NIH announces new outside work restrictions

Federal agency explores new policies

In the wake of congressional hearings levying conflict of interest allegations at top scientists at the NIH, the director, Elias Zerhouni, has announced new restrictions on the types of paid consulting agreements federal scientists can accept with pharmaceutical and biotechnology companies.

"I have reached the regrettable conclusion that some NIH employees may have violated these [existing] rules and that the agency’s ethics system does not adequately guard against these violations," he told members of the House of Representatives’ Energy and Commerce Oversight and Investigations Subcommittee during a six-hour hearing on June 22.1

The subcommittee first initiated hearings on conflict of interest allegations following the December 2003 publication of an article in the Los Angeles Times that listed hundreds of consulting payments from pharmaceutical and biotech companies to a number of NIH employees.2

In January, Zerhouni told committee members that a blue ribbon panel would investigate the allegations and make recommendations for improving disclosure of potential conflicts of interest and instituting internal policies for monitoring compliance.

The panel’s final report, issued May 6 and adopted by the agency’s Advisory Committee to the Director, addressed three main areas: outside activities, financial disclosure and system management, and reform.

The panel crystallized its investigation into 18 specific recommendations and six general findings.

The recommendations included stricter limits on outside consulting for top-level manager-scientists at the NIH, a ban on scientists with human-subjects responsibilities holding interests in companies involved in such research (with some waiver leeway possible), and also set time and income limits on approved outside activities (with the exception of outside medical practice).

Following the report’s release, however, subcommittee members charged that the changes were inadequate.

As part of the investigation, subcommittee chair Jim Greenwood (R-PA) contacted 20 pharmaceutical companies, asking them to reveal all consulting agreements they had with NIH employees, and found 264 reported agreements, at least 100 of which were unknown to NIH officials.

In response, Zerhouni last month announced additional changes to the NIH ethics rules, including:

  • A ban on consulting agreements between senior NIH officials — which include directors, deputy directors, scientific directors, and research directors — and pharmaceutical and biotech companies. In addition, senior NIH officials cannot take consulting or speaking fees from not-for-profit organizations.
  • A ban on consulting agreements for NIH employees involved with the agency research grant process.
  • Limits on the consulting agreements that NIH employees can accept, such as a compensation limit equal to 25% of their agency salaries and a time limit of 400 hours each per year.
  • A ban on stock options as compensation for NIH employees as part of consulting agreements;
  • A ban on ownership of stock in pharmaceutical and biotech companies for more than 5,000 NIH employees — other agency employees could own only $5,000 of stock in such companies;
  • A provision under which NIH employees could not serve on the boards of pharmaceutical and biotech companies.
  • A ban on any form of compensation from universities and institutions that receive NIH research grants.
  • A provision that would require NIH employees to refuse consulting payments until agency ethics officials could determine their legitimacy.

Some say rules still too lax 

Some, however, don’t think the new ethics rules go far enough, arguing that top-level NIH scientists should be banned from all paid consulting for the pharmaceutical and biotech industries.

"There is a strong argument for not allowing NIH senior scientists or scientists of any stripe for that matter to engage in paid consulting for industry," says Merrill Goozner, director of the Integrity in Science Project of the Washington, DC-based Center for Science in the Public Interest. "The NIH is the premier medical research institution in the United States, as well as a funding body. When they get tied up as individual scientists with individual firms, they may lose site of the primary mission, which is to find the causes and cures of disease."

NIH scientists need to remain completely open to pursuing the best possible research avenues and solutions, and accepting money from companies that have a stake in research outcomes inherently compromises this function, he contends.

Researchers with the best of intentions still will be unconsciously influenced in favor of a particular company’s pursuit if they routinely receive consulting fees — no matter how seemingly insignificant — from the same company.

Lowering income limits from 50% to 25% will likely make little difference, he says.

"Do they really believe that a person might be unduly influenced by compensation equal to 26% of their salary but not 25% of their salary?" he asks. "That just flies in the face of what conflict of interest is all about. If a scientist is accepting money from a company with a financial interest in the research area that scientists supervises, how will we ever be sure that their decisions are not biased in favor of that company?"

In explaining the rationale behind the recommendations, blue ribbon panel members likened the atmosphere at the NIH to that of a university balancing education and research interests, says Goozner. But, he argues, the NIH, as a taxpayer-funded federal entity, should be held to higher standards.

"A university researcher can stay on a narrow path [of study] and pursue that and, if some company is interested, then perhaps they can get consulting arrangements from it," he says. "We don’t want that in our NIH scientists; we want them to take broad views of their field and always pursue the most productive path whatever that might be. Once you engage in a financial relationship with anybody, that is a reward for pursuing a particular path."

Although some have argued that too many restrictions on employees’ ability to earn outside consulting, writing, and teaching fees will hurt the ability of the NIH to attract top scientists and limit productive cooperation between research and industry, thereby lengthening the time it takes for advances in technology to reach the market — Goozner argues there are better ways to address these issues.

