
15. When Medicare and state Medicaid programs expanded their managed care contracting to serve a larger percentage of program beneficiaries, the prohibition on physician incentive plans in prepaid health plans was converted into a mix of substantive and disclosure-based regulation. Omnibus Budget Reconciliation Act of 1990, Pub. L. No. 101-508, §§ 4204(a), 4731, 104 Stat. 1388, 1388-108 to -109, 1388-195 (codified as amended in scattered sections of 42 U.S.C);
16. see also Final Rule, Requirements for Physician Incentive Plans in Prepaid Health Care Organizations, Requirements for Physician Incentive Plans, 42 C.F.R. § 417.479 (2007).
17. Principal-agent problems are a common concern in corporate law because of the separation of corporate ownership (by small shareholders and, to a degree, creditors) from corporate control (by large shareholders and executives). Henry Hansmann & Reinier Kraakman, Agency Problems and Legal Strategies, in THE ANATOMY OF CORPORATE LAW: A COMPARATIVE AND FUNCTIONAL APPROACH 21, 21 (Reinier Kraakman ed., 2004).
18. Professors Hansmann and Kraakman divide legal strategies to reduce agency problems into regulatory strategies and governance strategies, each of which can operate either before a breach of trust or afterwards. Id. at 23.
19. Regulatory strategies include rule- or standard-based constraints on the agent, and requirements related to affiliation (e.g., disclosure before entry and opportunity for exit on fair terms). Id. at 23-24.
20. Governance strategies include appointment rights (selection or removal of agents), decision rights (initiating or ratifying management decisions), and agent incentives (pay for performance or formal trusteeship obligations). Id. at 26-27.
21. Laura S. Underkuffler, Captured by Evil: The Idea of Corruption in Law (Duke Law Sch. Legal Studies Research Series, Research Paper No. 83, 2005), available at http://ssm.com/abstract=820249.
22. W. Bradley Wendel, The Deep Structure of Conflicts of Interest, 16 GEO. J. LEGAL ETHICS 473, 477 (2003) (book review).
23. Steven Brint distinguishes "social trustee" professionals from "expert knowledge" professionals, and asserts a trend in favor of the latter, who tend to provide sophisticated services to paying clients. STEVEN BRINT, IN AN AGE OF EXPERTS: THE CHANGING ROLE OF PROFESSIONALS IN POLITICS AND PUBLIC LIFE 7-8 (1994).
24. Several muckraking exposés have been published recently detailing the pernicious influence of commercialism in the medical and scientific enterprises. See, e.g., SHELDON KRIMSKY, SCIENCE IN THE PRIVATE INTEREST: HAS THE LURE OF PROFITS CORRUPTED BIOMEDICAL RESEARCH? 27-56 (2003) (criticizing university-business connections, particularly those involving patented technologies).
25. Troyen A. Brennan et al., Health Industry Practices that Create Conflicts of Interest, 295 JAMA 429, 429 (2006).
26. Id.
27. Id. at 430 (emphases added).
28. See David Blumenthal et al., Withholding Research Results in Academic Life Science: Evidence from a National Survey of Faculty, 277 JAMA 1224, 1224, 1226 (1997)
29. (mentioning that 19.8% of academic researchers reported having delayed publication of findings for more than six months at the request of a sponsor). In a notorious example, Boots Pharmaceuticals blocked for several years findings of researchers at U.C. San Francisco that its branded synthetic thyroid hormone, Synthroid, was no more effective than much cheaper generic products. Rennie, supra note 4, at 1238-39;
30. Lawrence K. Altman, Drug Firm, Relenting, Allows Unflattering Study to Appear, N.Y. TIMES, Apr. 16, 1997, at A1,
31. To read the study, see Betty J. Dong et al., Bioequivalence of Generic and Brand-Name Levothyroxine Products in the Treatment of Hypothyroidism, 277 JAMA 1205 (1997).
32. See Justin E. Bekelman et al., Scope and Impact of Financial Conflicts of Interest in Biomedical Research: A Systematic Review, 289 JAMA 454, 464 (2003) (noting that as a first step in dealing with conflicts of interest, all researchers and sponsors should fully disclose the nature of their relationships and all results of clinical trials should be made readily available in a publicly accessible forum).
33. Currently, applicants conducting clinical trials under an investigational new drug (IND) application must submit certain information about the trial to the FDA, if the trial is for a drug to treat a serious or life-threatening disease or condition and it is a trial to test effectiveness. See Food and Drug Administration Modernization Act of 1997 § 113, 42 U.S.C. 282(j)(3)(A) (2000). The information is held in a data bank that can be accessed at http://www.clinicaltrials.gov.
34. See, e.g., The Journal of the Am. Med. Ass'n Information for Authors and Reviewers, Clinical Trial Registration, http://jama.ama-assn.org/ misc/authors.dtl#clinicaltrial.
35. For example, the Food and Drug Administration regulates financial relationships between applicants seeking to market new drugs and medical devices and clinical investigators conducting studies of those drugs or devices. 21 C.F.R. § 54.1(a) (2005). Applicants must submit a list of clinical investigators, identify those who are employees of the study sponsor (funder), disclose financial relationships with non-employee investigators, or certify the absence of those relationships. Id. § 54.4. Relationships that must be disclosed include compensation affected by the outcome of clinical studies, significant equity interests in the study sponsor, proprietary interests in the tested product, or other payments exceeding $25,000. Id. §§ 54.3(f), 54.4(a)(3)(i)-(iv). Following such disclosure, the FDA may take various actions to ensure the reliability of the data being submitted by the applicant, such as data audits, requests for additional analysis, requests for additional independent studies, and disqualifying particular studies from consideration in connection with approval. Id. § 54.5(c)(1)-(4).
36. This discussion connects to a rich literature on the role of science in society that is beyond the scope of this Article. See generally GEORGE H. DANIELS, SCIENCE IN AMERICAN SOCIETY: A SOCIAL HISTORY (1971).
37. A comprehensive regulatory approach to human subjects research would require greater social consensus than currently exists as to the relationship among democratic government, individual freedom of inquiry, and communal interests in the development and dissemination of knowledge. The ongoing controversy over government funding for stem cell research has surfaced a new generation of commentators on these topics. See, e.g., DAVID H. GUSTON, BETWEEN POLITICS AND SCIENCE: ASSURING THE INTEGRITY AND PRODUCTIVITY OF RESEARCH (2000); CHRIS MOONEY, THE REPUBLICAN WAR ON SCIENCE: REFLECTIONS OF A SCIENCE JOURNALIST AT WORK (2005);
38. Mark B. Brown & David H. Guston, A Democratic Theory of Science: The Right to Research 3 (June 24, 2005) (unpublished manuscript), available at http://www.cspo.org/ourlibrary/documents/right_to_research.pdf (arguing for a democracy- or society-based right of inquiry).
39. Dennis F. Thompson, Understanding Financial Conflicts of Interest, 329 NEW ENG. J. MED. 573, 573 (1993).
40. There are other definitions available to the biomedical community that emphasize social over individual responsibility. See, e.g., HOWARD BRODY, HOOKED: HOW MEDICINE'S DEPENDENCE ON THE PHARMACEUTICAL INDUSTRY UNDERMINES PROFESSIONAL ETHICS (2007) (arguing that influences that reduce public trust in the social role of physicians or researchers constitute conflicts of interest);
41. see also Edmund L. Erde, Conflicts of Interest in Medicine: A Philosophical and Ethical Morphology, in CONFLICTS OF INTEREST IN CLINICAL PRACTICE AND RESEARCH 12, 12-41 (Roy G. Spece et al. eds., 1996) (arguing that trust in a social role is the trigger for conflicts of interest).
42. See Marcia Angell, Is Academic Medicine for Sale?, 342 NEW ENG. J. MED. 1516, 1518 (2000) (arguing for segregation of functions);
43. John La Puma, Physicians' Conflicts of Interest in Post-Marketing Research: What the Public Should Know, and Why Industry Should Tell Them, in THE ETHICS OF RESEARCH INVOLVING HUMAN SUBJECTS: FACING THE 21ST CENTURY 203, 206 (Harold Y. Vanderpool ed., 1996) (arguing for greater disclosure requirements);
44. Frances H. Miller, Trusting Doctors: Tricky Business When It Comes to Clinical Research, 81 B.U. L. REV. 423, 443 (2001) (arguing for greater disclosure requirements).
