Research finds significant overlap between company boards and academia

Almost 10 percent of healthcare company board positions are held by academics from many of the top-ranked U.S. medical and research institutions, revealing the potential for significant conflicts of interests. 

The authors of the study published in BMJ analyzed the prevalence, characteristics and compensation of company directors who also hold academic positions. They looked at healthcare companies that specialize in pharmaceuticals, biotechnology, medical equipment or healthcare services, and were publicly traded on the NASDAQ or New York Stock Exchange in 2013.

In total, 279 healthcare company directors were affiliated with 85 non-profit academic institutions. The academic institutions included 19 of the top 20 National Institute of Health-fundedmedical schools, and all 17 of the U.S. News Honor Roll hospitals.

These directors received cash compensation totaling $54,995,786. Salaries often approached or surpassed common academic clinical earnings, and on average they each received annual payments of $193,000 as well as significant stock options, the authors noted.

The U.S. Physician Payments Sunshine Act requires the reporting of payments to physicians and academic medical centers by pharmaceutical and medical device companies. The act does not, however, mandate separate reporting of payments to those serving as a company director.

Led by Timothy S. Anderson, MD, chief medical resident at the University of Pittsburgh Medical Center's Department of Internal Medicine, the researchers found 442 companies with publicly accessible disclosures on boards of directors and 41 percent of those included at least one director with an academic affiliation.

The full scope of relationships between academia and this sector's boards of directors most likely is underreported, the authors wrote, because large foreign private companies and small start-up businesses were not included.

"There are potential benefits to having greater representation of the non-profit healthcare sector in the corporate board room, and academic institutions may directly benefit from their leaders, professors and trustees developing management skills and forging fundraising or research partnerships," the authors wrote. "However, these same director qualifications and connections can be the source of conflicting interests which have not been fully addressed by professional societies or academic institutions and deserve additional review, regulation, and in some cases, prohibition when conflicts cannot be reconciled."

"No one seeks to demonize industry" because "academy-company cooperation is necessary for medical progress," wrote David Rothman, PhD, of Columbia College of Physicians and Surgeons, in a linked editorial. However, he argued that the compensation sums are "unsettling" and "although it may seem radical, excluding leaders from directorships is the only credible policy."