The Curious Saga of Congress, the NIH, and Conflict of Interest

Depending on who you read, either the campus of the National Institutes of Health will soon be a ghost town as staff flee in the great Bethesda brain drain of '05, or Congress is finally teaching the research cowboys a lesson in respect for the American public. Lost in most analysis of the NIH's new conflict of interest rules, though, is an instructive story about how policy (at least sometimes) takes shape.

Let's start with the gist of the "interim final rule" published in the Federal Register on February 3: no consulting, teaching, speaking, writing, or editing for compensation for a "substantially affected organization" (that is to say, for a pharmaceutical or biotechnology firm); also no selling or promoting products or services of such an organization; and no holding financial interest in one. And no acceptance of honors or awards valued in excess of $200 (although exceptions will be made for certain awards, like, oh, the Nobel prize). All NIH employees must promptly terminate existing relationships and divest themselves of any proscribed financial holdings, with some provision made toward meliorating potential tax consequences.¹

The regulations are somewhat more nuanced than this, but frankly, not much. The more important point is that the NIH has come full circle: Twenty years ago, the NIH banned outside activities. Over the past decade, it permitted some relationships with industry and managed conflicts of interest through disclosure and prior approval of outside activities. Now, having paused briefly over the more modest reforms proposed by its own Blue Ribbon Panel on Conflict of Interest Policies, banned consulting for senior staff, and then voluntarily imposed a moratorium to allow careful deliberation that lasted barely four of its proposed twelve months, the NIH has adopted a blanket regulatory prohibition that applies to all employees.

The transformation was driven by a series of stories in the Los Angeles Times about impertinently lucrative consulting arrangements and the demands of an outraged Congress for an inquiry into the violation of public trust at the nation's premier research establishment. The Office of Government Ethics (OGE) undertook a fresh review of NIH policy and practices, as did the Inspector General of the Department of Health and Human Services and the (newly renamed) Government Accountability Office (GAO).²

The deeper people probed, the nastier the picture. Everywhere you looked were gross failures to enforce and to comply with existing agency policy: A senior Alzheimer's researcher accepted more than $500,000 in consulting and speaking fees from a drug company with interest in his research, without reporting or seeking prior approval of the relationship.³ A transfusion expert accepted $240,000 in fees and $76,000 in stock options from companies developing blood products.⁴ More than 130 consulting arrangements seem never to have been reported as required by NIH policy.⁵

But zoom out to bring more of the context into the frame, and the picture grows more complicated. In the far background there is Congress's broad, long-standing interest in promoting technology transfer to bring biomedical advances to patients more quickly. Technology transfer encourages collaboration with industry, as reflected in the Bayh-Dole Act and legislation enabling Cooperative Research and Development Agreements (CRADAs). In the immediate background are statutory and other constraints on the authority of the NIH—or any federal agency—to shape agency-specific policy regarding employees. (The Blue Ribbon Panel rehearsed constraints on NIH hiring practices and salaries, including the $200,000 per annum salary cap imposed by its parent agency, DHHS.⁶)

And in the foreground are the Standards of Conduct for Employees of the Executive Branch administered by OGE, criminal conflict of interest statutes, and case law that limits agencies' authority to impose still broader restrictions that might infringe on federal employees' fundamental rights. OGE expressed concern about NIH's "permissive attitude" in reviews going back to the early 1990s. Nonetheless, in a 1995 audit it found that some provisions in NIH policy governing outside activities were too restrictive, and it advised the agency either to come into compliance with the more lenient federal rules, or to...