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NIH Will Restrict Outside Income

Tight Rules Address Concerns About Conflicts of Interest

By Rick Weiss
Washington Post Staff Writer
Wednesday, February 2, 2005; Page A01

All of the more than 18,000 employees of the National Institutes of Health will be subject to stringent new restrictions on stock holdings, outside consulting, and other forms of income from drug companies and similar sources under new regulations to take effect this week, NIH officials announced yesterday.

The new rules, issued by the Department of Health and Human Services and the Office of Government Ethics, end more than a year of internal and congressional investigations into allegations of conflicts of interest involving NIH scientists and administrators.

The new rules are stricter than those NIH Director Elias A. Zerhouni proposed. (James A. Parcell -- The Washington Post)

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Under the system, employees may not be paid to consult, speak, write or teach for any drug or biotech company, medical device maker, health provider or insurer, or trade or professional group. Thousands of employees will have to divest themselves of all stocks held in drug, biotech and related companies, with the exception of diversified mutual funds. And even the lowest-ranking employees with no control over purse strings or policies will be subject to new limits of $15,000 on health-related stock holdings.

As of a few months ago, about 100 agency scientists were involved in collaborations that would be banned under the new policy, an NIH official said. Many others stand to be affected by the other restrictions.

The rules are stricter than those proposed last year by NIH Director Elias A. Zerhouni -- a reflection both of Congress's dissatisfaction with the changes the agency initially proposed and of Zerhouni's own blossoming recognition last year that the problem was bigger than he had thought.

In the end, Zerhouni said at a news briefing on the agency's Bethesda campus, it made sense to simply draw "a bright line" that will effectively isolate NIH scientists and other employees from outside economic interests.

"We needed to absolutely achieve the number one goal I've stated many times before: preserving the public trust . . . with no taint of conflict of interest or the appearance of conflict of interest," he said. "That's why people entrust us with their tax dollars."

The 96-page "interim final rule" (summarized at www.nih.gov/about/ethics/020105COIsummary.pdf) will take effect when it is published in the Federal Register. Officials expect that to happen in the next few days.

Although Zerhouni had sought to impose rules that would expire in a year, the new regulation will remain in force indefinitely -- unless HHS officials and others agree to change it.

The changes codify the reversal of a trend toward liberalized links between NIH researchers and drug and biotechnology companies that began in 1995, when government ethics officers criticized NIH for having restrictions on outside consulting that were stricter than those at other agencies. Then-NIH Director Harold Varmus responded by loosening the restrictions, saying the changes would speed the translation of basic medical advances to the marketplace.

In December 2003, the Los Angeles Times reported that some NIH scientists had arranged lucrative side deals that, though apparently legal, raised concerns about conflict of interest. A congressional investigation ultimately found that additional NIH researchers -- "a few dozen," Zerhouni said -- had not informed the agency of their arrangements with drug and biotech companies, as required.

In perhaps the most egregious example, a researcher at the National Institute of Mental Health was paid $517,000 in fees, honoraria and expenses as a consultant for the drug giant Pfizer Inc. over five years without disclosing that income to the agency, congressional investigators said.

That and other cases are still under investigation, Zerhouni said.

NIH employees have reacted with mixed feelings to the events of recent months, with some saying it was about time the agency cracked down on an embarrassing abuse and others complaining that NIH leadership was too quick to abandon the vast majority of employees who have done nothing wrong.

The announcement that restrictions would be even broader and deeper than expected strengthened that sense of injustice in some.

"The vast majority of people, who have played totally by the rules for a long time, are now being told, 'Nothing goes,' " one longtime employee said, speaking on the condition of anonymity out of fear of being labeled a critic of HHS or Zerhouni. "A lot of people are saying, 'Why not punish the bad guys and stick up for the good guys instead of changing the rules for everybody?' "

Zerhouni acknowledged that "the vast majority of scientists, more than 5,000 of them on this campus, have served selflessly." He said, however, that "we owe it to them to come up with regulations to protect their reputations."

He also reiterated his concern that the new restrictions might hurt efforts to recruit the best scientists, who can earn at least as much with far fewer restraints at other research institutions.

Ultimately, he said, "it was more important for an agency that funds grants and gives advice to hold itself to a different standard than the rest of the world," Zerhouni said. "If at all necessary, we will revisit these regulations later on."

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