An Introduction to Foundation and Industry-Sponsored Research: Practical and Ethical Considerations

The total budget for biomedical research in the United States is impressive. Approximately $100 billion (B) or 5.6% of the total health care budget is devoted annually to the gamut of health care–related research initiatives.¹ Outlays for research come from government, industry, and philanthropic entities, including foundations, voluntary health organizations, freestanding research institutes and directed donations from private individuals. Recent surveys show that the majority of research activity (57.4%) is sponsored by commercial interests (i.e., pharmaceutical, biotechnology and medical device companies). Philanthropic interests contribute approximately 2.8%. The remaining portion is derived from government sources, primarily the federal government.¹ 

The National Institutes of Health (NIH) is the single largest provider of support for academic biomedical researchers. The lynchpin of the NIH extramural research program is the RO1 award for investigator-initiated research projects. Currently, the NIH distributes approximately 56% of its resources to basic research efforts and 41% to applied research projects.² In 2006, the NIH awarded $3.36B for new and competitively renewing grants out of a total budget of approximately $29B.³ This compares to $1.82B awarded in 1997. In the same decade, the NIH received increasing numbers of applications, with most of the increase occurring after a near doubling of the NIH budget between 1998 and 2003. In 2006, the NIH received 45,688 applications for new and competing research project grants compared with 24,221 in 1997.³ The NIH is projected to receive 49,000 applications for new and competing research project grants in 2007.² 

Despite surging numbers of applications, federal appropriations for biomedical research, after adjustments for inflation, have been essentially flat in the past 4 years.² Indeed, funding is projected to decline for fiscal year (FY) 2007 and into the foreseeable future. As a consequence, the success rate for funding of new RO1 applications has declined steeply in recent years. New RO1 applications were funded at a rate of 30.5% a decade ago, but at a rate of only 20% last year.³ The success rates for first-time applicants (i.e., junior investigators) have dropped to less than 10%.⁴ Meanwhile, the average age of researchers at the time of their first successful application has climbed to 41.7 years from 34.2 years a generation ago.⁵ 

Increasingly, the successful establishment of independent research careers with federal sponsorship is a receding dream for many junior investigators. There is concern that multiple factors, including intensified competition, escalating research costs and a realignment of federal funding priorities are creating a “lost generation” of biomedical researchers.^2,5 Physician scientists pursuing translational and clinical research interests are especially at risk of being marginalized by these trends.⁶ In the current milieu, funding from nongovernmental sources can play a vital role in nurturing and preserving junior investigators through the protracted years, extending from the completion of training to the establishment of academically independent research programs.

Historically, nearly hermetic barriers existed between academic institutions and commercial enterprises, thus limiting the exchange of ideas, information and resources. The Bayh-Dole Act of 1980 codified a political consensus to foster the commercial application of research developed in academic centers with federal support.⁷ The abiding impact of the legislation has been (1) to greatly augment technology transfer from its investigational origins to applications by the industrial sector, and (2) to facilitate growing collaborations between industry and academic institutions. Biotechnology and pharmaceutical companies have expanded rapidly under the licensing agreements enabled by Bayh-Dole and have played a growing role in research activities of many academic centers as a result. All aspects of research from basic to applied are the target of corporate interest and support. Translational and clinical projects that are associated with higher costs, but also higher chances of prompt commercialization compared with basic research projects, receive the largest portion of corporate investments.

While most companies devote most of their research budgets to intramural proprietary efforts, many support extramural research endeavors that potentially can enhance their bottom line. Companies provide research support to investigators through various mechanisms, including provision of supplies, drugs, reagents or equipment under development. They also engage in collaborative research support and contractual arrangements on specific research projects, e.g., clinical trials conducted by individual investigators or cooperative research groups. Many large companies also provide direct support for investigator-initiated studies through specific competitive grant award programs. Corporate award programs commonly earmark support for young investigators.

Philanthropic foundations and nonprofit organizations without ties to corporate interests also have assumed increasing importance in fostering researchers early in their careers. Despite their modest contributions to the total biomedical research budget, philanthropies are adept at leveraging their role by focusing resources on promising young investigators. The American Society of Hematology’s Scholars Award and the American Society of Clinical Oncology Foundation’s Clinical Investigator Career Development Award represent examples of programs that specifically target research money to meritorious young investigators. The ability of an investigator to garner support from foundations and other charitable organizations often provides the first substantive evidence of investigative talent and competitiveness and, thus, can catalyze an investigator’s successful entry into the pool of federally-funded investigators.

