Dealing with conflicts of interest

By Wong Yu-feng 翁裕峰  / 

Sat, Jan 21, 2017 - Page 8

Following the indictment of former Academia Sinica president Wong Chi-huey (翁啟惠) by the Shilin District Court on Monday, I read the law that Wong allegedly violated and the evidence listed in the indictment; and I had to sadly approve of the indictment. Taiwan is still a long way from eliminating the injustices caused by conflicts of interest in the biotech industry.

The section about disclosing conflicts of interest in the Fundamental Science and Technology Act (科學技術基本法) is nothing but a hollow shell, as it allows each research institution to set internal regulations that are beneficial to itself.

This is in stark contrast to the US’ conflict of interest policy, which is concretely set down in substantive regulations. Only by completely overhauling the conditions regulating the disclosure of conflicts of interest will it be possible for these talented people to freely develop their skills.

In January last year, former Academia Sinica vice president Chen Chien-jen (陳建仁), who advocated for the passage of the Act for the Development of Biotech and New Pharmaceuticals Industry (生技新藥產業發展條例), was elected vice president alongside President Tsai Ing-wen (蔡英文).

On Jan. 28 last year, soon after their election, I wrote an article about the Fundamental Science and Technology Act, which was amended following a 2010 biotech case involving Academia Sinica.

I pointed out that the articles on the disclosure of conflicts of interest aimed at promoting cooperation between industrial and academic circles were completely different from federal legislation in the US and regulations at Stanford University.

The act does not establish a national system for reporting conflicts of interest and establishes no clear regulations requiring the disclosure of specific information to prevent conflict of interest. Instead, it authorizes individual institutions to write and execute their own conflict of interest policies.

As a result, I urged Chen to discuss, establish and implement a national policy addressing these shortcomings.

It was only two months later that questions arose about conflicts of interest in Wong’s dealings with the biotech company OBI Pharma. The main focus of attention was on Wong’s daughter’s selling of her OBI Pharma shares immediately before the company released news that one of its products had failed a blind test and that Wong had not reported to Academia Sinica that his daughter was a shareholder of the company.

After a year-long investigation, the prosecutor found that Wong had not been involved in insider trading, but indicted him on charges of corruption, believing that OBI Pharma gave shares to Wong’s daughter in exchange for Academia Sinica’s patent on next-generation synthetic oligosaccharides technology.

The scandal has not only been a serious personal blow to Wong, but also for Taiwan’s biotech industry, where Wong, an internationally recognized authority on synthetic oligosaccharides technology, has been a leading figure.

How did the system for reporting conflicts of interest fail to protect the world-famous biotech star from the scandal?

This story has to be approached from the perspective of the amended Fundamental Science and Technology Act, which places practical control of conflicts of interest completely in the hands of individual research institutions.

Academia Sinica has drawn up and promulgated Academia Sinica Principles of Avoiding and Managing Conflicts of Interests in Technology Transfers.

In accordance with the Act on Recusal of Public Servants Due to Conflict of Interest (公職人員利益衝突迴避法), Article 3 of the 2006 draft of the Academia Sinica principles clearly defines “[r]elatives of the public servant by the second degree of kinship” as “related persons of a public servant” and stipulates that any conflict of interest with such people must be disclosed.

Academia Sinica’s human resources department also issued an article that quotes the Civil Code, saying that children of civil servants also belong to this group and must submit a conflict of interest report.

In August, 2012, the institute’s conflict of interest regulation was passed, and in January 2013, a disclosure form was announced, but children of civil servants were listed as not required to submit such a form.

This is in blatant violation of the original draft and interpretation of “relatives ... of the second degree of kinship” by the human resources department.

In March and April 2012, an investigation at OBI Pharma’s parent company in the US found that its Taiwanese daughter company had inappropriately given US$300,000 to a research lab in July 2011, and that staff at the lab were connected to a gift of OBI Pharma shares.

In September that year, OBI Pharma tried to give its chairman, Michael Chang (張念慈), 1.5 million technology shares.

The company’s US parent launched the investigation because it felt that these two events were in violation of the US’ Foreign Corrupt Practices Act and other related legislation.

While prosecutors brought charges against Wong for having received shares about a year after these events, coincidentally, the way the shares were obtained and the number of shares were identical to what the US parent company had found in its investigation: One-and-a-half million tech shares in OBI Pharma, and 3 million shares in OBI Pharma received in 2012.

One of the reasons that the system has become distorted is because the enabling act provides no concrete regulations. A second reason is that there are no requirements that managers at an individual institution disclose conflicts of interest to their superiors. A third reason is that the shares had been obtained after the draft regulations had been issued by Academia Sinica, but before the disclosure form had been created.

A national system for the disclosure of conflicts of interest needs to be stipulated in the Fundamental Science and Technology Act as soon as possible to enable researchers to have a clear understanding of which is more important of research interests and the financial interests resulting from technological transfers.

If this is not done and individual research institutions continue to be allowed to set their own regulations, the continuing research cooperation between Academia Sinica and OBI Pharma into oligosaccharides implies a risk that yet another top-level biotech researcher at Academia Sinica will go on to repeat the same mistake.

Wong Yu-feng is an assistant researcher at National Cheng Kung University’s Center for Humanities and Social Sciences.

Translated by Tu Yu-an and Perry Svensson