U.S. Auditors Probe Fund Use by UCSD Scientists

Federal auditors are investigating allegations that four scientists at UC San Diego with close ties to two private biotechnology firms may have mishandled federal research grants valued at hundreds of thousands of dollars each.

Federal and university officials said Wednesday that auditors from the National Institutes of Health are in La Jolla looking into five grants made to top scientists at UCSD’s Cancer Center and burn center and into two San Diego firms, Idec Inc. and Clonetics.

NIH officials declined to reveal the nature and sources of the charges made to NIH against the scientists--Dr. Ivor Royston and Dr. Mark Green of the UCSD Cancer Center; Dr. John Hansbrough, director of the San Diego County burn center at UCSD Medical Center, and his colleague, Steven Boyce.

“The only thing the NIH is saying is that they are here to perform a preliminary review,” said Miles Bowler, UCSD’s audit director. “ . . . But in terms of what they wanted to look at, what relationships, if conflict is involved, that sort of thing, they didn’t really bring that up.”

University officials said they are cooperating with the NIH inquiry. They said there has been no UCSD investigation into the allegations.

The grants under scrutiny include a $143,869 grant to Royston to develop monoclonal antibodies for cancer detection and treatment, and two grants to Green, valued at $142,743 and $429,000, for cancer and leukemia research, NIH and university officials said.

Also under investigation are two grants to Hansbrough for research involving trauma and burn patients valued at $442,600 and $384,596. The fourth researcher named by the auditors is Boyce, an assistant adjunct professor of surgery who works with Hansbrough.

Bowler said the auditors also named two firms: Idec Inc. and Clonetics.

Founded by Royston

Idec, which was co-founded last September by Royston and others and employs Green as a clinical adviser, is developing monoclonal antibodies to treat cancers and disorders of the immune system, according to its president, William Rastetter.

Clonetics, co-founded by Boyce in March, 1984, is developing synthetic skin for burn patients. Its president, Michael Luecke, declined Wednesday to comment on a report in the San Diego Union that Boyce and Hansbrough recently stepped down from the board of directors.

“We’re squeaky clean and I’m very happy to collaborate with anyone in verifying that,” said Rastetter. He said the firm had “received no funds from the university or university-administered NIH grants.”

“Somebody called the NIH with allegations which are totally false,” said Royston, who runs the clinical immunology program at the UCSD Cancer Center. “I’m incensed about it. It’s . . . harassment.”

Royston, who is also co-founder of Hybritech Inc., the largest biotechnology firm in San Diego, said he is “very experienced” in the area of conflict of interest and “I try to do everything aboveboard.”

Green released a statement through the university stating that he was “unaware of any improprieties relative to my grants” and intended to cooperate in the probe. Hansbrough could not be reached Wednesday for comment.

The two NIH auditors arrived on the campus Monday and asked administrators to be allowed to interview the principal researchers on the grants and to review the grants’ supporting documentation on file with the university, Bowler said.

“They didn’t focus on any one thing,” he said. “They said there had been allegations made, they were here to do the review. . . . We’re very concerned as to what results come out of the preliminary review.”

“The only thing I can tell you is that (the auditors) are there and we’re doing some preliminary work at the school,” said Howard Hyatt, director of NIH’s division of management, survey and review in Washington.

15 Investigations

Hyatt said his 14-member office is NIH’s “trouble shooter,” checking out all allegations of misuse of funds. He said the office completed about 15 similar investigations in 1986. Approximately half of all such probes result in substantiation of charges, he said.

NIH is a research branch of the U.S. Department of Health and Human Services.

Frank Cver, assistant vice chancellor for financial services at UCSD, said he could recall only one other instance in the past decade that NIH auditors had come to UCSD to investigate charges levelled against researchers.

Hyatt said he hoped that the auditors would complete their preliminary questioning by the end of the week, but said such investigations could last as long as a year. Royston said he was scheduled to meet with the auditors today.

According to Rastetter of Idec, Royston has received federal funding for human trials of a type of cancer treatment called anti-idiotype antibodies. Rastetter said Idec fabricates the antibodies and supplies them free of charge to the university for Royster’s study.

Rastetter said Idec hopes eventually to market the product. Human trials of its efficacy--a precursor to approval by the Food and Drug Administration for sale--are currently being conducted at UCSD, Stanford University and in Seattle, he said.

Rastetter said the NIH and other agencies are fully aware of the arrangement between UCSD and Idec. He said the university’s conflict of interest committee was also fully apprised of Royster’s relationship with Idec.

Disclosure Regulations

“It’s very important to understand that the United States has probably the most efficient and certainly the most productive health care development process in the world,” Rastetter said. “And the delivery of health care has come about in the U.S. through a very cooperative effort between industry . . . and academia.”

Under state law and university regulations, researchers are required to disclose any financial interest they might have in a private firm funding their research, said George Himel, the university’s conflict-of-interest coordinator.

Himel said a committee of six faculty members at UCSD reviews all such “positive declarations.” The committee considers whether the research is compatible with the university’s role and function as a place of academic research.

“Under the law, there is nothing illegal per se about having a conflict,” said one faculty member. He said it is illegal not to report it or to conduct inappropriate research, such as product testing.

Himel said the committee and its two-member staff might monitor research by a scientist who has declared a conflict or has an apparent conflict. He said the researcher must disqualify himself from decisions that directly affect his financial and university obligations.

Peer Pressure

“Peer pressure is something that we must recognize,” said Himel. “It’s there, and that’s what makes this place function. Nothing comes out quicker than bad research.”

The NIH investigation is the second probe at a UC campus this year.

In July, UCLA officials revealed that a prominent professor was the subject of an investigation by the state auditor general’s office into the transfer of the rights to a potentially profitable procedure developed at the university to the professor himself for manufacture.