The opportunities provided by philanthropic foundations should not be underestimated. In 2005, 1200 of the largest foundations in the U.S. distributed $16.4B worth of aid, of which $3.4B (21%) went to the support of health-related initiatives. A total of 17,138 grants were awarded in this area.⁸ In addition, donations by individual patients, their families and friends also support the endeavors of biomedical researchers. Accurate estimates of the amount of research sponsorship that occurs through this latter mechanism are not available, but undoubtedly are substantial. Physician researchers who directly care for patients are positioned to solicit charitable support for their own research or contributions for their institution in the form of donations, endowments or bequests. There have been recent examples of physician researchers who have gone so far as to solicit contributions from active study patients when other sources of funding for clinical trials fall short.⁹ 

A large array of philanthropic and commercial organizations offer support for biomedical research. The search for funding opportunities that provide a reasonable likelihood of success can be time consuming and frustrating. Some organizations provide limited or no publicity about their funding opportunities or provide only short notice of application deadlines. There are several measures investigators can take to enhance the efficiency and yield of their search efforts. An important starting point is to solicit information from mentors and faculty colleagues, who often can identify the most promising funding prospects and provide guidance on how to compete most effectively for particular awards. Mentors and colleagues may have invaluable first-hand experience with the procedures and unique aspects of the application process for a particular organization. They also may have important personal liaisons and, thus, be able to provide decisive references.

Investigators also can benefit from an exploration of opportunities that may not be familiar to their colleagues and associates. Most academic institutions enlist administrative specialists to aid investigators in identifying promising funding prospects in a timely fashion. Investigators can enhance their prospects by fully harnessing available institutional resources and databases. Freely accessible internet-based search engines can facilitate researchers’ efforts to identify even the most obscure research funding announcements (RFAs). Grant offerings by more than 10,000 foundations and nonprofit organizations throughout the U.S. can be screened via the Foundation Grant Index, a free, searchable listing service sponsored by the nonprofit Foundation Center. More specialized tracking programs for scientists also are available that can automatically screen RFAs on a periodic basis according to defined criteria. For example, the Grants Net and Community of Science (COS) search engines provide alerting services that are widely subscribed to by academic scientists. The latter draws upon nearly 400,000 grant opportunities, worth more than $33B. More targeted web resources specifically designed for researchers in the area of hematology also can be accessed. For example, the American Society of Hematology website hosts a “grants clearinghouse.”¹⁰ This site lists grant offerings fitted to the interests of junior investigators in hematology and is regularly updated to provide current information. Similar listing services can be found through other hematology-related professional organizations.

Once a potential funding opportunity has been identified, applicants should carefully examine the RFA to determine whether submission of a proposal is feasible, appropriate for the investigator’s research objectives, and sufficiently likely to yield success. It is important to pay close attention to requirements and procedural specifications of the application, as there is significant heterogeneity in formatting and content requirements from organization to organization. When contracting directly with a company, it is especially important to thoroughly review and establish the “terms of agreement” and other contractual details. Early involvement of administrative personnel with expertise in grants and contracts matters is essential in preparing an application that steers clear of potential financial and legal pitfalls. These experts can help analyze and develop appropriate budget requests and anticipate special documentation that may be required, including the Memorandum of Understanding, Material Transfer Agreements, and licensing agreements. Such foresight can greatly speed the preparation, submission and implementation of a proposal.

Most funding organizations require a written research proposal as a precondition for consideration. The fundamental principles for preparing a competitive application are no secret and have been thoroughly reviewed in recent Hematology Grants Workshops.^11 –14 Successful funding is contingent on the submission of a compelling document that addresses an important and relevant question in a scientifically rigorous manner. Funding also hinges on the convincing demonstration of the competency and potential of the investigator, and the adequacy of the environment within which the work will be performed. The relevance of the proposed project and likelihood of success are especially important considerations for philanthropic and commercial organizations. Foundations and companies are keen to see positive outcomes for their research investments. The ultimate success of a project bolsters not only the profile of the individual investigator but also the sponsor. Foundations and commercial organizations are highly accountable to their “stakeholders.” Thus, investigators need to be aware of and responsive to the organizations expectations and needs.

