Front Page, Above the Fold
Sunday Star-Tribune
December 21, 2008

Conflict of Interest at the U Med School?

[Added XII-21: A pdf of the final report of the disciplinary committee is available for download from the Strib's website.]

[Added XII-2-09: if you want to see how cooperative the University of Minnesota was in disclosing this conflict, please see: Openness and Transparency at the University of Minnesota ]

From the Star-Tribune:

U Doctor on ethics panel was disciplined

By MAURA LERNER, JOSEPHINE MARCOTTY and JANET MOORE, Star Tribune staff writers

December 20, 2008

A professor who is leading the University of Minnesota Medical School's effort to write tougher ethics rules was himself disciplined in 2004 for secretly steering a $501,000 research grant to his own company, according to university investigative reports obtained by the Star Tribune. 

Dr. Leo Furcht, the chairman of lab medicine and pathology, was reprimanded for a "serious violation" of university conflict-of-interest policies in connection with a grant from Baxter Healthcare for stem cell research at the Medical School, according to the investigation, which the newspaper received through the state's public records law.

As a result, Medical School Dean Deborah Powell banned Furcht in May 2004 from any business-sponsored research for three years.

In 2007, Powell named Furcht to co-chair a task force to reform the Medical School's conflict-of-interest policy.

So someone is sanctioned for conflict of interest violations and three years later he is appointed to chair a task force on the matter. Does not compute..

Furcht, a nationally known scientist and author, declined to comment. He said through a spokeswoman that the matter had been "amicably resolved," and that there was nothing to be gained by talking about it.

Nothing to gain? Why wouldn't the valuable insights of Dr. Furcht on this matter be of interest to the community? The story could have a sort of reformed pirate twist to it, don't you think? Dr. Furcht should use some of the ten million dollars that he made on this patent and use it to employ a mouthpiece the way the big boys in the University administration do. That way he could have the mouthpiece refuse to talk rather than having to do the job himself.

Powell said in an interview that she chose Furcht for the task force because he had extensive experience with national professional organizations on devising conflict-of- interest rules. "That seemed to me to be a compelling reason to appoint him to that role," she said.

Compelling reason? That seems like the logic Parente used to justify playing footsy with McGuire. How about his qualifications from being a conflict of interest policy violator? As we'll see, that comes later.

Furcht's case has come to light in the midst of a contentious internal debate at the Medical School about a new ethics code that would be among the toughest in the nation. 

Across the country, universities are struggling to define the proper relationship between business and academia, as federal investigators probe the ties between doctors and medical companies.

Powell said Friday she did not inform the rest of the task force members about the sanctions against Furcht. "I did not think it was relevant," she said. Furcht had followed the 2004 restrictions to the letter, and "it seemed time to move on and use his expertise, which was considerable," she said. 

Incredible. Not relevant? Someone's moral compass seems demagnetized here. 

But the internal investigation showed how Furcht flouted the university's ethics rules on a research project in which he stood to make millions of dollars. 

Actually that is ten million dollars as we'll see.

Ironically, it didn't even involve Furcht's own research.

'Significant financial interest'

In the late 1990s, a colleague, Dr. Catherine Verfaillie, had made a breakthrough in stem-cell research. When the university declined to patent it, Furcht created his own company, MCL, and filed for the patent along with Verfaillie and another researcher.

Now of course, the sixty-four thousand dollar, whoops that is ten million dollar, question is: Why did the university decline to patent this? Either there was some hanky-panky or someone was incompetent. Which was it?

In July 2000, Furcht lined up a research grant from Baxter to pay for more research, to be conducted in university laboratories, but did not disclose the deal to the university. Instead, Baxter paid the money, $501,000, to MCL.

[tsk, tsk..]

Verfaillie said Friday she performed the research in her university lab, but did not receive the money. Eventually, she contacted the dean, triggering an investigation.

A panel of three faculty members investigated and concluded that Furcht "committed a serious violation of the conflict of interest policy," according to a Dec. 19, 2003, report.

Among other things, they found that Furcht "knew or should have known" that he was required to disclose the financial arrangement with Baxter, because he had "a significant financial interest" in MCL and the stem-cell technology.

Is this what we call a smoking gun?

"In fact, it appears Dr. Furcht stands to personally gain several million dollars from the pending sale of MCL," the report said.

In November 2003, Furcht sold MCL for $9.5 million in stock, sharing 5 percent of the proceeds with the university.

Wasn't that generous of Dr. Furcht? Why did he do this? Out of the goodness of his heart or was there some political pressure? Wasn't this stem cell business somehow supposed to make the University a lot of money? Aren't new jobs and industries supposed to be the justification for requesting funds to support biomedical research and new buildings? And to whom was this patent sold and where are any jobs created by this transaction?

The panel recommended that Furcht be disciplined and questioned whether he should retain his position as department chair. It also raised concerns that he may have misused his position "to personally benefit him and his commercial interests," and recommended further investigation.

In her letter concluding the matter, Powell wrote: "Despite this, I value your managerial abilities as a department head and wish to retain you in this role."

This is a joke. Documentation upon request.

University officials said Friday that the university was reimbursed for the $501,000.

Well that makes it all better, right? No harm no foul? I don't think so.

Frank Cerra, the university's senior vice president for health sciences, said Friday he was familiar with the case but couldn't recall details. He said Furcht's experience could help inform the conflict-of-interest committee's work.

Frank, this is simply a stupid thing to say. You can't be serious. If you are then you need to join the department of demagnetized moral compasses also.

"If they learn from it and they move along in a direction where it doesn't happen again, that's exactly what you want to happen with an ethics policy,'' Cerra said. "If that's the case here, there can be a positive contribution to the next set of rules and interpretations.''

I think the lesson would have been a little stronger if the Medical School had not made every effort to keep the matter under wraps. It is only through some very diligent work on the part of many people that this came to light. And as you certainly realize, Dr. Furcht's participation in the panel casts its work in a very bad light, even if the recommendations are good ones. There is no way that someone like this should have been involved in a conflict of interest panel. And both you and the Dean were aware of Dr. Furcht's having been sanctioned.

Toughening ethics rules

Dr. Doris Taylor, a university heart researcher and member of the task force, said that Furcht was only one of 24 voices on the committee and that he supported the new, stricter policies. "I hear him say all the time, we have to be transparent," she said

"I think he knows what a conflict looks like," she added.

The Medical School is writing new ethics rules at a time when the university has come under pressure to cultivate a closer relationship with Minnesota's high-tech business community and to improve the commercial application of faculty research.

The U's Medical School has not escaped the controversy. Last year, orthopedic surgeon Dr. David Polly was named in a congressional investigation of consulting agreements between some of the nation's top spine surgeons and Fridley-based Medtronic Inc.

This month, two prestigious medical centers, the Cleveland Clinic and the University of Pennsylvania's School of Medicine, said they will use public websites to disclose consulting and research agreements involving their physicians and researchers. That type of public disclosure is a key part of the U of M's proposed ethics policy.

In an interview last fall, Furcht said he has served on two national task forces dealing with conflict of interest in research and education. "I've been working on this issue for some time," he said.

"It's just too important to not attend to this [policy] properly. The public trust is more important than the money involved. You have to ensure that."

If that is true, Leo, why don't you turn all of your MCL money over to the University?