The recent appointment of a high-ranking Duke University healthcare official to the board of medical-device maker Medtronic, Minneapolis, has been well-vetted and poses no conflicts of interest for the university, according to officials at both organizations.
Victor Dzau, president and chief executive officer of Duke University Health System and chancellor of the schools Health Affairs division, will be paid $80,000 annually plus stock-option grants at the beginning and end of each fiscal year throughout his tenure on the board, according to documents filed by Medtronic with the Securities and Exchange Commission. Hell also receive a one-time grant of 3,269 shares of common stock valued at roughly $160,000 upon beginning his duties.
Dzaus board appointment comes at a time when increased scrutiny is being given to such relationships between representatives of medical institutions and healthcare-products companies such as devicemakers. Late last month, for example, the Association of American Medical Colleges and the Association of American Universities issued a joint report that called on all medical schools and research universities to implement substantive financial conflict-of-interest policies within the next two years. Both Duke and Medtronic representatives said Dzaus appointment does in fact follow a strict conflict-of-interest policy put in place by the university as well as corporate-governance standards issued by the New York Stock Exchange.
Mike Somich, chairman of Dukes administrative conflict-of-interest committee and executive director of internal audits, said that university officials considered both Dzaus personal relationship with Medtronic and the universitys relationship with the company before approving the board appointment. We looked at whether we had any current research relationships with Medtronic and what our purchasing relationship is with the company, Somich said. Clearly we purchase a lot from Medtronic, but the purchasing decisions are made several layers below Victor. He has no direct hand in it.
Somich could not say whether Duke currently has any research projects being funded by Medtronic, but he said that Dzau would have no direct influence on the schools execution of or decision to accept such projects. Those decisions are made by the deans of various divisions, and (Dzau) has agreed to recuse himself from any of these discussions either at the school or as a Medtronic board member.
In an e-mail, a Medtronic spokeswoman said the devicemaker follows NYSE guidelines for maintaining director independence. The guidelines cap Medtronics payment to Duke at 2% of the hospital systems total revenue.