45. See, e.g., VANDERBILT UNIV., CONFLICT OF INTEREST POLICY 1, 3-4, available at http://www.vanderbilt.edu/compliance/html/conflict_of_interest_policy.pdf (explaining that the conflict of interest policy must be followed to promote the "core values" and "best interests" of the university and including both misappropriation and research conflicts).
46. See, e.g., Eric G. Campbell et al., A National Survey of Physician-Industry Relationships, 356 NEW ENG. J. MED. 1742 (2007) (noting that 94% of physicians surveyed reported some relationship with the pharmaceutical industry, and 28% received payments for consulting, lecturing, or enrolling patients in research trials);
47. Robert Pear, Drug Makers Battle a U.S. Plan to Curb Rewards for Doctors, N.Y. TIMES, Dec. 26, 2002, at A1, A28 (describing the pressure on doctors to shift Medicaid patients from generic to name-brand prescriptions, even though the name-brand medicines are often less effective).
48. See ETHICAL ISSUES IN THE MANAGEMENT OF FINANCIAL CONFLICTS OF INTEREST IN BIOMEDICAL RESEARCH (Thomas H. Murray & Josephine Johnston eds., forthcoming 2007).
49. The Belmont Report emphasizes beneficence in research, which would prohibit "brutal or inhumane treatment" regardless of consent. THE NAT'L COMM'N FOR THE PROTECTION OF HUMAN SUBJECTS OF BIOMED. & BEHAV. RES., U.S. DEP'T OF HEALTH, EDUC. & WELFARE, THE BELMONT REPORT: ETHICAL PRINCIPALS & GUIDELINES FOR THE PROTECTION OF HUMAN SUBJECTS OF RESEARCH 17 (1978). This echoes the Nuremberg Code's prohibition on experimentation where there is an expectation of possible death or disabling injury. Nuremberg Code, in 2 TRIALS OF WAR CRIMINALS BEFORE THE NUREMBERG MILITARY TRIBUNALS UNDER CONTROL COUNCIL LAW, No. 10, at 182 (1949), available at http://www.ushmm.org/research/doctors/Nuremberg_Code.htm. The Nuremberg Code suggested that physicians themselves might ethically serve as subjects in particularly dangerous research, reflecting not only their superior knowledge of the risks but also their special duty to society. Id.
50. See generally DANIELS, supra note 24 (generally discussing the role of science in society);
51. Shannon Benbow, Conflict + Interest: Financial Incentives and Informed Consent in Human Subject Research, 17 NOTRE DAME J.L. ETHICS & PUB. POL'Y 181, 185-210 (2003) (documenting the evolution of the informed consent doctrine in the context of human subject research).
52. See generally Benbow, supra note 31.
53. See, e.g., Gordon DuVal, Institutional Conflicts of Interest: Protecting Human Subjects, Scientific Integrity, and Institutional Accountability, 32 J.L. MED. & ETHICS 613, 614-15 (2004).
54. Nuremberg Code, supra note 30, at 181-82.
55. See George J. Annas, Mengele's Birthmark: The Nuremberg Code in United States Courts, 7 J. CONTEMP. HEALTH L. & POL'Y 17, 42-45 (1991) (noting that the Nuremberg Code was not taken seriously in the United States).
56. Paul S. Applebaum, Clarifying the Ethics of Clinical Research: A Path Toward Avoiding the Therapeutic Misconception, AM. J. BIOETHICS, Spring 2002, at 22, 23 (discussing the substantial prevalence of "therapeutic misconception").
57. See, e.g., Lainie Friedman Ross, Payment in Pediatric Research, 9 MICH. ST. J. MED. & LAW 1, 1-2 (2005) (presenting risks objectively and stating that, ideally, research subjects would "share in, support, and be motivated by the goals of the researchers");
58. Richard S. Saver, Medical Research and Intangible Harm, 74 U. CLN. L. REV. 941, 1009 (2006) (concluding that "ensuring that both negative and positive results are shared more openly may also help counter therapeutic misconception problems and the common overestimation about research's direct benefits").
59. SEE, E.G., MARSHA GARRISON & CARL E. SCHNEIDER, THE LAW OF BIOETHICS: INDIVIDUAL AUTONOMY AND SOCIAL REGULATION (2003).
60. See, e.g., Norman G. Levinsky, Nonfinancial Conflicts of Interest in Research, 347 NEW ENG. J. MED. 759 (2002).
61. See, e.g., Roger S. Foster, Jr., Conflicts of Interest: Recognition, Disclosure, and Management, 196 J. AM. C. SURGEONS 505, 509 (2003).
62. Professor DuVal sums it up reasonably as follows: "Neither financial nor non-financial interests are illegitimate in themselves and indeed the pursuit of such rewards may encourage greater production and discovery. However, all of these interests may also have the effect of skewing the proper exercise of judgment." DuVal, supra note 33, at 614-15. The unanswered questions are what constitutes "proper exercise of judgment" and what legal tools are appropriate to reinforce that judgment.
63. Performance-based compensation is routinely used in business to align managers' incentives behavior with the interests of shareholders-the corporation's owners, for whom management acts as agent. Experience has been mixed. Managers no longer can enrich themselves out of the public view for extended periods of time, but opportunities have arisen for them to exploit small swings in share price for personal gain in ways that do not benefit and may significantly harm the corporation's long-term interest. See generally LUCIAN BEBCHUK & JESSE FRIED, PAY WITHOUT PERFORMANCE (2004).
64. The "pay-for-performance" movement emerging in U.S. health care as an alternative to both traditional fee-for-service payment and managed care capitation will eventually face similar tensions. See generally William M. Sage, Pay-for-Performance: Will It Work in Theory?, 3 IND. HEALTH L. REV. 305 (2006).
65. See Leah Belsky & Ezekiel J. Emanuel, Conflicts of Interest and Preserving the Objectivity of Scientific Research, HEALTH AFF., Jan.-Feb. 2004, at 268, 270 (book review) ("[T]he distinterested nature of federal support for research seems to be becoming a historical relic. Increasingly, the government itself is acting much like industry, interested in having more influence over what is being researched and the precise nature of the outcomes.").
66. See generally SHELDON KRIMSKY, SCIENCE IN THE PRIVATE INTEREST 230 (2003) ("By accepting the premise that conflicts of interest in universities must be subtly managed, rather than prohibited or prevented, nothing less than the public interest function of the American academic enterprise is at stake.").
67. See, e.g., Mark Barnes & Patrik S. Florencio, Investigator, IRB and Institutional Financial Conflicts of Interest in Human-Subjects Research: Past, Present, and Future, 32 SETON HALL L. REV. 525, 526, 560-61 (2002).
68. See, e.g., Jeffrey M. Drazen & Gregory D. Curfman, Financial Association of Authors, 346 NEW ENG. J. MED. 1901, 1901 (2002) ('"[T]he Journal expects that authors of such articles will not have any financial interest in a company (or its competitor) that makes a product discussed in the article.'").
69. E.g., The New England Journal of Medicine, Standard Disclosure Form, http://authors.nejm.org/Misc/disclosOA.pdf (requiring that potential authors disclose any past or pending receipt of consulting fees, paid advisory boards, equity ownership, commercial lecture fees, industry grant support, patents, royalties, or expert witness service in connection with their articles).
70. See Robert F. Weir, The Process of Editorial Review, in PUBLISHING WITHOUT PERISHING: A HANDBOOK FOR GRADUATE AND PROFESSIONAL STUDENTS ON PUBLISHING IN BIOETHICS AND THE MEDICAL HUMANITIES 7, 8 (Carolyn Ells & Tatjana Hugle eds., 1997), available at http://www.asbh.org/publications/pdfs/pubhandbk.pdf (indicating that, with a few exceptions, "most mainstream journals [do not] pay authors for their papers").
71. Chen Sampson, More Medical Schools, Hospitals Ban Meals, Gifts from Pharmaceutical Companies, Kaisernetwork.org (Jan. 22, 2007), http://www.kaisernetwork.org/Daily_reports/rep_index.cfm?DR_ID=42395.
72. Shortly before I entered Stanford Medical School in 1982, for example, the students had decided collectively not to accept free stethoscopes from pharmaceutical companies.
