GOVERNMENT ethics rules tend to have a predictable arc. Rules are adopted, then relaxed, perhaps in response to complaints that they are unduly stringent. Then, after reports of abuses, they are tightened again, sometimes overly so. The latest swing of this familiar pendulum is taking place at the National Institutes of Health, which announced a tough set of ethics restrictions this month that clamp down on outside consulting and investments. The excessively permissive rules that were in place, and their excessively lax enforcement, justified an overhaul. But the new rules, particularly a broad prohibition on owning stock in drug companies and other firms potentially affected by NIH, go too far. They threaten to harm the ability of the institutes to attract and retain top scientists without providing significant extra safeguards against conflicts of interest.
The problems at NIH stem from a decade-old move to loosen the rules on outside consulting deals; this was to help NIH, whose scientists earn less than their counterparts in industry and academia, compete for top talent. But a series of Los Angeles Times reports about questionable arrangements, followed by an investigation and hearings by a House oversight committee, provoked a needed reassessment. In response, NIH Director Elias A. Zerhouni crafted a well-balanced set of restrictions that would have prohibited such outside arrangements for top officials and dramatically curtailed consulting by others. The final rules unveiled this month, however, go much further, imposing an absolute ban on outside consulting and an entirely new set of prohibitions on stock ownership. Under the rules, all of NIH's 17,500 employees -- and their spouses and minor children -- would be barred from owning more than $15,000 worth of stock in a wide array of drugmakers, biotechnology firms and manufacturers of medical devices. Moreover, at least one-third of the NIH workforce -- scientists at a senior-enough level that they have to file confidential financial disclosure forms, and those involved in dispensing grants -- would be prohibited, along with their families, from holding any stock in such firms.
The stock rule in particular, which is similar to one in place at the Food and Drug Administration, has created an uproar among NIH employees, and understandably so. We recognize the desire for a bright-line rule on consulting, given the sensible exceptions to permit teaching, writing textbooks and the like. The stock rule, however, strikes us as too broad. It would be a hardship on numerous employees, requiring them to sell the covered stock, and probably harm recruiting as well for the same reason. It's certainly true that NIH scientists shouldn't have any investments related to their research, but such restrictions are already in place. They should be robustly enforced and applied to a larger category of employees.
But an across-the-board ban in situations in which there is no possibility of even an appearance of conflict goes too far. "It concerns me that it's overly strict," Stephen D. Potts, a former head of the Office of Government Ethics and a member of the blue-ribbon NIH panel that proposed the more limited rules, told us. When issuing the rule, the Department of Health and Human Services, which oversees NIH, said it would evaluate provisions within the year to consider "possible effects on hiring and retention." That rethinking, especially in light of today's report that the problems at NIH may have been overstated, should come sooner rather than later.