GAO to Investigate PE-Backed Institutional Review Boards

August 25, 2020
Firm Publication

The Government Accountability Office (GAO) has agreed to investigate the operations of for-profit Institutional Review Boards (IRBs) following a request made by Senators Elizabeth Warren (D-MA), Sherrod Drown (D-OH), and Bernie Sanders (I-VT). The request appears particularly focused on IRBs owned by private equity investors. Historically, IRBs were located almost exclusively within universities and hospitals, but since the mid-2000s, for-profit IRBs were approving the majority of clinical trials for investigational drugs and devices.

According to a press release from Senator Warren, the Senators’ request follows “inadequate responses” they received to their initial investigation in 2019 by the two largest for-profit IRBs, WCG Clinical and Advarra. “Both firms are owned by private equity investors, raising questions about whether they are under pressure to reduce costs and ramp up profits, trends that often accompany private equity’s entry into a market,” the press release states. This adds to a series of other investigations Senator Warren has conducted into what she calls “private equity abuses in health care and other industries.”

The last time the GAO investigated independent IRBs, in 2009, they conducted a sting operation by receiving IRB approval for a fictitious study that would be categorized as having “significant risk” under federal regulatory guidance, and the IRB that issued the approval subsequently went out of business. In light of this development, we recommend that any private equity fund investing in IRBs begin preparing for this investigation now.

Bass, Berry & Sims counsel Clint Hermes has advised top academic medical centers, pharmaceutical companies, and device companies around the world on biomedical research issues and has served on and chaired numerous IRBs, conducted IRB audits and investigations, had operational responsibility for IRB offices, and led IRB process improvement programs.