73. Angell, supra note 26, at 1517-18.
74. University-industry relationships in the life sciences are common. Most involve short-term agreements in small dollar amounts. Some relationships, however, are substantial, such as the agreement between the Massachusetts General Hospital and Hoechst A.G. to fund a new department of genetics and build a research building. Eric G. Campbell et al., Inside the Triple Helix: Technology Transfer and Commercialization in the Life Sciences, 23 HEALTH AFF., Jan.-Feb. 2004, at 64, 66-67.
75. 35 U.S.C. §§ 200-12 (2000). The Bayh-Dole Act uses patenting by government-supported academic institutions and the grant of exclusive licenses to industry as its principal strategy to accomplish technology transfer and promote the development of practical applications. See generally Rebecca S. Eisenberg, Public Research and Private Development: Patents and Technology Transfer in Government-Sponsored Research, 82 VA. L. REV. 1663, 1691-95 (1996)
76. (tracing the history of the Bayh-Dole Act and its attempts to "facilitate [universities'] efforts to transfer technology to industry"). This strategy has critics. In addition to issues of potential research bias, concerns are sometimes raised about (1) government withdrawing public funding in reliance on industry support that is far smaller and less reliable, (2) high prices being charged for essential therapies originally developed with public funds, (3) innovation bottlenecks created by patents on research tools, and (4) lack of coordinated data collection to evaluate long-term effects. See, e.g., Peter S. Arno & Michael H. Davis, Why Don't We Enforce Existing Drug Price Controls? The Unrecognized and Unenforced Reasonable Pricing Requirements Imposed upon Patents Deriving in Whole or in Part from Federally Funded Research, 75 TUL. L. REV. 631, 684-91 (2001) (criticizing high prices of drugs initially developed with federal research dollars);
77. Campbell et al., supra note 52, at 70-74 (questioning both Bayh-Dole's efficacy in providing universities sufficient revenue and the lack of data necessary to evaluate technology transfer);
78. Michael A. Heller & Rebecca S. Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 SCIENCE 698, 698 (1998) (arguing that patenting of basic technologies retards innovation by inefficiently segmenting ownership).
79. For an explanation and discussion of the "role morality" of lawyers, see PAUL G. HASKELL, WHY LAWYERS BEHAVE AS THEY DO 35-38 (1998).
80. See also MODEL RULES OF PROF'L CONDUCT R. 1.7 (2005) [hereinafter MODEL RULES] (forbidding representation of clients with "directly adverse" interests);
81. id. at R. 1.9 (forbidding representation of clients with interests in conflict with a lawyer's past clients);
82. id. at R. 1.8 (addressing other specific conflicts of interests).
83. MODEL RULES, supra note 54, at R. 1.3 cmt. 1 ("A lawyer must also act with commitment and dedication to the interests of the client and with zeal in advocacy upon the client's behalf.");
84. MODEL CODE OF PROF'L RESPONSIBILITY Canon 7 (1980) [hereinafter MODEL CODE] ("A Lawyer Should Represent a Client Zealously Within the Bounds of the Law.").
85. MODEL RULES, supra note 54, at R. 1.6(a).
86. Id at R. 1.8.
87. See, e.g., JAMES E. MOLITERNO, ETHICS OF THE LAWYER'S WORK 206 (2d ed. 2003) ("Conflicts of interest come in at least three varieties: third party interference, lawyer interests that interfere with client interests, and interests of multiple clients that conflict with one another.").
88. See MODEL RULES, supra note 54, at R. 1.7 (current clients);
89. id. at R. 1.9 (former clients).
90. See, e.g., John S. Dzienkowski & Robert J. Peroni, The Decline in Lawyer Independence: Lawyer Equity Investments in Clients, 81 TEXAS L. REV. 405, 497-545 (2002) (proposing new ways of thinking about equity investments in light of Model Rule 1.8(a));
91. Richard A. Epstein, The Legal Regulation of Lawyers' Conflicts of Interest, 60 FORDHAM L. REV. 579, 584-87 (1992) (discussing regulation of institutional conflicts of interest);
92. Charles Silver & Lynn A. Baker, Mass Lawsuits and the Aggregate Settlement Rule, 32 WAKE FOREST L. REV. 733 (1997) (critiquing Model Rule 1.8(g), the so-called "aggregate settlement rule," which is designed to guard against the risks of common representation of multiple clients by a single lawyer).
93. See, e.g., Patricia Werhane & Jeffrey Doering, Conflicts of Interest and Conflicts of Commitment, in RESEARCH ETHICS: A READER 165 (Deni Elliott & Judy E. Stern eds., 1997) (discussing conflicts of commitment for scientific researchers);
94. Ass'n of Am. Med. Cs., Guidelines for Dealing with Faculty Conflicts of Commitment and Conflicts of Interest in Research, 65 ACAD. MED. 487, 491-92 (1990) (same);
95. see also Carol A. Needham, The Professional Responsibilities of Law Professors, 56 J. LEGAL ED. 106, 115-21 (2006) (discussing conflicts of commitment for academic researchers generally).
96. See, e.g., MODEL RULES, supra note 54, at R. 1.8(a) (prohibiting lawyers from engaging in transactions with current clients in which the lawyer has an interest);
97. MODEL CODE, supra note 55, at DR 5-101(A) (prohibiting self-dealing for monetary or personal gain);
98. DOUGLAS E. ROSENTHAL, LAWYER AND CLIENT: WHO'S IN CHARGE? 96-112 (1974);
99. William L.F. Felstiner & Austin Sarat, Enactments of Power: Negotiating Reality and Responsibility in Lawyer-Client Interactions, 77 CORNELL L. REV. 1447, 1459-72 (1992) (discussing techniques lawyers use to seize power in their relationships with clients).
100. See MODEL RULES, supra note 54, at R. 1.8(f) (stating the general rule that "[a] lawyer shall not accept compensation for representing a client from one other than the client").
101. MOLITERNO, supra note 58, at 206.
102. See MODEL RULES, supra note 54, at R. 1.13(a) ("A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.");
103. id. at R. 1.13(f) ("In dealing with an organization's directors, officers, employees, members, shareholders or other constituents, a lawyer shall explain the identity of the client when the lawyer knows or reasonably should know that the organization's interests are adverse to those of the constituents with whom the lawyer is dealing.");
104. Geoffrey C. Hazard, Jr., Triangular Lawyer Relationships: An Exploratory Analysis, 1 GEO. J. LEGAL ETHICS 15, 20 (1987) (describing conflicts of interest that arise if a law firm represents a corporation or organization charged to have been defrauded by an officer of the organization, where the law firm has previously represented that officer with respect those activities);
105. Nancy J. Moore, Expanding Duties of Attorneys to "Non- Clients": Reconceptualizing the Attorney-Client Relationship in Entity Representation and Other Inherently Ambiguous Situations, 45 S.C. L. REV. 659, 663-64 (1994) (noting the conflicts of interest that arise because of difficulties in treating closely held corporations and small partnerships as entities distinct from their individual constituents);
106. Ronald D. Rotunda, Law, Lawyers and Managers, in THE ETHICS OF CORPORATE CONDUCT 127 (Clarence C. Walton ed., 1977) (discussing the ethical obligations of inside and outside corporate counsel).
107. See, e.g., John S. Dzienkowski & Robert J. Peroni, Multidisciplinary Practice and the American Legal Profession: A Market Approach to Regulating the Delivery of Legal Services in the Twenty-First Century, 69 FORDHAM L. REV. 83, 181-91 (2000) (highlighting the problems that multidisciplinary practices would encounter because of differing conflicts of interest rules between disciplines and conflicting professional obligations, and suggesting solutions to those problems).
108. See MODEL RULES, supra note 54, at R. 1.7 cmt. 13 (discussing the potential conflict of interest that arises when a lawyer is paid from a source other than the client);
109. see also Thomas D. Morgan, What Insurance Scholars Should Know About Professional Responsibility, 4 CONN. INS. L.J. 1, 6-9 (1997) (examining the long-standing theoretical dispute over whether a lawyer representing an insured has one client or two).
110. The general rule is that conflicts are imputed to other members of the same firm. See MODEL RULES, supra note 54, at R. 1.8(k) ("While lawyers are associated in a firm, a [conflict of interest] prohibition . . . that applies to any one of them shall apply to all of them.");
111. id. at R. 1.10 ("While lawyers are associated in a firm, none of them shall knowingly represent a client when anyone of them practicing alone would be prohibited from doing so . . . .");
112. MODEL CODE, supra note 55, at DR 5-105(D) ("If a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule, no partner, or associate, or any other lawyer affiliated with him or his firm, may accept or continue such employment.");
113. see also Westinghouse Electric Corp. v. Kerr-McGee Corp., 580 F.2d 1311, 1321-22 (7th Cir. 1978) (extending the rule to encompass the branch offices of a national law firm).
