A Conflict of Interest: University President and Johnson & Johnson Board Member
It turns out, though, that this initative has provoked debate on that campus, not so much about its possible benefits and harms, but about whether the Ms Coleman's promotion of it had to do with a conflict of interest. The debate broke out with an op-ed in the Michigan Daily:
It’s clear, then, that University President Mary Sue Coleman is the architect of the Smoke-Free Initiative, which will take effect in July of 2011. The initiative will prohibit smoking on all outdoor University property. Coleman and University administrators have been embarrassingly vague about why such a ban is necessary. Instead, they keep insisting that the smoking ban will improve public health.
Interestingly enough, the smoking ban may also improve Coleman’s salary.
That’s because Coleman isn’t just a college president. In her spare time, she moonlights as a businesswoman, sitting on the board of directors for major pharmaceutical company Johnson & Johnson, as well as the Meredith Corporation, a magazine publisher. According to Forbes.com, her position at Johnson & Johnson netted her an income of $229,000 last year.
Among Johnson & Johnson’s many marketed brands are smoking cessation products like Nicorette and Nicoderm — products that University smokers will feel encouraged to use once smoking becomes unwelcome on campus in July 2011. Indeed, administrators have already announced that smoking cessation products may be offered at discounted prices to students who are trying to quit.
Obviously, this is a sizeable conflict of interest for Coleman. Even if her Johnson & Johnson salary didn’t actively influence her decision to ban smoking, it makes it substantially harder to take her at her word that the University needs this ban — especially when representatives of her administration can’t come up with a specific reason for it.
But Coleman’s corporate troubles run deeper than this. As the University’s College Libertarians pointed out in a press release this weekend, Johnson & Johnson has an affiliated non-profit group, the Robert Wood Johnson Foundation, which lobbies for the adoption of certain health-related policies through research and grant money. RWJF is notoriously anti-smoking, as its website explains: 'At the state and community level, we support advocacy for proven tobacco control measures, such as smoke-free air laws, funding of prevention and cessation programs and increases in tobacco taxes.'
While it’s no surprise that RWJF would fight for laws that restrict smoking and lead to increased use of Johnson & Johnson products, such an aggressive lobbying force should not hold financial sway over the president of a public university. Students, faculty and staff must be able to trust that their president is working in the best interests of the University community, not a profit-motivated corporation. Even the perception of a conflict of interest is embarrassing for this institution.
And then, in another op-ed in that paper:
Granted, some of Coleman’s reasons for the Smoke-Free Initiative are likely motivated by good intentions like lowering the University’s health care costs. But these justifications are severely compromised by her compensation from a corporation that will likely benefit from the smoking ban. Coleman sits on the board of directors for Johnson & Johnson, from which she earned nearly a quarter of a million dollars in 2009, and holds 11,159 shares of common stock, 10,777 shares of common stock equivalent units and 7,600 exercisable stock options in the company. Johnson & Johnson is the producer of a host of nicotine replacement products, including Nicoderm and Nicorette. Coleman explains, 'the University will offer free behavioral sessions and selected over-the-counter smoking cessation products to faculty and staff, along with co-pay reductions for prescription tobacco cessation medicines (and) discounts on tobacco cessation aids.'
In other words, under the proposed Smoke-Free Initiative, the University would subsidize products made by Johnson & Johnson. The University would purchase more nicotine replacement products, likely resulting in financial gains for Johnson & Johnson and, consequently, Coleman.
In reply, a letter by Dr Robert W Winfield, University of Michigan Chief Health Officer, asserted:
Some have raised concern about the appearance of a conflict of interest between President Coleman’s service on the board of directors of Johnson & Johnson, a company that produces some smoking-cessation products.
Simply put, there is no conflict. Prescription-only drugs for smoking cessation are generally considered the most effective and most widely used. Johnson & Johnson does not make any prescription-only smoking-cessation products.
A report of a meeting of the Michigan Student Association noted:
In a press release and columns in The Michigan Daily, members of the College Libertarians have identified Coleman as having an apparent conflict of interest due to her position on the board of Johnson & Johnson — a company that manufactures and markets smoking cessation products.
Kozack said if the allegations prove to be true, they could have large implications as Coleman is compensated for sitting on the company’s board.
He said the main reason for the resolution and the accusation of Coleman’s conflict of interest is that there is not enough information provided to the whole campus about the origin of the Smoke Free Initiative.
But in defense of President Coleman, the following appeared in the Michigan Capitol Confidential:
The University of Michigan's student newspaper - The Michigan Daily - wrote an opinion piece last week suggesting a conflict of interest involving University of Michigan President Mary Sue Coleman.
Coleman also earned a $230,000 salary in 2009 for sitting on the board of Johnson & Johnson. Alza Corporation, a subsidiary of Johnson & Johnson, markets Nicorette and Nicoderm, smoking cessation products.
Three ethics experts say Coleman is not in conflict.
'She is doing a public health service,' Peter Rost, a former vice president of Pfizer who has testified before Congress on the business practices of drug companies, wrote in an e-mail. 'The possible income by J& J from this campus is completely and utterly negligible and will have no impact on J&J income statement. Same thing if she opened public health clinic for depressed students and happened to sit on board of (a company) selling antidepressants. Conflict of interest should normally have some undue influence on either party. Since that is not the case I'm not troubled.'
