During the January 22 ORD Hotline call, Chief Research and Development Officer Joel Kupersmith, MD, stated, “We are beginning to see some daylight” in regard to CRADAs. He then turned the mike over to Technology Transfer Program (TTP) Director Amy Centanni who reported on recent developments including:

• The December 15 recommendations of the VHA/OGC team appointed to review the CRADA situation will be published “in the next few weeks.” When available, they will be sent to research ACOSs and AOs, and to NPC contacts.

• OGC responsibility for research-related technology transfer has been moved to Professional Staff Group (PSG) III which is under the direction of Assistant General Counsel Walter Hall. NAVREF note: This is the PSG already responsible for interpretation of the NPC authorizing statute and most other NPC-related matters.

• TTP and PSG III staff met last Friday. Ms. Centanni reported that they “are on the same page in seeing the way ahead” and will “meet weekly until things are worked out.”

• The processes previously established for master, model and single study CRADAs will be changing over the next few months.

• Questions should be directed to amy.centanni@va.gov or jeffrey.moore@va.gov

In closing, Ms. Centanni expressed confidence that “new processes will allow us to move forward.” Subsequently, she confirmed that the CRADA Work Group will be re-constituted shortly.

NAVREF sincerely hopes that shortly there will be master CRADAs with the major pharmaceutical companies and workable models for single study CRADAs, and that NPCs will never need to negotiate another clinical trial agreement. However, until we reach that state of Nirvana, NPCs must ensure that they are not signing off on inappropriate clinical research agreement (CRA) terms.

During this interim time, please read draft CRAs carefully and follow the guidance on the NAVREF web site at http://www.navref.org/archive2006/Legal_Resources_default_030806.htm. We cannot stress too strongly how important it is for NPCs to consider very carefully any documents being executed, especially with respect to committing VA to anything, management of IP, and conditions regarding use and disposal of biological specimens.

For example, it was recently brought to NAVREF’s attention that some NPCs may have signed off on the following:

Institution [NPC] is responsible to Sponsor for the Study Site's [VA’s] acts and omissions in regard to the conduct of the Study, to the same degree as Institution would be responsible to Sponsor for Institution's own acts and omissions.

By agreeing to this language, an NPC is essentially assuming full liability for the conduct of the study much of which is out of the direct control of the NPC and is VA’s responsibility. An NPC offered such a clause should explain the NPC/VA relationship and the advantages of FTCA coverage. An NPC may also wish to offer the sponsor a letter attesting to R&D Committee approval of the study for performance at the VAMC and signed by the ACOS/R. Sample letters are available on the NAVREF web site at http://www.navref.org/legal/researchagreement_sampleclauses_notes.htm See Clause 15.

As discussed during the NAVREF Annual Conference, auditors from the Financial Assistance Section of the Office of the VHA Chief Financial Officer (Austin, Texas) are proceeding with administrative reviews of three NPCs. After a week in December with the Institute for Medical Research (IMR) in Durham, the auditors are spending this week with the Seattle Institute for Biomedical and Clinical Research (SIBCR). They will spend the week of February 5 with the Northern California Institute for Research and Education (NCIRE). VHA has not shared its reasons for selecting these three for the reviews, but NAVREF is confident they are ably representing the NPCs as whole. After all the site visits are complete, it is expected that the auditors will prepare a report for the VA Nonprofit Oversight Board that is chaired by Acting Under Secretary for Health Michael Kussman, MD.

Separately, the VA Office of the Inspector General is collaborating with Department of Defense auditors on a criminal investigation of embezzlement of a DOD grant administered by an NPC. This has raised concerns among high level VA personnel about management of the NPCs overall, and it is likely that NPCs are entering a new era of scrutiny. All NPCs should take steps now to ensure that they are prepared. NAVREF encourages NPCs to use the Self-Assessment Tool linked at http://www.navref.org/bestpractices/om_main.htm to identify any management weaknesses and to take prompt corrective action.

NPC internal controls – primarily segregation of financial duties – are of particular concern to VA overseers. This can be difficult for organizations with small staffs, but by enlisting board members, and working with accountants and auditors, satisfactory controls can be implemented. NAVREF has proposed joint VA/NAVREF training in this area for NPC staff and boards, and we are awaiting VA approval.

In the meantime, NPCs are encouraged to review their internal controls and to establish written procedures for segregation of duties and financial oversight. A quick checklist of questions to test the adequacy of your internal controls has been added to the NAVREF web site. Additionally, all NPCs should have a crime insurance policy (also sometimes called “fiduciary bond”) so there will be no loss to the NPC should a theft occur despite taking reasonable precautions. NAVREF has added new materials, including internal control checklists of varying levels of sophistication, to its internal controls web page. Please go to http://www.navref.org/library/internal_controls.htm

NAVREF, its designated insurance broker, Mary Anne Hughes-Creech of JZA, Inc., and the Chubb Group of Insurance Companies have reached agreement on a special NPC amendment to the Chubb ForeFront Portfolio, an insurance policy that combines in one package directors and officers (D&O) liability, entity professional liability, employment practices liability and crime coverage.