114. See MODEL RULES, supra note 54, at R. 1.10(c) (allowing a client to waive disqualification under the conditions set forth in R. 1.7).
115. See id. at R. 1.7 (precluding client waiver of a disqualification due to a conflict of interest where the representation "involve[s] the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal").
116. This approach is usually called erecting a "Chinese wall," a term that has attracted criticism notwithstanding its purely geopolitical origins. See, e.g., Westinghouse, 580 F.2d at 1321. "Berlin wall" would be more apt, considering that the purpose is to prevent mixing rather than to keep particular undesirables at a distance.
117. See id. (rejecting the "Chinese wall" as a way to avoid imputation).
118. See, e.g., In re Granite Partners, L.P., 219 B.R. 22, 42-44 (Bankr. S.D.N.Y. 1998) (denying $3 million of a law firm's $5.2 million request for fees and expenses because of the firm's failure to disclose a conflict).
119. See Bd. of Educ. of New York v. Nyquist, 590 F.2d 1241, 1246 (2d Cir. 1979) (recognizing that, in some situations, disqualification of counsel may be necessary, but also that such disqualification has the immediate adverse effect on the client of separation from his or her counsel of choice).
120. See MODEL RULES, supra note 54, at R. 8.4(a) (defining a violation of the Rules as "misconduct").
121. See RONALD E. MALLEN & VICTOR B. LEVIT, LEGAL MALPRACTICE § 71 (1977) (setting forth the elements of a legal malpractice claim as duty, breach of duty, proximate causation, and damages).
122. See MODEL RULES, supra note 54, at R. 1.16(a), (b).
123. See MODEL RULES, supra note 54, at R. 3.3 cmt. 2 ("This Rule sets forth the special duties of lawyers as officers of the court to avoid conduct that undermines the integrity of the adjudicative process.").
124. Id. at R. 3.3(a)(2).
125. See, e.g., id. pmbl. (2005) ("A lawyer, as a member of the legal profession, is a representative of clients, an officer of the legal system and a public citizen having special responsibility for the quality of justice."),
126. A recent article notes a puzzle involving lawyers' obligations as "officers of the court." Legal commentators and bar associations have regarded the "officer of the court" designation in the Model Rules of Professional Conduct as hortatory, requiring only compliance with the stated ethical rules of the profession. Judges, on the other hand, routinely take advocates to task for failing in that role, reading independent obligations into the term. See Fred C. Zacharias & Bruce A. Green, Reconceptualizing Advocacy Ethics (San Diego Legal Studies Paper No. 07-15, Oct. 20, 2005), available at http://ssrn.com/abstract=829304. Zacharias and Green interpret this as evidencing an underlying reliance on "professional conscience" in lawyers' ethical codes. An alternative explanation is that, from the perspective of the overall profession, officer of the court responsibilities are regulatory in nature, and therefore inconsistent with the strong form of relational obligation between lawyers and clients that characterizes established legal ethics. From a judge's perspective, by contrast, a lawyer personally handling a case in the judge's courtroom has intense relational obligations to treat the judge properly. A judge also has a much more immediate set of penalties and rewards at her disposal to enforce those obligations than a professional disciplinary process, which lacks even a specific complainant (beyond opposing counsel) in such cases.
127. See, e.g., MOLITERNO, supra note 58, at 259-61 (explaining the practice of contingency fees);
128. MARC I. STEINBERG, LAWYERING AND ETHICS FOR THE BUSINESS ATTORNEY 105 (2002) (noting the basic concerns of lawyers accepting equity interests in their clients). Contingent fee payment (like its historical antecedents, barratry and champerty) is controversial in part because lawyers who stand to benefit hugely from the successful resolution of a claim may pursue the claim using methods that are unethical or dishonest. In these situations, however, the lawyer's incentives are aligned, though perhaps overly so, with those of the client to whom her professional obligation runs. Consequently, limitations or prohibitions on these incentives are articulated as problems of public interest, not conflict of interest. For example, lawyers may not accept contingent fee payment in family law cases, lest third parties such as minor children be harmed, or in criminal cases, lest the public safety be threatened when guilty parties go free. See infra note 83. In cases involving financial crimes, however, defendants assets are often forfeited if they lose, rendering the ability of lawyers to collect fees a de facto function of their success.
129. During the heyday of managed care, a major medical journal offered a system called "fee-for-time" as a supposedly neutral alternative to both fee for service and capitated payment of physicians. See Tom J. Wachtel & Michael D. Stein, Fee-for-Time System: A Conceptual Framework for an Incentive-Neutral Method of Physician Payment, 270 JAMA 1226 (1993). If the authors had asked any lawyer held hostage to billable hours, they quickly would have learned about the perverse incentives created by their proposal.
130. For example, the Model Rules and Model Code prohibit contingent fees in criminal cases and in some family law disputes. MODEL RULES, supra note 54, at R. 1.5(d)(2) (criminal cases);
131. id. at R. 1.5(d)(1) (domestic relations cases);
132. MODEL CODE, supra note 55, at DR 2-106(C) (criminal cases);
133. id. at EC 2-20 (domestic relations cases).
134. See supra text accompanying notes 58-64.
135. A general economic definition of an agent is anyone who makes a decision on behalf of another. The law of agency defines its scope more narrowly, defining an agent as a fiduciary subject to the principal's right of control. RESTATEMENT (SECOND) OF AGENCY §1 (1958)
136. See 42 U.S.C. 289(a) (2000) (imposing guidelines for all human subjects research conducted at an entity that applies for a grant, contract, or cooperative agreement for government funds)
137. RESTATEMENT (SECOND) OF AGENCY § 381 (1958).
138. See 45 C.F.R. § 46.116(a) (2005) (setting forth disclosure requirements for obtaining informed consent of research subjects).
139. RESTATEMENT (SECOND) OF AGENCY §§ 14, 18 Cmt. a (1958).
140. See, e.g., Belsky & Emanuel, supra note 43; Brian G. Schuster, VA Continues to Play Key Role in PTSD Research, VA RES. CURRENTS (Dep't of Veterans Affairs, Baltimore, MD), Feb. 2005, at 1, 3, available at http://www.research.va.gov/resources/pubs/ docs/va_research_currents_february_05.pdf (explaining that VA research and funding has "played a major role in the expansion of our understanding of [posttraumatic stress disorder]").
141. See Neal Dickert et al., Paying Research Subjects: An Analysis of Current Policies, ANNALS INTERNAL MED. 368, 368 (2002) (noting that paying research subjects is a "common and long-standing practice").
142. See infra notes 144-46 and accompanying text.
143. See supra notes 36-37 and accompanying text.94. Franklin Miller criticizes bioethicists and policymakers for conflating the ethics of clinical research with the ethics of clinical medicine. Franklin G. Miller, Research Ethics and Misguided Moral Intuition, 32 J.L. MED. & ETHICS 111 (2004).
144. He notes the curiosity that foundational documents in research ethics such as the Declaration of Helskinki assume that researchers must act with "therapeutic beneficence" toward human subjects. Id. at 111.
145. Miller points out that recent conceptions of research ethics minimize direct benefit to the subject as the basis for participation, stressing instead altruistic desire to help future sufferers among the general public, or within susceptible subgroups in whose wellbeing the participant has at most an indirect interest. Id. at 114.
146. Participants may accept the risk of harm to further these nonpersonal goals, and researchers may ethically subject them to such risk in most circumstances. Id.
147. Accordingly, Miller does not consider research practices such as performing sham surgery on a control group or using a psychotropic agent to provoke symptoms for the purpose of testing a new treatment inherently unethical, even though they depart from therapeutic norms. Instead, he concentrates his ethical analysis on whether the practices "are necessary to answer valuable scientific questions and whether the knowledge gained by the research can justify the risks." Id. at 113.
148. Peter A. Clark, Placebo Surgery for Parkinson's Disease: Do the Benefits Outweigh the Risks?, 30 J.L. MED. & ETHICS 58, 61-62 (2002) (explaining the potential "therapeutic misconception" that research "promises beneficial treatment," which "could be viewed as a form of undue influence").
