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Conflict of Interest at the Medical School - Big Time

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

For a rant, please see the Periodic Table post:

Conflict of Interest at the Medical School

From the Star-Tribune:

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.

Furcht, a nationally known scientist and author, declined to comment.

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.

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.

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.

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.

"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.

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."

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.


Open your mouth and say awe.

(A pdf of the disciplinary panel's report is available on the Strib's website. A transcript will eventually be published on this site.)

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