The special NPC amendment provides that persons named to direct an NPC-administered research or education program will be covered for purposes of employment practices liability (EPL) suits. This solves the longstanding problem that Principal Investigators (PIs) and other VA employees working on NPC-administered programs are neither NPC officers, directors, employees nor volunteers and as a result do not meet the typical definition of “insureds” in such policies. The consequence is that employment practices suits involving PIs and other VA personnel could be excluded from coverage. Because PIs often supervise NPC employees, this has been a problematic gap in coverage. A sample version of the amendment is posted on the NAVREF web site at http://navref.org/about/word/Insurance_Chubb_EPL_NAVREF_Amendment.doc

NPC clients of JZA that have already purchased the Chubb Forefront policy will be issued the new amendment shortly. Future Chubb Portfolio policies issued to NPCs by JZA will automatically include it although NPCs are encouraged to review their policies in detail to make sure that it has been issued and that the policies otherwise meet their needs. Also, please be aware that the special NPC amendment affects only the EPLI section of the policy.

Many thanks to Donna McCartney, Mary Thornton, Patricia Grice, Eileen Lennon, PhD, Jude Harlan and Kerstin Lynam for their assistance in reaching this very positive outcome. NAVREF also thanks Chubb for working with NAVREF and JZA to develop mutually satisfactory wording for the amendment.

At NAVREF’s request, employment law attorney and frequent NAVREF conference speaker Manesh Rath, Esq., has been added to the roster of attorneys to whom Chubb refers employment practices suits involving policyholders.

Any NPC that holds a Chubb EPLI policy and is named in such a suit may request Mr. Rath as their defense attorney. However, should Mr. Rath be required to travel in order to handle the suit, an NPC requesting his services, rather than those of a local attorney, may be required to cover his travel expenses. Besides being highly knowledgeable and a pleasure to work with, Mr. Rath is already familiar with the NPCs and their unique VA and employee relationships. As a result, there are likely to be advantages in engaging Mr. Rath in the event of an EPL suit.

A new OGC opinion has been added to the compendium on the NAVREF web site at http://www.navref.org/legal/pdf/OGC_Opinion_EES_Use_of_Research_Corporation_Money_12-01-2006.pdf This opinion holds that an NPC may use funds donated to meet training needs identified by VA’s Employee Education Service (EES) and that the training may be made available to employees at other facilities. The request for the opinion was triggered by uncertainty whether an NPC may support training activities that benefit VA personnel at the VAMC where the NPC is located as well as at other VAMCs.

Nonprofit best practices dictate that the board of directors should review and approve the organization’s annual IRS information return; that is, IRS Form 990 and accompanying schedules. As NPCs undergo audits and their accountants prepare their Form 990, NAVREF is receiving questions asking how board members can conduct a meaningful review when they are unlikely to be intimately familiar with the amounts reported. In response, NAVREF has developed a series of questions board members may use to reassure themselves that the 990 has been completed fully. To view the questionnaire, go to http://navref.org/library/word/Board_990_Review_Guidance.doc

FDAinfo of Leesburg, Virginia, (http://www.fdainfo.com/) is an Internet resource for FDA documents and other regulatory news and information pertaining to clinical studies. FDAinfo publishes newsletters of interest to both sponsors and clinical study sites, and offers on-line briefings on selected compliance topics.

BioResearch Compliance Report (http://www.fdainfo.com/bioresearch.html), a monthly hard copy newsletter that also provides subscribers with weekly electronic news updates, may be of particular interest to NPCs and VA personnel because it contains timely announcements of clinical studies as well as progress reports. Go to http://www.fdainfo.com/bioresearch.html to download sample issues of the monthly and weekly updates, or email service@FDAINFO.com for recent samples.

NPCs interested in purchasing a subscription to BioResearch Compliance should send an email to publisher@FDAinfo.com. If you identify yourself as a NAVREF member, you will receive a discounted rate of $500.00 for the first-year subscription, $165 less than the normal nonprofit rate.

To explore obtaining a corporate subscription license that allows electronic distribution to personnel associated with your NPC and VAMC, also contact publisher@FDAinfo.com or call 703-779-8777 or 800-776-5105 and ask to speak to Ken Reid. Note: FDAinfo reports that some VA medical centers are already subscribers. To avoid duplicate subscriptions, check with your VAMC library.

Many thanks to Nancy Watterson, executive director of the Boston VA Research Institute (BVARI) for bringing FDAinfo to the attention of NAVREF.

NAVREF is taking a temporary leave of absence from the executive committee of the Friends of VA Medical Care and Health Research (FOVA). NAVREF has been a leader in FOVA activities since its inception so this was a difficult decision made by the NAVREF board in November. However, the board agreed that NAVREF’s priority for the present must be resolving the CRADA situation. Additionally, the board is considering working with VA and Congress to update and clarify the NPCs’ authorizing statute which in itself will be a major undertaking.

NAVREF is confident that the remaining members of the FOVA executive committee will ensure that FOVA remains an effective advocate for the annual VA Medical and Prosthetics Research appropriation. Additionally, Ms. West has worked with the VSOs that are responsible for the Independent Budget, and the Federation of Scientists in Experimental Biology, to ensure a smooth transition. NPC and VA research personnel interested in receiving timely FOVA alerts and updates on appropriations may sign up at http://www.friendsofva.org/

Please mark the following NAVREF Annual Conference dates on your calendar and plan to attend!

Location: Marriott Crystal City at Reagan National Airport (same hotel as 2006)
2007: Sunday, November 4 through Wednesday, November 7
2008: Sunday, October 19 through Wednesday, October 22