Aine Donovan, the executive director of the Ethics Institute at Dartmouth College who teaches business ethics, said she didn't see a conflict.
'This is very reasonable,' Donovan said. 'Johnson & Johnson has a large range of products. This is a very reasonable position she is taking and it is a very laudable one.'
Timothy Keane, director of the Emerson Ethics Center in St. Louis, said it was 'a bit of a stretch' to say Coleman had a conflict of interest.
'Johnson & Johnson is not trying to set up shop and sell something to the University,' Keane said. 'They are not being a supplier to the University. It doesn't matter if you are a smoker or not, research indicates it is bad for you.'
A Hazy Debate
Smoke gets in your eyes. Maybe it should not be a surprise that once President Coleman's relationship with Johnson and Johnson was noted, opponents and proponents of the Smoke-Free Initative used arguments about that relationship to bolster their positions, rather than debating the smoking ban on its merits. The result, however, shows how conflicts of interest seem to always produce confusion, if not smoke and mirrors.
Most of the debate seemed to be about whether Ms Coleman would personally profit from the smoking ban, and if so, how much. For example, the second op-ed above argued, "the University would purchase more nicotine replacement products, likely resulting in financial gains for Johnson & Johnson, and consequently, Coleman." On the other hand, one expert quoted in the Michigan Capital Confidential argued that the income to J&J from the Michigan campus would be "utterly negligible," and another argued that "Johnson & Johnson is not trying to set up shop and sell something to the University."
On one hand, however much use of J&J nicotine replacement products there is at the University of Michigan, the amount is unlikely to change the profits of J&J, or the salaries or values of stock owned by its directors. On the other hand, J&J may not run a retail store at the University, but it is in the company's interest to sell more of all its products on university campuses, and everywhere else.
But in my humble opinion, the issue is not about the degree President Coleman's salary and assets derived from her position with Johnson and Johnson would be affected by a specific policy she may advocate. The issue is whether her judgments and decisions as President could be unduly influenced by her relationship with the company.
Definition of Conflicts of Interest
This provides a good opportunity to review a good working definition of conflict of interest as it applies to medicine, health care and health policy. Last year the Institute of Medicine published a thorough and well-balanced report, Conflict of Interest in Medical Research, Education, and Practice. It defined conflict of interest (p. 6):
Conflicts of interest are defined as circumstances that create a risk that professional judgments or actions regarding a primary interest will be unduly influenced by a secondary interest. Primary interests include promoting and protecting the integrity of research, the quality of medical education, and the welfare of patients. Secondary interests include not only financial interests....Furthermore,
The severity of a conflict of interest depends on (1) the likelihood that professional decisions made under the relevant circumstances would be unduly influenced by a secondary interest, and (2) the seriousness of the harm or wrong that could result from such an influence.But,
a judgment that someone has a conflict of interest does not imply that the person is unethical. Such judgments assume only that some situations are generally recognized to pose an unacceptable risk that decisions may be unduly infuenced by considerations that should be irrelevant.
Thus, a conflict of interest should be seen as a situation which increases the risk of bad judgments or decisions, but does not necessarily cause them, much less cause a particular bad judgment or decision. (Thus, it makes no sense to try to argue, as the experts did above, that because a person made a good decision, he or she does not have a conflict of interest.)
I assert that President Coleman has a conflict of interest. Her primary interests as President of a university are to uphold the university's academic mission, and as President of a university that includes a medical school, a school of public health, and an academic medical center, also to uphold the integrity of patient care and public health practice. Her secondary interest as a member of the board of directors of a public, for-profit corporation is her fiduciary duty to that corporation and its stockholders, which means she must "demonstrate unyielding loyalty to the company's shareholders" [Per Monks RAG, Minow N. Corporate Governance, 3rd edition. Malden, MA: Blackwell Publishing, 2004. P.200.] Such unyielding loyalty to the shareholders of a pharmaceutical and medical device company clearly creates a risk of influencing judgments or actions that could affect the corporations' sales or operations, economic or health policy, or the general environment in which it operates. Many of the judgments of or actions performed by the leader of a medical school, public health school, and academic medical center could so so, and are thus at risk of being so unduly influenced.
However, that she has such a conflict does not prove that any particular judgments or decisions were made badly because of it. Conversely, that particular judgments or decisions were made well does not disprove the existence of the conflict.
So I beg to differ with all the experts cited in the Michigan Capital Confidential article. On the other hand, while the President may have a conflict of interest, it is impossible to tell how or whether this influenced her particular decision to support the Smoke-Free Initiative. Neither does it speak to the benefits or harms of such a policy. The main effect of the President's conflict of interest seems to have been to muddle the debate about the policy.
Conflicts of interests' general tendency to muddle and confuse provide one argument for their elimination. Another is that they may affect judgments and actions that are not so readily debated as, and more likely to produce bad results than smoke-free initiatives. Maybe the hazy debate about the University of Michigan Smoke-Free Initiative will lead to a clearer discussion of whether academic and academic medical leaders should also be corporate leaders.
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