NIH’s new ethics reform stirs up trouble in house

Employees say requiring divestiture too harsh

The National Institutes of Health (NIH) found its sweeping new ethics changes were proving a hard pill for its employees to swallow. As a result, they supplemented it with proposals that respond to actual and threatened resignations by some of the key NIH employees who say the new regulation, which requires employees to divest themselves of outside consulting and investments with pharmaceutical and biotech industries, is too restrictive.

"Nothing is more important to me than preserving the trust of the public in NIH. It is unfortunate that the activities of a few employees have tainted the stellar reputation of the many thousands of NIH scientists who have never compromised their integrity and have selflessly served the nation with great distinction through their discoveries," NIH director Elias A. Zerhouni, MD, stated when the new regulation was announced in February. "I am confident that these new rules will prevent the recurrence of past abuses and will go a long way in preserving the historic role of NIH as the primary source of unbiased scientific health information for the country."

The new regulation focuses on outside activities, financial holdings, and awards for all NIH employees. Over the past year, NIH has been addressing the ethics issues raised by the outside consulting activities of several of its employees. NIH conducted reviews of these activities, established a central review committee, convened a blue ribbon panel to help develop NIH-wide policy, responded to congressional inquiries, and testified at public hearings in the House and Senate. At the conclusion of all those research steps, Zerhouni announced it was evident that NIH needed to expand its system of oversight to ensure that conflicts of interest — even the appearance of conflicts — were prevented in the federally funded agency.

NIH announced the rules would be subject to revision as time passed, but almost immediately, employees demanded changes.

Cuts to moonlighting, investing

Under the new rules, all NIH employees are prohibited from engaging in certain outside employment with substantially affected organizations, including pharmaceutical and biotechnology companies; supported research institutions, including NIH grantees; health care providers and insurers; and related trade, professional, or similar associations.

Investments in organizations substantially affected by NIH, such as the biotechnology and pharmaceutical industries, are also not allowed for those employees who are required to file public and confidential financial disclosure reports, and are restricted for other staff.

In a memorandum to employees in February, NIH deputy director Raynard S. Kington, MD, PhD, wrote that NIH fellows "will not be required to divest all of their holdings in biotechnology, pharmaceutical, and medical device companies or the like . . . however, they will be required to report all stock holdings in these types of companies so these financial interests can be evaluated for specific conflicts of interest with their assigned activities at the NIH.

"Thus, on a case-by-case basis, a fellow may be required to divest particular assets that are determined to potentially conflict with their official duties," he added.

The Assembly of Scientists, an organization that represents the concerns of NIH intramural scientists regarding ethics issues, says the new rules go too far.

The organization agrees with conflict-of-interest rules, in general, to prevent a real or apparent conflict of interest, but the new rules, particularly regarding employees’ stock holdings in drug and biotech companies, will drive away current and prospective employees.

In fact, almost immediately after the rules were announced, a high-ranking NIH chief, James F. Battey, MD, PhD, director of the National Institute on Deafness and Other Communication Disorders and director of NIH’s stem cell program, announced he would leave NIH because a trust fund in his family would be in violation of the new rules.

Battey has since reversed his decision to leave, telling The Washington Post he has been assured that finalization of the new rules will rectify the problems he anticipated with his family’s investments.

A Duke University physician-scientist who at first refused a job as an NIH director because of the rules has decided to take the job as a result of changes to the new rules, NIH announced in May. While the modifications to the new rule have not been disclosed yet, NIH spokesman John Burklow said in a release, "As stated before, [Health and Human Services] has committed to adjusting regulations based on comments, and we remain confident that the adjusted rules will be fair and reasonable while assuring the public that NIH remains a source for unbiased scientific information."

Employees were not alone in their concern over the new rules.

In a letter to Zerhouni, congressman Chris Van Hollen (D-MD) questioned the "shotgun approach" to ethics reform, and wrote that "the deleterious effect of these rules on the ability of the NIH to recruit and retain the caliber of scientists required by its special mission is of great concern to me."

Updated information on the NIH’s conflict-of-interest rules is available on-line at