"If industry wants to consult with an NIH scientist, they should, just like any other researcher out there should be able to," he says. "This is not to say that they should cut off all contacts with private enterprise. Because these companies are pursuing for-profit avenues, then perhaps they should pay for the privilege. But that money should go into a general fund, if not back to the U.S. Treasury, not to the individual scientist. If there is an issue with holding and attracting quality people at NIH then the level of salaries — and, already they are among the most highly paid people in government — then that should be addressed directly, rather than trying to set them up with the right to earn up to 25% of their salaries."

Perception of misconduct is dangerous 

A relatively small number of questionable arrangements — not widespread misconduct — and a lack of transparency in its regulations and oversight procedures necessitated the blue ribbon panel and Zerhouni’s reform efforts, notes David Korn, MD, senior vice president of the division of biomedical and health science research at the American Association of Medical Colleges in Washington, DC.

"You have two main issues: One relates to the consulting arrangements with companies that provide products for study to the NIH and to institutions that receive funding from the NIH; and, the second issue, is the receipt of honoraria and sponsored lectureships by senior NIH officials from institutions receiving large grant funding," he says.

During the tenure of former NIH director Harold Varmus, there was an increased emphasis at the institutes on recruiting and retaining the top scientists in the individual fields to service at the federal agency, he explains.

To do so, Varmus and others at the institutes felt they had to create parity in compensation and other privileges between key positions at the NIH and positions at a comparable level at private research institutions and universities. Scientists were allowed, within the scope of regulations governing all federal employees, to maintain outside consulting arrangements and, in some cases, federally permitted consulting positions at the NIH were used to augment the salaries of some officials whose pay grade would limit them to a salary beneath what they were earning in the private sector.

Further complicating matters, there were no overall guidelines at the NIH governing disclosure of outside relationships, and monitoring of such relationships. Different institutes and offices had different policies about who must disclose what and to whom. Different positions would be governed by a number of different federal regulations and guidance regarding permitted outside work and disclosure requirements.

Following the L.A. Times report, Zerhouni initiated an investigation and discovered several questionable relationships — among them senior NIH directors with paid consulting contracts from private companies whose products were studied with NIH funds, and one situation in which the a director had a paid consulting relationship with a company whose product was under direct study at an NIH center. Zerhouni also discovered that many of these relationships had never been disclosed — either internally or externally.

"I think Dr. Zerhouni responded quite vigorously to what was reported in the media, by establishing a coherent set of guidelines on who could accept outside consulting work, setting limits on the amount of money that could be involved, and establishing a clear, transparent process for reporting potential conflicts of interest and for ongoing monitoring," Korn says.

However, a key bone of contention has been the pervasive belief, within the NIH, in the need for parity in compensation with the private research community. Many government scientists have come to accept as gospel that they should be compensated as well as their private colleagues and should not have to give up any perks in order to engage in government service, he says.

"However, it is pretty apparent that this opinion is not shared by many members of the [Congressional] oversight committee," Korn adds. "Following the initial release of the blue ribbon panel’s report, the committee responded basically by saying, No way. You have not gone far enough [in restricting outside work].’"

It’s a trade-off 

Whether federal scientists should be expected to surrender more of their freedom to earn outside contracting fees in the service of maintaining the integrity of the agency and public confidence in it, is a legitimate question for discussion, he adds.

To be sure, top scientists in the private sector most likely would sacrifice as much as 30%-50% of their annual earnings if they were to come to work for the NIH and accept salary alone. However, the world of the federal NIH researcher also is often very different than that of the typical academic investigator, Korn notes.

Private researchers must continually hustle for grant money to keep their projects going, whereas NIH scientists have a budget and, often, a longer time frame to study their interventions.

"It’s not directly equivalent, but there that is valuable, the NIH can be a much more comfortable, insular place that the private arena," he says. "And I don’t know that I agree that there must be absolute parity between people involved in intramural research and those who do extramural."

There also is something to be said, he adds, for commitment to public service even in the face of personal sacrifice — something that is lacking not only here, but in many other areas of public life as well.

While it is true that most NIH scientists could make more money in the private sector — that also is true of most U.S. senators, representatives and others employed by the federal government.

Ultimately, however, it will be up to Congress to decide the issue.

"They could decide to do an experiment with this next appropriations bill and absolutely eliminate any outside work by NIH employees," he says. "Then, we would see whether there would be a mass exodus of talent. I think that there are some who probably would leave if they had to give up their outside work, but more would not. I could be wrong, however. It might be interesting to find out."

Above all, it is important for the NIH to maintain unquestionable standards of integrity; it is to keep the public’s trust, Korn says.

Although, in this whole controversy, it has not been proven that NIH scientists use their influence to help secure funding or favorable reviews for products of companies they had outside relationships with — the perception exists that they could have, and that the public might never have been able to find out.

"I think the NIH may have gotten a little isolated and forgotten that when you are a publicly funded agency charged with maintaining the public good — in this case researching ways to cure disease and mitigate suffering; then you have to worry about perception," he says. "You will be held to a different standard whether you think you ought to be or not."


1. Weiss R. NIH scientists broke rules, panel says. Washington Post, June 23, 2004:A19.

2. Willman D. Stealth merger: Drug companies and government Medical Research. Los Angeles Times, Dec. 7, 2003: A1.