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The perverse incentive structure of IRBs

April 2, 2009

As a researcher at a university, all of my human subjects research has to go through my university’s IRB. I believe that IRBs have an important role in research. However, in practice I sometimes find dealing with an IRB to be frustrating.

Pretty much all of the research that I do is very low risk. Yet I have to go through a review system that was invented as a response to Nazi medical experiments and other horrific incidents half a century ago. You might think that should make my behavioral research easier to get approved — I could just say, “hey, guess what, I’m not secretly giving people syphilis or anything” and get the thumbs-up. Sadly, though, it doesn’t work like that. Even when I have a study that is eligible for expedited review, there is a heck of a lot of paperwork to fill out, and time to wait, and often pointless revisions to make — all in order to do something as simple as asking people a few questions about what kind of day they had yesterday.

So why are university IRBs so inefficient? There are a number of reasons, but I believe that one of the core problems is that the system is built on a foundation of perverse incentives for the IRB.

The IRB’s task can be thought of like a signal detection problem. Simplifying a little bit, you can think of the protocols that researchers submit as being either worthy or unworthy. For any given protocol, the IRB has to decide to approve or reject. So there are two kinds of correct decisions (approve a worthy protocol or reject an unworthy one) and two kinds of mistaken decisions (reject a worthy protocol or approve an unworthy one). And the big problem is that the IRB’s potential costs associated with the two different kinds of mistakes are severely imbalanced.

If the IRB mistakenly rejects a worthy protocol, what is the worst thing that could happen? The investigator might make a phone call and resubmit the application, taking up some extra staff time, but the IRB will not get into any serious trouble. And the costs of this mistake are chiefly borne by the researcher, not the IRB. Furthermore, within a university, there is no appeals process or oversight authority empowered to act on a rejected protocol.

By contrast, if the IRB mistakenly approves an unworthy protocol, all kinds of bad things could happen. Even if no subjects are harmed, an audit could turn up the mistake and the IRB could get in trouble. And in more serious cases — if subjects do get exposed to inappropriate risks, or actually get harmed — things can get much, much worse. The IRB could get shut down (halting all research at the university), the professional IRB staff could get fired, and the university could get sued by the harmed subjects.

These asymmetric incentives mean that IRBs have a very strong incentive to err on the side of rejecting too much research. So it’s no wonder that the process is so slow and clunky, and even simple low-risk protocols are routinely sent back for revisions. The staff at my IRB are good people who want to help researchers when they can. But the actual review board members are often people with no personal stake in seeing that research gets done efficiently, and some have no formal science training at all (which can lead them to imagine harmful effects of research that have no basis in reality). And for both the paid staff and the board members, even those with the best intentions work within an incentive structure that is completely out of whack.

So a big part of me was outraged (and a tiny, naughty part of me jealous) to learn that in commercial medical settings, the IRB incentives are out of whack too — but in the opposite direction. If you are a researcher a private, for-profit research company, you get approval for your research by paying a commercial IRB to review it. It doesn’t take a genius to look at this setup and figure out that a commercial IRB that approves lots of research is going to be popular with its customer base. So it was probably just a matter of time before a scandal erupted. And now one has.

In a test of the commercial IRB system, the Government Accountability Office submitted a fake protocol to 3 different commercial IRBs. The protocol was rigged to be full of unsafe, high-risk elements. And apparently one of the companies, Coast IRB, fell for the sting, deeming the protocol safe and low-risk and giving it approval. Upon further investigation from the GAO, it turns out that Coast has not rejected a single proposal in the last 5 years, and it made over $9 million last year. Hmmm…

In the aftermath of this incident, it is very likely that attention is again going to get focused where it always gets focused: on the possibility that IRBs might be approving bad, unsafe research. But such a focus may be misguided. The case of Coast IRB shows that even commercial IRBs face very serious costs when they get caught approving bad research. The company has just seen its entire $9-mil-a-year business evaporate while it undergoes an audit. Employees may lose their jobs. Owners may lose profits and see their shares lose value. The entire company could go out of business.

Instead, the problem with both university and commercial IRBs is on the approval side: the system does not present the right level of incentives for approving worthy research. In the university IRB case, the incentive is too low. And in the commercial IRB case, it’s too high. Hypothetically speaking, even if somebody at a Coast IRB kind of place knew the potential costs of getting caught approving bad research, in a rational cost-benefit analysis those potential costs would have been balanced against a multimillion-dollar revenue stream that depended on them approving lots of protocols, good and bad.

So what will happen next? If you are a member of Congress and you want to fix commercial IRBs, you could alter the cost-benefit balance on either side. That is, you could either diminish the profit motive associated with approving research, or you could make it even more costly for a company to mistakenly approve bad research. The problem is that any new regulatory policy designed to fix commercial IRBs could very well affect university IRBs as well, since both kinds of IRBs fall under many of the same regulations. And if you raise the costs and punishments associated with approving bad research (or institute even more intrusive regulations and oversight to try to prevent such approvals from happening), you will make the perverse incentives at universities even more perverse.

Personally, I think it’s at least a littie bit weird that IRBs — institutions designed to safeguard the interests of research subjects — can be run as for-profit businesses whose very financial existence depends upon those they are supposed to watch. If Congress wants to fix the system in the commercial medical industry, they need to look at the fundamental question of whether that is a sustainable model, and narrowly tailor any changes to apply to commerical IRBs. The answer is most definitely not to create more intrusive oversight or threaten punishments across the board. Let’s hope that is not the direction they choose to go.

One Comment
  1. Chris permalink
    August 4, 2012 6:14 pm

    Very well-written — didn’t know about this. I’m not a religious person, but the Biblical adage that “one cannot serve two masters” seems apt when assessing the prospects of for-profit regulators to accomplish what they claim to do. In general, these firms would like us to believe that they can simultaneously serve the interests of the general public (by blocking risky proposals from being approved) while also serving the narrow interests of their clients (which is to get approved with minimal expense). Customers will choose a firm that they think will review them with minimal delays or revisions, which cost money, so it’s a good business decision for the regulators to minimize them and attract business, with only uncertain disincentives associated with this choice.

    It’s a tricky question in a country like ours, with strong pro-business interests: how does one implement an efficient mechanism for protecting the public’s welfare without unnecessarily impeding business? I’m not an expert in this area so I don’t have a well-reasoned suggestion, but it is thought-provoking.

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