149. Miller puts the point well: "to argue that investigators do not have the same therapeutic obligations to patients in the context of clinical research as in medical care does not imply that they have no obligation to protect research participants from harm and exploitation." Miller, supra note 94, at 114.
150. This is a regulatory and self-regulatory matter, but not one suited to conflicts of interest analysis.Commercialization of medical research also raises issues regarding the rights, if any, that patients and families who participate in studies, contribute tissue samples, or otherwise devote time and resources retain in patentable products that result. The trend appears to be to uphold private contractual arrangements but not otherwise to consider researchers to be financial agents of research subjects. See Moore v. Regents of the Univ. of Cal., 793 P.2d 479, 483, 493-97 (Cal. 1990) (requiring informed consent but refusing to grant property rights in tissue donated by a leukemia patient);
151. Mary R. Anderlik & Mark A. Rothstein, Currents in Contemporary Ethics, 31 J.S. MED. & ETHICS 450, 451-52 (2003) (describing an order in litigation denying fiduciary and informed consent claims relating to patenting by researcher of genetic test for Canavan disease).
152. See Kassirer, supra note 8 (summarizing and commenting on debate in the medical community about whether it would be ethical and otherwise desirable to move toward a system of population-based care).
153. Regulated industries in which firms employ licensed professionals are difficult to analyze in relational terms, especially if the organizations themselves lack institutional principal-agent duties to individual customers. In the Martha Stewart case, for example, the Merrill Lynch broker who passed along information about another client's trading may have been acting in the best interests of his employer by keeping a famous and important customer happy. Donald C. Langevoort, Reflections on Scienter (and the Securities Fraud Case Against Martha Stewart that Never Happened) 18 (Georgetown Law and Econ. Research Paper No. 808104, Dec. 2, 2005), available at http://ssrn.com/abstract=808104.
154. Recent efforts to regulate securities analysts, who are employees of large brokerage firms, highlight relational-regulatory challenges. One recent article considers analysts both actual agents of their corporate employers and "quasi-agents" of the public, and therefore assigns them an independent duty of "reliability." Jill E. Fisch & Hillary A. Sale, The Securities Analyst as Agent: Rethinking the Regulation of Analysts, 88 IOWA L. REV. 1035, 1039-40 (2003).
155. See David Korn, Reengineering Academic Medical Centers: Reengineering Academic Values?, 71 ACAD. MED. 1033 (1996) (discussing the impact of the different goals and functions of academic medical centers on the centers themselves and the industry as a whole).
156. For a comprehensive, balanced discussion of institutional conflicts of interest, see DuVal, supra note 33. As the title - Institutional Conflicts of Interest: Protecting Human Subjects, Scientific Integrity, and Institutional Accountability-conveys, DuVal considers a range of primary obligations, with both relational and regulatory connotations.
157. See, e.g., Brennan et al., supra note 16, at 431-32.
158. TASK FORCE ON FIN. CONFLICTS OF INTEREST IN CLINICAL RESEARCH, ASS'N OF AM. MED. COLLS., PROTECTING SUBJECTS, PRESERVING TRUST, PROMOTING PROGRESS II 2-3 (2002).
159. See DuVal, supra note 33, at 621-23.
160. See, e.g., Sarbanes-Oxley Act of 2002 § 201, 15 U.S.C. § 78j-1(g) (Supp. II 2003) (prohibiting public auditors from offering other services to audit clients rather than allowing internal "walls").
161. According to the required employee compliance training materials at the University of Texas at Austin, "Faculty are encouraged to accept paid outside consulting and professional opportunities." The University of Texas at Austin, General Compliance Training Program, http://www.utexas.edu/ administration/oic/cts/cwl26e/alt/page4.htm.
162. Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191, §§ 1173, 1179, 110 Stat. 1936, 2024-26, 2030-32 (codified as amended in scattered sections of 26, 29, and 42 U.S.C).
163. 15 U.S.C. § 78j-1 (Supp. II 2003); see also Thomas G. Bost, Corporate Lawyers After the Big Quake: The Conceptual Fault Line in the Professional Duty of Confidentiality, 19 GEO. J. LEG. ETHICS 1089, 1090 (2006) (detailing disclosure requirements for attorneys under Sarbanes-Oxley);
164. Stephen J. Choi, A Framework for the Regulation of Securities Market Intermediaries, 1 BERKELEY BUS. L.J. 45, 63 (2004) (discussing prohibitions on auditors from receiving consulting income).
165. The fact that government health agencies use expert advisors from the private sector to inform their decisions raises a legitimate issue of conflicts of interest with respect to individuals who serve on advisory committees to government. Current law allows government latitude to balance its need for expert advice against potential conflict of interest, and to grant general or specific waivers with varying degrees of public disclosure. See 18 U.S.C. § 208(b)(1), (b)(3) (2000); 21 U.S.C. § 355(n)(4) (2000); 5 C.F.R. 2640.301-.302 (2006);
166. see also, e.g., U.S. FOOD & DRUG ADMIN., U.S. DEP'T OF HEALTH & HUMAN SERVS., FDA GUIDANCE ON CONFLICT OF INTEREST FOR ADVISORY COMMITTEE MEMBERS, CONSULTANTS AND EXPERTS (2000), http://www.fda.gov/oc/ advisory/conflictofinteres/guidance.html.
167. In February 2005, FDA issued a general waiver of conflict of interest rules to a joint meeting of its Arthritis Advisory Committee and Drug Safety and Risk Management Advisory Committee, which voted narrowly to allow highly profitable cyclooxygenase-2 inhibitors to remain on the market. Ctr. for Drug Evaluation & Research, U.S. Dep't of Health & Human Servs., Transcript of Joint Meeting of the Arthritis Advisory Committee and the Drug Safety and Risk Management Advisory Committee, http://www.fda.gov/ohrms/dockets/AC/05/ transcripts/2005-4090Tl.htm. It was eventually disclosed that ten of the committee's thirty members had financial ties to the drugs' manufacturers, and that their votes changed the outcome of the deliberations. Robert Steinbrook, Financial Conflicts of Interest and the Food and Drug Administration's Advisory Committees, 353 NEW ENG. J. MED. 116, 116 (2005). The law was subsequently amended to prohibit advisory committee participation under similar circumstances. Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act of 2006, Pub. L. No. 109-97, § 795, 119 Stat. 2120, 2164.
168. See Pegram v. Herdrich, 530 U.S. 211, 235 (2000) (confirming that a fiduciary must act with "an eye single" in the interests of beneficiaries).
169. Initial concern among bioethicists about the generally corrupting influence of commercialization in research resulted in payments to patients being treated on a par with payments to their treating physicians. The federal "Common Rule," for example, states that investigators shall seek informed consent under circumstances "that minimize the possibility of coercion or undue inducement." 45 C.F.R. § 46.116 (2005). Although both constitute recruitment incentives, only payments to physicians create a conflict of interest. Recent commentary uses improved risk disclosure and direct risk regulation to protect research subjects, and does not assign independent significance to whether they receive money for participating. See, e.g., WILLIAM M. SAGE, PAYING RESEARCH SUBJECTS: THE U.S. EXAMPLE (forthcoming 2007);
170. Ezekiel J. Emanuel, Ending Concerns About Undue Inducement, 32 J.L. MED. & ETHICS 100 (2004).
171. An analogy in the medical treatment context is legal restrictions on "self-referral" of patients for services in which the referring physician has a financial interest. Laws prohibiting self-referral are primarily intended to reduce government health insurance payments and avoid social waste, rather than to keep doctors loyal to patients in a strict relational sense. Among the important empirical questions are whether patients get better or worse quality care in physician-owned facilities, whether costs are higher, and whether physician ownership of referral facilities improves patient access to services in particular communities.
172. See generally Richard H. McAdams & Eric B. Rasmusen, Norms in Law and Economics 26-37 (Mar. 29, 2005) (unpublished manuscript), available at http://www.rasmusen.org/papers/norms.pdf (surveying the role and shortcomings of norms as guides to behavior).
173. See John C. Coffee, Jr., Gatekeeper Failure and Reform: The Challenge of Fashioning Relevant Reforms, 84 B.U. L. REV. 301 (2004) (discussing auditors, securities analysts, and others as regulated gatekeepers in corporate and securities law);
174. Ronald J. Gilson & Reinier H. Kraakman, The Mechanisms of Market Efficiency, 70 VA. L. REV. 549, 618-21 (1984) (proposing investment bankers as reputational "gatekeepers" for securities offerings).