There is a growing need for investigators who are able to translate the prolific advances occurring in the basic biological sciences into tangible clinical applications. Developing and conducting effective translational and clinical research studies in the current milieu is particularly challenging. In this section, a methodology for clinical trial design and implementation will be outlined, with specific focus on practical aspects of the development of investigator-sponsored trials (ISTs).

As for any experiment, an IST is based on a solid foundation of background data and must articulate a hypothesis for which an experimental methodology can be clearly designed. These methods can be loosely divided into (1) translational aspects of the research (what is the biologic phenomenon under investigation, and how does the question move from laboratory or preclinical models into the clinical setting?); (2) clinical and potential analytic endpoints (for example, pharmacology and novel toxicities); and (3) correlative analyses and/or surrogate endpoints for answering the study hypothesis (these studies may be done in parallel with the clinical trial or may be performed after the clinical trial is completed, using samples acquired during the trial). The clinical aspects of the study depend on the type of subject and/or agent(s) and the methodologies for answering the study hypothesis. Finally, the development of any clinical study must take into account all of the budgetary, ethical and legal aspects of the relationship between the investigator, the institution, and the sponsor of the research.

The selection of subjects to be studied in a clinical trial may appear simple and straightforward, but can be challenging. The target population is defined by the disease of interest, including stage and prior therapies; other medical conditions may exclude or narrow the pool of subjects. While narrowing the eligibility criteria may enhance the likelihood of proving the study hypothesis by better targeting the intervention, it also slows accrual and may result in an excessively long time to obtain sufficient study subjects. Since the precise mechanism(s) of action of many therapeutic agents is not as straightforward as is often believed during preclinical development, this aspect of study subject eligibility is often the most challenging.

The importance of a statistical collaborator cannot be overemphasized. In the early days of clinical research, it was unusual to see a statistician as a coauthor of a clinical paper, while in 2007, it is rare to see a publication without a statistician among the authors. Probably the most important consideration in collaborating with the study statistician is to recognize the importance of getting the statistician’s input into study design from the very beginning. As budgetary and data collection and analytic requirements in ISTs become more demanding, the role of the study statistician also has expanded to address these components of study design. It is neither fair nor likely to produce optimal results if the statistician is simply “assigned” to the study, rather than engaged throughout the life cycle of the trial, from early protocol design to publication. It may not be essential that statistical support be provided by a PhD statistician with expertise in clinical trial statistics, if the investigator or another member of the team is capable of providing all of the statistical input. However, an investigator without adequate statistical expertise who acts as his or her own statistician may end up having a fool for a statistician and unsatisfactory data as a result (i.e., garbage in = garbage out). Other members of the research team will depend on the type of study, but generally include a research nurse, a clinical research associate, one or more investigators from analytic labs, and adequate regulatory and secretarial support.

Obtaining the study agent and possible funding for the study from a commercial sponsor generally requires the submission of a letter of intent (LOI), similar to those which have been used for many years to obtain drugs from the NIH. The source of the investigational therapeutic agent is usually linked with the funding for the protocol. The drug-providing sponsor for ISTs often provides very modest funding that is insufficient to run the trial, so additional support must be obtained, either from institutional funds or by application for a separate grant from one of many potential alternative sources. These include government agencies such as the NIH, Food and Drug Administration (FDA), or Department of Defense, as well as private foundations and academic organizations.

The remainder of this section will focus on some of the key logistic challenges of ISTs that are designed by an academic investigator and conducted with a therapeutic agent and partial funding from a private company. The most important practical aspects of this mechanism are the low level of funding available for this type of study and the need in some cases for the investigator to hold or cross-file on the company’s investigational new drug applications (INDs) for the agent to be used in the proposed protocol. Since this form of study may promote the career trajectory of the principal investigator, some academic institutions are willing to subsidize ISTs in anticipation of their leading to peer-reviewed competitive funding in the future. Foundations also have been considered to be somewhat less competitive sources of supplemental funding for clinical investigations. However, the gradual erosion of biomedical research funding from government sources has lead to a shift in applications from government to private sources, creating a form of the “Will Rogers phenomenon” in which migration of the less-successful grants has raised the levels of competition in both groups. At the same time, legal and financial constraints on pharmaceutical and biotechnology companies have reduced their ability to provide investigational agents and financial support for ISTs. The rising costs of drug development and the preferential support of studies that will be used for FDA approval create an additional hindrance to industry-based support of smaller investigator-initiated studies that are unlikely to lead to an expanded indication and may reveal additional toxicities. The applications for access to investigational drugs (LOIs) similarly have become more formal and subject to more intense scrutiny than previously, when a phone call and a letter to a friend at the company often sufficed. Timing of an LOI submission with adequate understanding of a sponsoring company’s scientific, financial and regulatory positions also can be challenging, since drug companies can be unpredictable, with a high rate of turnover in personnel and sometimes abrupt changes in policy.

