Charles B. Nemeroff, the former School of Medicine psychiatry chairman, left the administrative post he held for 17 years after an internal investigation determined $800,000 in unreported outside income, a violation of University and federal conflict of interest policies, the University announced Dec. 22.

Though Nemeroff will continue in his teaching post, he will be barred from participating as an investigator on any National Institutes of Health (NIH) or other sponsored research grant for a two-year period. In the fall of 2010, the University will re-evaluate his eligibility for research grant applications.

Nemeroff’s compensated external activities, such as speaking engagements, will also be subject to more stringent restrictions. The specific guidelines, mostly calling for pre-approval by various offices, proper disclosure of payments and limitations on industry relationships, were outlined in a Dec. 22 letter from Emory to the NIH. Nemeroff declined to comment.

The investigation, headed by Executive Vice President of Academic Affairs and Provost Earl Lewis, was launched in the early fall after Sen. Charles Grassley (R-Iowa), the ranking Republican on the Senate Finance Committee, alleged that Nemeroff had neglected to disclose a substantial amount of fees paid to him by pharmaceutical companies and device manufacturers for consulting activities and speaking fees.

Nemeroff had previously served as a primary investigator on a joint grant involving Emory, pharmaceutical giant GlaxoSmithKline (GSK) and the NIH. NIH mandates that universities require grantees to disclose financial relationships exceeding $10,000 in payment or a 5 percent ownership.

Focusing on documents from January 2000 to January 2006 provided by GSK, the largest single payer and “most forthcoming with information,” Emory General Counsel Kent Alexander’s office led the fact-finding phase of the in-house investigation and concluded that NIH policies had been violated, University President James W. Wagner said.

A majority of the unreported income came from speaking fees, Wagner said, but a review of lecture slides and interviews with presentation attendees have corroborated Nemeroff’s claim that these financial violations did not affect his research or judgment regarding patients.

After the general counsel’s office spelled out a range of possible actions that could be considered, a team consisting of Wagner, School of Medicine Dean Thomas Lawley and Executive Vice President of Health Affairs Fred Sanfilippo determined what the next steps would be.

“Most important to us was fairness, and also to make a statement of integrity and to make sure we put safeguards in place to protect Emory researchers from the temptation or even appearance of conflict of interest,” Wagner said.

Preserving the public trust and the value of work that Emory faculty can contribute to society, Wagner said, were also of utmost importance, adding that “there are very few institutions as trusted as universities.”

In a Dec. 22 announcement, Grassley commended Emory’s prompt action and reiterated the importance of “accurate disclosure and transparency.”

“Emory’s swift and sure-footed response sets an example for other research institutions to follow and for the National Institutes of Health to hold up as the kind of standard it expects from all those receiving federal research dollars,” Grassley said in the statement.

Wagner said that despite the violations, Nemeroff has indisputably made invaluable contributions to the psychiatry department and to the field as a whole.

“[Nemeroff] belongs at a research university ... if we are able to take steps to recover and make sure mistakes are not repeated, we want him to be at Emory’s university health center,” Wagner said. “He has not changed his commitment to the students, department and patients.”

Wagner said this ordeal has prompted the University to re-examine its “policies, practices and culture” to make sure that “less of these episodes occur in the future.”

A centralized office administered under Vice President of Research Administration David Wynes was created in October to oversee and enforce Universitywide conflict of interest compliance in research. In November, Wagner also appointed Paul Root Wolpe, director of the Center for Ethics, to head a commission tasked with reviewing the University’s management of conflict of interest issues on campus.

Wagner said the conflict of interest office is currently considering whether any of the restrictions outlined in the letter to the NIH should be made applicable to all faculty as a way of safeguarding the institution.

“Our intent and hope is that [Nemeroff’s] brilliance with students and patients will continue to be expressed and that this episode will be put behind us swiftly,” Wagner said.

—Contact Tiffany Han.