175. See, e.g., Nichols Wade, University Panel Faults Cloning Co-Author, N.Y. TIMES, Feb. 11, 2006 (discussing the efforts of a panel formed by the University of Pittsburgh to investigate a researcher's failure to verify data - which his co-author falsified - as well as improper commingling of interests between the researchers).
176. Brennan et. al., supra note 16, at 431-32.
177. Id. at 430.
178. Greg Koski, Research, Regulations, and Responsibility: Confronting the Compliance Myth - A Reaction to Professor Gatter, 52 EMORY L.J. 403, 411 (2003).
179. Accordingly, Koski views the prompt issuance of guidelines on conflicts of interest by the Association of American Medical Colleges, the Association of American Universities, and a host of other professional organizations following the threat of direct regulation of conflicts of interest by HHS as a positive sign. Id. at 413-15.
180. As Brennan and colleagues observe, "AMC faculty have a central role in the training of new physicians and represent their own institution, [and therefore] should not function as paid marketers or spokespersons for medicine-related industries." Brennan et al., supra note 16, at 432.
181. In several instances, the authors support mechanisms to substitute centralized funding of specific academic medical centers by industry for decentralized funding of individual faculty. Id. at 431 (continuing education);
182. id. at 432 (physician travel and general research grants without deliverables).
183. Another issue in shifting from personal to institutional obligations is persuading individual professionals that imposing such duties at the institutional level will not strip them of professionalism and subject them to micromanagement. A variant of this phenomenon occurred in 1993, when the Clinton administration proposed shifting malpractice liability from physicians to managed care organizations as part of national health reform. Physicians reacted violently in opposition, notwithstanding their longstanding antipathy toward malpractice law. They viewed the proposal as confirmation that managed care would play the central role in clinical decisionmaking, and that physicians would be reduced to a secondary one. One medical leader claimed that the government was trying to take away his "constitutional right to be sued." See William M. Sage, Enterprise Liability and the Emerging Managed Health Care System, 60 LAW & CONTEMP. PROBS. 159, 170 (1997) (noting that physicians' groups feared that, under the Clinton proposal, if exposed to increasing liability, managed care providers would "terminate high-risk physicians and micromanage clinical practice");
184. William M. Sage et al., Enterprise Liability for Medical Malpractice and Health Care Quality Improvement, 20 AM. J.L. & MED. 1, 27 (1994) (remarking on physicians' concern about the possible constraints risk-averse health plan operators could place on doctors' autonomy, but concluding that holding health plans liable for medical malpractice would offer the positive result of making the plans responsible for the clinical effects of their cost-management decisions).
185. The authors observe that their approach arguably "transfers the pressure surrounding financial conflicts to the institution" but assert that "public access [i.e., disclosure] and peer pressure will more effectively operate at the institutional level and such a policy is preferable to banning all contact between manufacturers and academic centers." Brennan et al., supra note 16, at 432.
186. See, e.g., Margaret A. Winker et al., Guidelines for Medical and Health Information Sites on the Internet: Principles Governing AMA Websites, 283 JAMA 1600, 1603 (2000) ("To maintain the integrity of the AMA Web sites, advertising . . . cannot influence editorial decisions or editorial content . . . Decisions to sell advertising space are made independently of and without information pertinent to specific editorial content.");
187. New England Journal of Medicine Online Advertising Policy, http://www.nejm.org/aboutnejm/adpol.asp ("Advertising is separate from content. Advertisers and sponsors have no advance knowledge of our editorial content, nor do the editors shape content to accommodate advertising . . . Advertisers do not influence any of our editorial decisions or advertising policies. Publisher's advertising sales representatives have neither control over, nor prior knowledge of, specific editorial content before it is published."). The Medical Letter on Drugs and Therapeutics, which publishes expert evaluations of new drugs, refuses all advertising. The Medical Letter on Drugs and Therapeutics, http://www.medicallerter.org/html/who.htm (asserting that "[t]he Medical Letter, Inc., is completely independent. It is supported solely by subscription fees and accepts no advertising, grants or donations"). This debate has been extended to financial relationships between drug companies and authors of practical review articles that potentially influence the clinical decisions of large numbers of physician readers. The New England Journal of Medicine briefly banned physicians who receive drug company funding from writing review articles, but retreated to a mandatory disclosure policy when it realized that virtually all true experts would be precluded from contributing.
188. Jeffrey M. Drazen & Gregory D. Curfman, Financial Associations of Authors, 346 NEW. ENG. J. MED. 1901, 1901 (2002) (changing a policy requiring that review authors have no financial interest in a company (or its competitors) whose product is being reviewed to a policy requiring no "substantial financial interest," after concluding that the former policy was constraining the Journal's "ability to provide comprehensive, up-to-date information." (emphasis added));
189. Scott Gottlieb, New England Journal Loosens Its Rules on Conflicts of Interest, 324 BMJ 1474 (2002) ("The New England Journal of Medicine is relaxing its longstanding rules on conflict of interest so that it can publish evaluations of new drugs by researchers with financial ties to the manufacturers because it cannot find enough experts without financial ties to drug companies.").
190. There is no easy fix to problems of publication bias. For example, open-access journals are a growing alternative to traditional medical publishing, mainly as a result of increasing subscription costs. Instead of signing away copyright to a journal that receives revenues from subscribers, researchers or their sponsors pay a fee to publish in peer-reviewed, online journals that are free to readers. This broadens access to the results of research, but increases the journals' reliance on research funding to support their operations. Catherine Zandonella, Open Access: Will it Spell the End of the Medical Library?, 9 MED. ON THE NET 1, 1-7 (2003), http://www.hcpro.com/pub-3476.html. Ultimately, a combination of journals' reputational capital, disclosure of research support, and click-through access to underlying data are likely to prove most effective.
191. Unlike the typical media outlet with paid staff or freelance contributors, medical journals never pay for the articles (or even the editorials) they solicit or accept from outside authors, although they all require accepted authors to convey copyright to them, and most strictly enforce prepublication bans and single-submission rules - practices that often were collectively adopted and that in combination reduce competition among journals and provide substantial benefits to the journals that attract high-profile studies. See, e.g., New England Journal of Medicine Author Center, Instructions for Submitting a New Manuscript, available at http://authors.nejm.org/Misc/NewMS.asp (detailing rules on transfer of copyright and prohibitions against prepublication); Canadian Medical Association Journal, CMAJ Editorial Policies, available at http://www.cmaj.ca/authors/ policies.shtml (discussing copyright and submission rules for the CMAJ). The employers of the published authors - typically academic medical centers, hospitals, and large medical groups - subsidize this return to the journals, but this subsidy is so pervasive and so entrenched that journals never bother to consider whether it is a conflict of interest for them to "free ride." Compared to pharmaceuticals and medical devices, moreover, it is hard to characterize the service side of the American health care system as "industry," although the revenues it generates are immense.
192. See David A. Hyman, Institutional Review Boards: Is This the Least Worst We Can Do? 10-18 (U. III. Law & Econ. Research Paper No. LE06-024, 2006), available at http://ssrn.com/abstract=942862 (stating that "[t]here is no empirical evidence that IRBs have any benefit whatsoever," and lamenting the high costs resulting from the variability and inefficiency of the approval process);
193. see also Philip Hamburger, The New Censorship: Institutional Review Boards, 2004 SUP. CT. REV. 271 (arguing that federal mandates for IRB approval of research unconstitutionally subject speech to licensing requirements).
194. Other legal scholars with bioethics expertise have made similar pleas for more substantive oversight of research by IRBs. See Carl H. Coleman, Rationalizing Risk Assessment in Human Subject Research, 46 ARIZ. L. REV. 1 (2004) (arguing for more stringent risk assessment by IRBs);
195. Lars Noah, Informed Consent and the Elusive Dichotomy Between Standard and Experimental Therapy, 28 AM. J.L. & MED. 361, 384 (2002) ("IRBs may become preoccupied with reviewing the niceties of the consent form and perhaps less concerned about their separate obligation to make independent risk-benefit assessments about the research protocol . . . ."). Although recurring patterns of bureaucracy no doubt explain much of the misguided formalism of IRBs, it does not help that IRBs see themselves as enforcing relational obligations of researchers to subjects.
196. See Todd J. Zywicki, Institutional Review Boards as Academic Bureaucracies: An Economic and Experiential Analysis, Nw. U. L. REV. (forthcoming 2007).