Companies have long been aware of the importance of protecting intellectual property, which translates into financial might if drug development is successful. In the past, investigators often failed to take into consideration that discoveries made in the course of their research could also have future monetary value to both the investigator and their institution. Young investigators, in particular, often are slow to appreciate the value and scope of intellectual property created by their research efforts and the mechanisms for protecting property rights and technical application. Awareness of these issues has resulted in an increase in investigational efforts to address the legal and financial aspects of intellectual property protection. The extent and type of legal coverage for these matters varies with the nature of the institution. At a minimum, there needs to be legal counsel with experience in technology transfer and the regulatory aspects of INDs and intellectual property (IP).

Several points to be addressed for all ISTs include the ownership of the data (commercial sponsor versus investigator/institution) and policies regarding publication (i.e., whether the company requires a review of manuscripts before submission for publication). Additional details include the investigator’s and institution’s history of collaboration with the sponsor, use of the investigational product and any conflicts of interest, such as relationships with companies involved in the development of potentially competing products. Other potential conflicts of interest include prior or existing financial arrangements between the institution and/or investigator, for example, payment for consulting or research support for other projects. Longer-term, but also essential, concerns include the commitment on both sides (sponsor and principal investigator [PI]/institution) to the present project and future related development of the study agent. The sponsor may wish to seek an extension of the IP rights into the future (potentially valuable new or ancillary IP from the same agent that is unexpected but derives directly or indirectly from its use in the present study). Finally, the possibility of more global protection because of either background IP at the institution or with the investigator regarding related inventions may require more complex solutions, including the development of master agreements. While it seems obvious that the main reason for protection of IP involves protection of the revenue that will derive from that IP, the specific methods in the legal contract must also include basic principles of good and honest communication. These include acknowledgment of the funding source and contract in all formal reporting of the data, keeping meticulous records using sources that can always be traced (such as numbered notebooks with hardcopy entries), and notification to the institution and its legal counsel or (office for IND development and regulatory affairs) of any new discoveries related to the IP.

The ethical principles guiding the relationship between investigators and industry are complex, subject to considerable debate and only partially covered by current laws and regulations.¹⁵ While pharmaceutical and biotechnology companies have been essential to the development of and progress in medical science, they are for-profit, and their primary responsibility is to maximize profits for their shareholders. However, in addition to generating profits, companies have ethical responsibilities to other stakeholders, such as employees, customers, and the community (“Good ethics is good business”). Certain ethical responsibilities, such as the requirement to do no harm to customers, are shared by all for-profit businesses. But the pharmaceutical industry also has ethical responsibilities that are unique, because prescription drugs are not like ordinary goods, and the market for drugs is not like other markets. Among the significant differences between prescription medicines and typical consumer goods, the following are especially noteworthy: (1) doctors, rather than consumers, make the decisions; (2) consumers are at risk for adverse health consequences, if the right medication is not used in the right way; (3) drugs often are paid for, in part, from shared or limited resources (insurance); and (4) physicians often make decisions about prescription drugs without awareness of their costs. The ethical mandate of the pharmaceutical industry has been summarized as a responsibility to provide the public with safe, effective, and affordable medications.¹⁵ This ethical responsibility tends to conflict with the profit motive, and there is a constant temptation in business to allow profit-making goals to trump other responsibilities. Company policies have not always reflected a full understanding of these principles.

The conduct of research with human subjects is governed by ethical principles that are partially enshrined in law, partially in reports and declarations such the Helsinki Declaration and the Belmont Report, and partially in federal guidelines.¹⁶ (All of these are available on the NIH Office of Human Subject Research website: http://ohsr.od.nih.gov/guidelines/index.html.) The three fundamental ethical principles of clinical research are respect for persons, beneficence and justice. These principles should govern the conduct of companies and investigators performing clinical research, but potentially conflict with other responsibilities of the pharmaceutical industry or with the personal interests of the researcher.

