The Food and Drug Administration is reversing a decision to award a no-bid $4.2 million grant to a policy center at Duke University headed by former FDA commissioner and current paid board member for Johnson & Johnson Mark McClellan.

The funding opportunity was posted in late April as a five-year grant for which only a single institution, the Duke-Robert J. Margolis Center for Health Policy, was eligible to apply. The grant's purpose was to "to help advance regulatory science to promote the increased availability of safe and effective drugs to the public," according to the request for application. FDA said in a statement that it is in the process of opening the grant application to other institutions.

Several health policy experts had expressed favoritism concerns about the initial no-bid proposal, raising questions about what made the Duke center uniquely qualified to do the work, which involves convening discussions with drug companies, health-care providers and patient groups to discuss key issues in the drug approval process.

They also raised concerns about McClellan's role as a paid board member for Johnson & Johnson, one of the largest drugmakers in the world, given the pharmaceutical industry's deep interest in drug approvals.

“It is not like there’s one laboratory on the planet that knows how to clone these particular genes — there's a substantial number of groups out there that work on these issues. It frankly makes no sense that the only place you could go for this is the Duke center run by a drug company advocate,” said Jerry Avorn, a professor of medicine at Harvard Medical School, which has a center that conducts similar work. “The very fact that they could have thought this was a good idea, even to the point of publishing the request for proposals, is important because of what it reflects about the decision-making process within FDA and the administration.”

Ellen de Graffenreid, a spokeswoman for the Duke-Margolis Center, directed inquiries about the grant to the FDA and stressed that Gregory Daniel, the deputy director of the center, is the principal investigator on its current agreements with the agency — not McClellan.

The FDA, after initially defending the no-bid proposal, said in a statement that the agency had “become aware of other organizations who believe that they can submit a competitive proposal to conduct the needed research and related activities. As a result, FDA has decided to change the announcement from a sole source award to an open competitive grant.”

In a statement, McClellan said, “My work and the work of the faculty and staff affiliated with the Duke-Margolis Center speaks for itself, and complies with Duke’s well-established policies intended to address any issues related to conflict of interest.”

McClellan served as FDA commissioner under President George W. Bush. The current commissioner, Scott Gottlieb, served as his senior adviser.

FDA has awarded sole-source grants in the past — though these are rare. In 2017, there were 548 funding awards by FDA, of which six were sole-source awards, according to an FDA spokeswoman.

Until this week, the FDA had defended this sole-source grant, saying in an email that “agency policy allows for exceptions to competitive bidding under certain circumstances, such as when the agency finds a particular institution is uniquely qualified to carry out a cooperative agreement.”

FDA made a sole-source award of a similar grant in 2013 to the Brookings Institution's Engelberg Center for Health Care Reform, which  McClellan led from 2007 to 2013.

McClellan identified himself as director of the Center in June of 2013 in testimony before Congress. McClellan took a paid position on the Johnson & Johnson board in fall of 2013. He received $285,000 last year for his work, according to company filings.

De Graffenreid said Wednesday that McClellan was no longer affiliated with the Engelberg Center when he joined the corporate board, saying in an email he had stepped down in 2012 to spearhead a major initiative. Documents posted by Brookings Institution described the initiative as "within the Engelberg Center." De Graffenreid later said that he continued to be affiliated with the Center through 2015.

FDA justified the 2013 grant at the time on the center's “status as a neutral, nonprofit, research-focused institution” and reputation as “an 'honest broker' with the ability to identify practical solutions that reflect the best available science and input from all stakeholders,” according to a notice in the Federal Register in March of 2013.

The principal investigator of that grant was also Daniel, McClellan's current deputy at the Duke-Margolis Center.

Alfred Engelberg, a patent lawyer who was a major funder of the Brookings Engelberg Center, said in an interview that he objected to McClellan's role on a corporate board and cited that as a reason when he ended his financial support in March of 2015. He said the bulk of his $10 million contribution occurred before the conflict arose.

“I personally believe Mark McClellan could not serve as a director of the Engelberg Center and Johnson & Johnson, and because I believe that I withdrew. He has a fiduciary obligation to a drug company,” Engelberg said.

In 2015, McClellan left Brookings for Duke University. A. Eugene Washington, Duke University's chancellor for health affairs, is also on Johnson & Johnson's board.

Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health who has worked with McClellan, said he values his insights on topics like drug pricing and policy, but doesn't consider him neutral.

“He is smart and an excellent researcher, so I want his perspective, but you need someone who does not take a perspective in this role at the FDA. In many instances Mark is an advocate, somebody with a position and not as somebody who is neutral,” Anderson said.

“Sole-source contracts are very challenging to award in the government,” Anderson added. “You really have to have a unique skill or unique data set or a unique something that allows you to grant somebody a sole-source contract — and to give conferences and to give meetings isn’t one of them.”

McClellan did not disclose his relationship with Johnson & Johnson in his biography or in the white paper published from FDA-supported meetings in 2016 and 2017, which discussed the use of new kinds of evidence in the regulatory process.

“The fact that the center is headed by someone who also serves in a paid position on the board of pharmaceutical company is a clear potential conflict of interest,” Sean Moulton, open government program manager at the Project on Government Oversight, wrote in an email. “There are several safeguards that could be instituted. First and foremost is disclosure of the potential conflict. It should be made clear to all participants that the potential conflict exists. At any meetings that occur it should be disclosed at the beginning, especially if the head of the center is participating in the meeting.”

On several medical publications about health topics, McClellan does not disclose his board membership. Duke said he was following the university's policies.

“Dr. McClellan follows Duke policies with regard to the time, place, and nature of appropriate disclosure,” de Graffenreid wrote in an email. She added that the kind of work Duke does for FDA “does not include providing advice or policy proposals to the agency.”