Medical School’s Woes Linked to Ethics : Minnesota: Accusations fly amid talk of fraud, embezzlement, conflicts of interest and the lure of profits arising from medical research and treatment.

Accusations of embezzlement, fraud and conflict of interest might seem likely ingredients for a tale of government corruption or corporate scandal--but not for a story about a medical school.

Volleys of such allegations have been fired at the University of Minnesota medical school in recent months, tarnishing the reputations of prominent researchers and raising broader questions about the financial ethics of medical research.

Although they’re not directly connected, the cases share a common thread--the lure of profits, sometimes reaching into the millions of dollars, produced by medical research and treatment.

“There’s a systematic crisis at the heart of biomedical research,” said medical ethicist Arthur Caplan, a member of the University of Minnesota medical school faculty. He cited the rapidly expanding potential for profit and what he says is a lack of clear conflict-of-interest policies.

At Minnesota, the most prominent victim has been Dr. John Najarian, a pioneering transplant surgeon who gained international fame in 1982 when he performed a life-saving liver transplant on young Jamie Fiske.

Najarian resigned in February as chairman of surgery amid allegations that a university program he established ignored federal regulations in manufacturing an anti-rejection drug used in organ transplants.

Najarian, who was not accused of personal wrongdoing, still performs surgery and teaches at the school.

At one time the university earned $10 million annually selling the drug, Minnesota Anti-Lymphocyte Globulin, or ALG, to 150 transplant centers. The FBI and the university are investigating claims that university officials failed to get federal approval for the sale of the drug.

The former director of the program, Richard Condie, was fired last September after an audit found he pocketed $62,000 from the sale of an ALG byproduct.

Days after Najarian’s announcement, the university’s top health sciences official, Robert Anderson, also said he would step down to return to teaching.

“I just do not want to devote the rest of my career to dealing with court cases and controversies,” he said.

Other recent controversies over research and alleged wrongdoing:

* University psychiatrist Barry Garfinkel was indicted in February on federal charges that he faked research on a drug used to treat obsessive-compulsive patients. Garfinkel’s attorney said the psychiatrist didn’t profit from the alleged oversights and that he was being victimized by a former associate seeking to conceal her own misconduct.

* The Food and Drug Administration claimed that the university produced a kidney transplant preservative without required federal approval. The university said the medical school stopped producing the preservative “some time ago” and has assured the FDA that it won’t resume production until it receives approval.

* The FBI is investigating allegations that $260,000 was embezzled from a bank account used to pay sperm donors.

* An accountant in the medical school claimed she was asked to alter records so physicians could receive larger payments than the university permitted for treating patients. The school has ordered an audit to investigate the claim.

“The impression of the public is the whole university has gone to pot,” said M. Elizabeth Craig, a physician and a member of the university’s board of regents.

Cases of research misconduct are relatively rare, said Thomas Morford, acting deputy director of the U.S. Office of Research Integrity.

But conflict-of-interest cases, in which researchers have a vested interest in the products being studied, are growing, said Dr. Arnold S. Relman, a Harvard University medical professor and editor-in-chief emeritus of the New England Journal of Medicine.

“It’s becoming increasingly troublesome and pervasive because of the growth of biotechnology. Many schools have been slow to move,” Relman said.

To get a handle on the problem, the University of Minnesota administration is auditing the entire medical-health science complex. The medical school alone has 800 full-time faculty members and a $228-million annual budget.

“The central administration has had little or no oversight,” Craig said.

Centralized control is just what most medical schools need, said Suzanne Hadley, a former deputy director of the federal Office of Scientific Integrity (now known as the Office of Research Integrity).

Deans often are only nominally responsible for investigations, she said. Often they appoint faculty members to review or investigate their colleagues, a procedure known as peer review.

“I think a much better procedure is to have a senior official who is active in the investigation and accountable to the highest level of the institution. The institution must take responsibility for the findings,” Hadley said.

At the University of Minnesota, President Nils Hasselmo has ordered an outside review of the medical school’s management.

“It is my impression that Minnesota is making an effort to be rigorous, even at the loss of somebody (Najarian) who was not guilty of fraud in anybody’s definition,” said Deborah Runkle, senior program associate with the American Assn. for the Advancement of Science.