For the pharmaceutical industry, the conduct, completion or reporting of certain trials may result in considerable financial losses for shareholders and employees. However, all clinical research is performed to generate and disseminate scientifically valid results. Objectivity and openness are essential to the conduct of good clinical research. The biased reporting of results, inclusion of inappropriate subjects, or failure to complete studies for reasons other than scientifically valid ones are all unethical. They conflict with the principle of respect for the human subject who has participated in the trial with the intention of generating accurate scientific information. They also conflict with the broader responsibility of the pharmaceutical industry to provide the public with safe and effective medications. Nevertheless, there are numerous examples of incomplete or inaccurate reporting of clinical trial results or of suppression of data driven by the subversion of the ethical imperative by the profit imperative. In the most egregious of cases, undue pressure has been placed on investigators in order to prevent reporting of adverse events.

Similarly, conflicts of interests can affect investigators and their institutions.¹⁷ Many, if not most, clinical investigators have financial links to pharmaceutical companies where they serve as consultants, work on speaker bureaus, or own stock. Such financial dependence has been criticized and may contribute to biased reporting. Financial incentives provided for enrollment on studies have led in some cases to accrual of inappropriate study subjects or to undue pressure on subjects to participate in studies. Financial conflict of interest also can extend beyond personal financial benefits. Many academic clinical researchers depend on industry support for the financing of their research operation. Considerable benefits to their professional career result from being chosen to present results from trials at regional, national or international meetings. Challenging or refuting the results of industry-supported research can result in loss of future contracts, inability to maintain research operations and loss of visibility and professional stature. Individual investigators have been accused of lack of involvement and oversight in analysis of data and preparation of manuscripts and, thus, contributing to incomplete or biased reporting. Academic institutions also depend on industry support, and there have been cases of individual investigators being pressured by their institution when conflicts with pharmaceutical companies arose. A special conflict of interest arises when the clinical investigator has a personal interest in the development of a particular product. This is often the case with early trials of innovative treatments developed by NIH-sponsored researchers and tested by start-up companies. The emotional, intellectual and financial stakes for the investigator can then be enormous and can lead to major errors in judgment. Despite the best efforts of investigators and regulators, it is often more feasible to manage conflict of interest (COI) than to avoid it altogether (COI definitions being at least partly subjective and difficult to define precisely)—the methods for managing the appearance or actual COI are customized for the type of trial and specific investigator-institution-sponsor arrangement.

Several professional societies have issued statements and policies addressing these issues. The Association of American Medical Colleges (AAMC) issued a two-part statement in 2001 and 2002 on “Protecting Subjects, Preserving Trust, Promoting Progress,” and the International Committee of Medical Journal Editors issued a statement on clinical trial registration in 2004.¹⁵ The AAMC statements focus on financial COIs of the individual clinical investigator and medical centers. They emphasize the fact that institutional financial interests, as much as those of an individual investigator, may threaten a study. They go well beyond the requirement for full financial disclosure of investigators and recommend that individuals who hold a financial interest in a particular area of research should not be involved in clinical research in that area. The policy adopted by the International Committee of Medical Journal Editors addresses the issue of selective reporting of trials. It states that “honest reporting begins with revealing the existence of all clinical trials, even those that reflect unfavorably on a research sponsor’s product.” It requires that, as a condition of publication, a study be registered in a public trials registry prior to publication.

The pharmaceutical industry (PhRMA) has promulgated its own code of principles on the conduct and reporting of clinical trials. It is not as stringent in its requirement for disclosure of conflict of interest or rules for participation. There is a commitment to the communication of meaningful results of clinical trials, regardless of outcome. This commitment is in line with the intentions of the statement by the International Committee of Medical Journal Editors. However, there is no commitment of submission of manuscripts to a central database and there is an explicit assertion of ownership and control of data and publication.

While few argue that the collaboration between industry and medicine is not important for the development of medical science and the furthering of health care, there is also a growing recognition that both professions would benefit from strict adherence to their ethical mandates. First and foremost, physicians are supposed to be advocates for their patients. In the long run, both industry and clinical researchers are well served by the avoidance of bias, or the appearance of it, and a commitment to openness in the dissemination of results. The best way to arrive at these lofty goals is a matter of ongoing debate. There is an agreement on the necessity of declaring COIs, but there is no agreement on what constitutes a permissible degree of conflict of interest. Also, the important matter of complete reporting of data remains incompletely addressed. Some have argued that current regulations are stifling innovation and have no benefit for subjects or the public.¹⁸ 

Acknowledgments

Contribution: KAM, KVB and DJP contributed equally to researching and writing the paper.