197. See Paul G. Mahoney, Mandatory Disclosure as a Solution to Agency Problems, 62 U. CHI. L. REV. 1047, 1048 (1995) (proposing "the reduction of agency costs as an efficiency justification for mandatory disclosure" in federal securities law);
198. William M. Sage, Regulating Through Information: Disclosure Laws and American Health Care, 99 COLUM. L. REV. 1701, 1746-52 (1999) (discussing the "agency rationale" for mandatory disclosure).
199. See Kevin B. O'Reilly, More States Considering Gift-Disclosure Legislation, AM. MED. NEWS, Mar. 20, 2006, at 8-9 (describing bills in 15 states). Interestingly, these laws typically exclude compensation to physicians for participating in clinical research from the amounts that must be disclosed.
200. See Sage, supra note 125, at 1760 (describing disclosure by existing fiduciaries as presenting the peculiar question of "I know you need to rely on me, but is it OK with you that I may be unreliable?").
201. Moreover, having disclosed a conflict of interest, an agent may feel justified in engaging in self-serving behavior that is still a violation of trust. See Daylian M. Cain et al., The Dirt on Coming Clean: Perverse Effects of Disclosing Conflicts of Interest, 34 J. LEGAL STUD. 1, 7 (2005).
202. See, e.g., Annette Flanagin et al., Update on JAMA's Conflict of Interest Policy, 296 JAMA 220 (2006) (requiring complete disclosure of financial relationships and other sources of author bias at time of article submission in order to make that information transparent to peer reviewers, among others).
203. For example, federal law now requires public disclosure via the Internet of conflicts of interest involving scientists and physicians who serve on FDA advisory panels, replacing a prior policy of routine waiver of those conflicts. Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act of 2006, Pub. L. No. 109-97, § 795, 119 Stat. 2120, 2164-65 (2005).
204. An analogy in securities law is the regulation of mutual funds, which have replaced individual stock picking as the principal vehicle for securities investment by individuals. The Securities Act of 1933 emphasizes disclosure by corporate management of firm-specific risks, including self-dealing, that might affect the value of purchased shares, an approach that was largely carried over to mutual fund regulation in the Investment Company Act of 1940. Securities Act of 1933, 15 U.S.C. §§ 77a-77aa (2000);
205. Investment Company Act of 1940, 15 U.S.C. §§ 80a-1-80a-64 (2000).
206. As Henry Hu persuasively argues, however, today's mutual fund investors need more information about principles of portfolio construction and the overall risks of investing in certain classes of assets. He urges the SEC to emphasize general investor education in its regulation of mutual fund disclosure rather than continuing to focus only on firm-specific relational matters. Henry T.C Hu, The New Portfolio Society, SEC Mutual Fund Disclosure, and the Public Corporation Model, 60 BUS. LAW. 1303, 1338-53 (2005).
207. See supra note 21.
208. 45 C.F.R. § 46.123 (2005).
209. But see Grimes v. Kennedy Krieger Inst, Inc., 782 A.2d 807 (Md. 2001) (denying summary judgment under state tort law to defendants in case involving alleged violations of federal research regulations).
210. In a recent study of 129 voluntary policies (consent forms) from 102 U.S. academic medical centers, compensation for research injury was uncommon, and inconsistent even when available. Robert Steinbrook, Compensation for Injured Research Subjects, 354 NEW ENG. J. MED. 1871, 1872 (2006).
211. In 51.2% of the policies reviewed, free medical care was not provided by the researchers or their institutions in the event of injury arising from research. Id.
212. Free medical care was provided according to the terms of 16.3% of policies, and in another 10.1% of policies free care was provided if the research subject did not have health insurance. Id.
213. Case-by-case decisions were offered regarding compensation in the event of research injury in 3.9% of the policies reviewed, and in the remaining 18.6% of policies, no statement on compensation for research injury was publicly available. Id.
214. "If at all" refers to the charitable immunity that for decades protected academic medical centers from suit in most states before eroding as health insurance became prevalent in the 1950s and 1960s. See Tunkl v. Regents of Univ. of Cal., 383 P.2d 441, 448 (1963) (rejecting UCLA's argument that patients willingly submitting themselves for treatment in a research-oriented teaching hospital waived their right to sue for injury).
215. Carl Coleman identifies recent litigation against clinical researchers as a pressing reason to define clearly the obligations owed by researchers to subjects, particularly because the template for such litigation is the obligation of physician to patient under established laws of medical malpractice and informed consent. Carl H. Coleman, Duties to Subjects in Clinical Research, 58 VAND. L. REV. 387, 388-91 (2005);
216. see also Michelle M. Mello et al., The Rise of Litigation in Human Subjects Research, 139 ANNALS INTERNAL MED, 40, 43 (2003) (describing relevant legal theories, including conflicts of interest),
217. Coleman identifies but rejects polar visions of clinical researchers as physicians who owe subjects a full obligation of therapeutic beneficence notwithstanding their consent to serve as subjects, and as pure scientists who have no responsibility to promote subjects' wellbeing once consent is received. Coleman, supra, at 396-404.
218. Instead, he favors a fiduciary analysis that combines disclosure with objective fairness. Id. at 448-49.
219. Interestingly, Coleman draws fiduciary analogies from trustees, corporate directors, and business partners, but not from lawyers. Id. at 390.
220. See, e.g., Maxwell D. Mehlman, Dishonest Medical Mistakes, 59 VAND. L. REV. 1137 (2006).
221. 782 A.2d 807 (Md. 2001).
222. Id. at 843-47 & n.36.
223. See David A. Hyman, Do Good Stories Make for Good Policy?, 25 J. HEALTH POL. POL'Y & L. 1149 (2000) (arguing that when atypical or incomplete stories motivate health care "reform," unsound policies may result);
224. William M. Sage et al., Bridging the Relational-Regulatory Gap: A Pragmatic Information Policy for Patient Safety and Medical Malpractice, 59 VAND. L. REV. 1263, 1301-05 (2006) (discussing the relationship between health policy and the characterization of lives as "identified" or "statistical").
225. See David A. Hyman, How Law Killed Ethics, 34 PERSP. BLO. MED. 134 (1990);
226. William M. Sage, The Lawyerization of Medicine, 26 J. HEALTH POL. POL'Y & L. 1179, 1184-87 (2001) (describing bioethics today as having "reoriented itself under the influence of law away from its traditional focus on physician beneficence and toward a focus on patient autonomy).
227. Greg Koski argues that the Belmont Report, which gave rise to the current system of federal regulation based on external oversight by IRBs, was at odds with scientific norms that favored researchers' personal responsibility for protecting "their" subjects. Koski, supra note 117, at 408.
228. To Koski, this denial of medical scientists' humane duties both reduced acceptance of the IRB-based system and provided an easy, acceptable way for many scientists to escape that personal responsibility. Id.
229. Koski therefore argues for a "culture of conscience" rather than a "culture of compliance" in human subjects research. Id. at 410. Koski does not specify the relational obligations that modem medical scientists should assume, or how they could be reconciled in a legal framework with the public goals of biomedical research.
230. Brennan et al., supra note 16, at 430-32.
231. See, e.g., ROSCOE POUND, THE LAWYER FROM ANTIQUITY TO MODERN TIMES 5 (1953) (defining a profession as a "learned art, practiced as a common calling, in the nature of a public service").
232. See Donald A. Redelmeier & Amos Tversky, Discrepancy Between Medical Decisions for Individual Patients and for Groups, 322 NEW ENG. J. MED. 1162 (1990) (showing that physicians have a stronger impulse to treat despite risks when decisions are presented as applied to individual patients rather than patient groups).
233. See Adriane Fugh-Berman & Shahram Ahari, Following the Script: How Drug Reps Make Friends and Influence Doctors, 4 PLOS MED. E150 (2007), available at http://medicine.plosjournals.Org/ archive/1549-1676/4/4/pdf/10.1371_journal.pmed.0040150-L.pdf (explaining pharmaceutical sales tactics and stating that "[r]eps may be genuinely friendly, but they are not genuine friends");
234. Michael J. Oldani, Thick Prescriptions: Toward an Interpretation of Pharmaceutical Sales Practices, 18 MED, ANTHROPOLOGY Q. 325 (2004) (observations from a former drug representative turned medical anthropologist).
