NIH defends consulting deals

At Senate hearing, top officials deny wrongdoing; Zerhouni appoints review panel cochairs

By | January 23, 2004

WASHINGTON, DC—Senior officials at the National Institutes of Health (NIH) yesterday denied committing any improprieties when they accepted lucrative consulting contracts from pharmaceutical and biotech companies that had dealings with the agency. Testifying before a Senate subcommittee, one institute director called the allegations, reported by the Los Angeles Times, “misleading, grossly inaccurate, and filled with false innuendo.”

But NIH Director Elias A. Zerhouni yesterday said that he had restructured the agency's system for implementing ethics regulations, suspended approval of all new consulting arrangements, and was reviewing all 365 currently active agreements. Zerhouni also announced the appointment of two cochairs to a “Blue Ribbon Task Force” charged with reviewing NIH ethics practices: Bruce Alberts, president of the National Academy of Sciences, and Norman R. Augustine, former chairman of the National Academy of Engineering and currently an executive with Lockheed Martin.

“I have reached the conclusion that NIH must make changes that will appropriately restrict current practices,” Zerhouni told a hearing of the Senate Appropriations subcommittee on Labor, Health and Human Services, and Education. But he said he would reserve judgment on specific changes until the task force had finished reviewing NIH ethics practices and had made its recommendations. The panel is to report its findings within 90 days of the appointment of other task force members.

In addition to concerns over the consulting contracts, other members of Congress have questioned whether “lecture awards” and other cash gifts given to NIH officials have influenced decisions on funding to universities and research institutes. “The issue of integrity is one of the utmost importance,” said Subcommittee Chairman Sen. Arlen Specter (R-Penn.). “I believe there'll have to be some very substantial remedial steps to make sure that the wall of separation between public duty and private gain is maintained.”

Zerhouni said about 200 NIH scientists, fewer than 3% of the staff, are involved in outside consulting activities. Of these, only 10 or 20 have stock ownership programs as opposed to direct compensation. Zerhouni defended the consulting arrangements as a means to translate research findings into therapies. “There should be a difference between a scientist who has authority [in the grant process] and those who do not,” he said. “We do want to translate that knowledge to the field.”

Ranking minority committee member Sen. Tom Harkin (D-Iowa) said the NIH is expected to be actively involved in the translation of research. “There needs some cross-fertilization in a consultative process. But in that, the people at NIH have to have absolutely clean hands,” he said. Contracting arrangements that benefit one company over another may not serve the public interest, he added. But Sen. Ted Stevens (R-Alaska), chairman of the Senate Appropriations Committee, defended industry–government collaborations. “We have to encourage collaboration rather than put a taint on it,” he said.

The Los Angeles Times reported last month that several high-level NIH scientists and officials had received more than $2.5 million in fees and stock options from drug companies for consulting outside of their government work over the past 10 years. The newspaper said Stephen I. Katz, director of the National Institute of Arthritis and Musculoskeletal and Skin Diseases (NIAMS), collected between $476,369 and $616,365 during the past decade in fees from drugmaker Schering AG and six other companies. During this time, NIAMS conducted clinical trials involving one of the company's drugs and pledged $1.7 million in small business research grants to another.

Katz yesterday told the Senate panel that he had followed all NIH ethics policies and procedures, had properly recused himself when required, and had made no decisions regarding any companies for which he consulted. “These allegations of misconduct on my part are misleading, grossly inaccurate, and filled with false innuendo,” he said.

Other NIH officials named by the newspaper also rebuked the allegations of conflicts of interest. They included John I. Gallin, director of NIH's Clinical Center; Ronald N. Germain, deputy director of the Laboratory of Immunology at the National Institute of Allergy and Infectious Diseases; and Jeffrey Schlom, director of the National Cancer Institute's Laboratory of Tumor Immunology and Biology. Under questioning, all said they had followed NIH guidelines and would be pleased to make their financial disclosures public.

Thus far, Zerhouni said, NIH's internal review has found no evidence that outside financial arrangements had harmed any patients or resulted in undue influence on grant approvals or other decisions. “I will, however, reserve final judgment until all internal and external reviews are completed,” he said.

Prior to 1995, Zerhouni said that NIH scientists could earn no more than $25,000 annually from any single outside source and not more than $50,000 per year in total. Stock or stock option payments were prohibited, and senior NIH officials could not accept any payments from outside sources. That changed in 1995 after an audit by the federal Office of Government Ethics (OGE) determined that NIH's rules were more stringent than those of other federal agencies.

“Agency management was concerned that NIH was at a disadvantage in competing with the private sector for the best scientists due to lower salaries, benefits, and the reduced ability to supplement incomes with outside activities,” Zerhouni said. Then NIH Director Harold E. Varmus changed the ethics policies, easing restrictions on many outside activities.

Marilyn Glynn, acting director of the OGE, yesterday told the panel that her office is in the process of reviewing the structure and staffing of NIH's ethics program, its public financial disclosure system, and the process for approving outside activities and accepting awards. Both she and Zerhouni told the panel that a blanket suspension against approving consulting contracts could not be done. “I can't change the rules without new regulations being promulgated,” Zerhouni said.

Rep. Billy Tauzin (R-La.), chairman of the House Energy and Commerce Committee, plans to hold a hearing on the consulting contracts and lecture awards in the near future. Last week, a group of House Democrats, including Reps. Henry Waxman (D-Calif.), John Dingell (D-Mich.), and Sherrod Brown (D-Ohio), asked the General Accounting Office to investigate the conflict of interest and other ethics allegations.

Specter, one of the Senate's strongest supporters of NIH, cautioned that these allegations of financial irregularities could end up hitting the agency where it hurts most—in the budget. “You've gotten more money because you are on the cutting edge of discoveries,” he told the NIH officials. “But these allegations will give fuel to people who want to cut back on your funding.”

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