235. The University of Texas at Austin, for example, recently adopted a policy on institutional conflicts of interest. However, it defines conflicts narrowly as equity ownership, patent rights, and other explicitly commercial transactions with industry, and does not consider the "mixed mission" question from an institutional perspective. See THE UNIV. OF TEX. AT AUSTIN, REVISED HANDBOOK OF OPERATING PROCEDURES, INSTITUTIONAL CONFLICT OF INTEREST IN HUMAN SUBJECTS RESEARCH No. 11.B.2 (2006).
236. Rebecca Dresser, Patient Advocates in Research: New Possibilities, New Problems, 11 WASH. U. J.L. & POL'Y 237, 245-46 (2003) (discussing the responsibilities of patient advocates in research).
237. Coleman, supra note 136, at 396-403.
238. The Office of the Inspector General of the U.S. Department of Health and Human Services has documented "disturbing recruitment practices" linked to physicians, hospitals, and nursing homes that receive substantial payments from pharmaceutical companies. JUNE GIBBS BROWN, OFFICE OF INSPECTOR GENERAL, DEP'T OF HEALTH AND HUMAN SERVICES, RECRUITING HUMAN SUBJECTS: PRESSURES IN INDUSTRY-SPONSORED CLINICAL RESEARCH 2 (2000). Commentators report that payments of $2,000-$5,000 per subject are common, and some physicians who hold themselves out as clinicians probably earn more from recruitment than from clinical care.
239. See Jesse A. Goldner, Dealing with Conflicts of Interest in Biomedical Research: IRB Oversight as the Next Best Solution to the Abolition Approach, 28 J.L. MED. & ETHICS 379, 382 (2000);
240. Trudo Lemmons & Paul B. Miller, The Human Subjects Trade: Ethical and Legal Issues Surrounding Recruitment Incentives, 31 J.L. MED. & ETHICS 398, 398 (2003). Lemmons and Miller offer a sophisticated analysis of the legal and ethical issues, but concern themselves with what they consider the generally corrupting influence of research commercialization rather than the specific risk of divided loyalty.
241. The equivalent in law might be money returned to a lawyer by an expert consultant who has performed services that were billed at full cost to the client. These payments situations are different than referral fees associated with the initial formation of a professional relationship and fee-splitting for wholly transferring professional services from one practitioner to another-ethical concerns in both medicine and law-which raise issues of professional competence, wasteful services, and lay interference with professional practice, but not divided loyalty. Am. Med. Ass'n, Code of Medical Ethics: Current Opinions with Annotations, COUNCIL ON ETHICAL AND JUDICIAL AFFAIRS OPINION 6.02, at 164 (2006-2007 ed.).
242. Unlike law, where the rules of the adversarial system (at least in litigation) circumscribe the attorney as zealous advocate, physicians are accustomed to exercising broad discretion in their professional roles. See generally William M. Sage, Physicians As Advocates, 35 HOUS. L. REV. 1529 (1999).
243. Am. Med. Ass'n, supra note 151, 8.031, at 185-86. The Canadian Medical Association's policy is that "[i]t is acceptable for physicians to receive remuneration for enrolling patients or participating in approved research studies only if such activity exceeds their normal practice pattern." CANADIAN MEDICAL ASSOCIATION, CMA POLICY: PHYSICIANS AND THE PHARMACEUTICAL INDUSTRY 2 (2001);
244. see also Lemmons & Miller, supra note 150, at 406-08 (discussing and comparing the policies of both the Canadian and American Medical Associations regarding the ethical and legal responsibilities of physicians involved in research).
245. Am. Med. Ass'n, supra note 151, 6.03, at 166.
246. However, the AMA may have put too fine a legal point on what is a fundamental ethical issue. The opinion's principal goal was to codify as medical ethics recently enacted federal prohibitions (called the "Stark laws"), the primary purpose of which was to protect the financial integrity of Medicare and Medicaid, not to reinforce physicians' obligations to patients. See 5 BARRY R. FURROW ET AL., HEALTH LAW CASES, MATERIALS AND PROBLEMS 1033-35 (2004) (noting that the "principal problem identified by academic studies that led to the enactment of Stark I was excessive and perhaps inappropriate referrals by physicians to entities in which they had an ownership interest," which in turn resulted in additional costs to the Medicare program);
247. William M. Sage, Fraud and Abuse Law, 282 JAMA 1179, 1180 (1999) (arguing that the anti-kickback law and self-referral prohibitions theoretically apply whether or not the conduct at issue increases Medicare spending, and that this tends to bring enforcement into conflict with sound health policy).
248. See CODE OF MEDICAL ETHICS, CURRENT OPINIONS WITH ANNOTATIONS, § 8.032:181 (2004-2005 ed.).
249. For a discussion of how the False Claims Act, the anti-kickback law, and the Stark laws might apply to research payments, see Paul E. Kalb & Kristin G. Koehler, Legal Issues in Scientific Research, 287 JAMA 85 (2002). However, payments to faculty members of academic medical centers for assisting institutional research fall within an exception to the fraud and abuse laws for bona fide employment relationships, even if the payments influence the physicians' recommendations regarding patient care. State fraud and abuse laws may offer greater protection for patients in these situations.
250. Elias A. Zerhouni & Barbara Alving, Clinical and Translational Science Award: A Framework for a National Research Agenda, 148 TRANSLATIONAL RESEARCH 4, 4-5 (2006).
251. Modern science policy recognizes a role for "innovative clinical practice," meaning the incorporation of an ongoing commitment to research into ordinary physicians' everyday activities. David G. Nathan et al., Opportunities for Medical Research in the 21st Century, 285 JAMA 533, 534 (2001), available at http://www.laskerfoundation.org/reports/jamaJasker/ v285n5/fpdf/jed10001.pdf;
252. see also Nancy M.P. King, The Line Between Clinical Innovation and Human Experimentation, 32 SETON HALL L. REV. 573, 576 (2002)
253. (discussing the tension between legal oversight and clinical innovation). Physicians have always viewed experimentation that improves clinical care as part of their professional mission, such as surgeons tinkering with existing operative procedures or equipment, or physicians administering FDA-approved drugs "off-label" for new indications. CODE OF MEDICAL ETHICS, supra note 155, at xiv.
254. Jeffrey M. Drazen, Government in Medicine, 356 NEW ENG. J. MED. 2195, 2195 (2007) (reacting to a U.S. Supreme Court decision upholding a congressional ban on "partial-birth abortion").
255. See, e.g., John C. Coffee, Jr., Causation by Presumption? Why the Supreme Court Should Reject Phantom Losses and Reverse Broudo, 60 BUS. LAW. 533 (2005);
256. Merritt B. Fox, Demystifying Causation in Fraud-on-the-Market Actions, 60 BUS. LAW. 507 (2005).
257. The Supreme Court recently clarified, in a securities fraud class action suit, the relationship between failure to fulfill regulatory duties to the investing public and rights to specific financial recovery by identifiable investors. Dura Pharm., Inc. v. Broudo, 544 U.S. 336 (2005). Fraud on the market liability requires a material misrepresentation, scienter by the misrepresenter a connection with the purchase or sale of a security, transaction causation (reliance), economic loss, and loss causation. Id. at 341-42.
258. In Dura, the Court brought the legal theory of recovery, which had become increasingly regulatory, back to its common law relational roots by rejecting an "inflated purchase price" as sufficient proof of economic loss and loss causation, and requiring that a plaintiff allege and prove proximate cause in terms of a connection between the misrepresentation and an eventual fall in value of the plaintiffs shares. Id. at 345-46.
259. At the same time, however, the Court accepted the notion that purchase of a widely traded security at market price constituted reliance on public representations of which the plaintiff was not specifically aware. Id. at 341-42.
260. Stocks and bonds are conveyed by identifiable buyers to identifiable sellers, with attendant obligations of fair dealing, but these transactions constitute in the aggregate a major determinant of national prosperity and public confidence in government. Donald Langevoort suggests that Sarbanes-Oxley's most important effects on business may be less about investor protection per se and more about renegotiating the boundary between the public and private spaces in big corporations, a much deeper ideological issue. The legislation may reflect a political instinct that the incentive structure in the modem public corporation generates risks that require public (not just investor) accountability to be legitimate.
261. Donald C. Langevoort, The Social Construction of Sarbanes-Oxley (Georgetown Law and Economics Research Paper No. 930642, Sept. 18, 2006), available at http://ssm.com/abstract-930642.