Scientific Conflict Of Interest Regulations Offer Loophole To Small Business Program

NIH takes aim at the links between industry and those doing clinical trials while ignoring firms that get funds for technology innovations WASHINGTON--Current government efforts to prevent financial conflicts of interest among clinical investigators appear to ignore an obscure but well-funded federal program that operates with few safeguards against such potential abuse by researchers. And some scientists think that omission could be a costly mistake. Officials at the National Institutes of Health have just finished work on proposed rules for the biomedical community that are meant to balance the government's desire to turn basic research into commercial products against society's growing concern about the integrity of those who perform that research. WASHINGTON--The Bush administration is unlikely to endorse any conflict of interest regulations that require clinical scientists to do anything more than disclose financial holdings in the companies whose products they are evaluating, according to White House officials. National Institutes of Health administrators have recently completed work on proposed guidelines that suggest a more stringent policy, and are awaiting approval from the Department of Health and Human Services to announce them publicly. But a report released last month by the biotechnology working group within the President's Council on Competitiveness makes clear that the administration sees no reason to go beyond simple disclosure. "Any blanket policy that goes beyond that would interfere with the proper functioning of the [federal] agency," explained Larry Lindsay, special assistant to the president for policy development and chairman of the working group, at a press briefing on the 19-page report. "We think that there's a balance that must be struck between the free flow of scientific information and fraud, and we are not going to tell [federal agencies or universities] to go any further than disclosure." Biomedical scientists who attended a workshop held last fall at NIH appeared to reach a consensus that disclosure is necessary but not sufficient to avoid the appearance of conflicts of interest, and that investigators should not have any direct financial links to companies whose products they are evaluating. In contrast, the report from the competitiveness council, which focuses on the scientific, regulatory, and financial components of a national biotechnology policy, says that any guidelines need only "require full financial disclosure of relationships between federally supported or employed scientists and commercial entities" for those involved in clinical trials. Lindsay, an economist who has been nominated to become a member of the Federal Reserve Board, said at the press briefing that each potential conflict of interest should be handled on a case-by-case basis by the appropriate federal agency or university where the scientist is employed. And he said he wasn't troubled by the group's failure to suggest specific criteria to be applied to determine whether a conflict exists that would disqualify the investigator from participating in a clinical trial. "I can't define it, but you know it when you see it," Lindsay said about how officials should detect any improper relationships. Asked if such a policy would send a message to investigators that nothing was off-limits, he replied, "If somebody discloses that they have $4 million at stake in a company whose products are involved in a Stage 3 clinical trial, then I suppose that their supervisor would take the appropriate action." Such an attitude suggests that the proposed NIH guidelines could face tough sledding when they are circulated among all the relevant agencies for comment. In fact, one member of the biotechnology working group says it is all but certain that the NIH proposal would be altered. "We have several opportunities to have input on these guidelines, and I'm sure that we'll make our views known," he says. "In fact, if there is disagreement between an agency and the Office of Management and Budget on a regulatory matter, we'll be asked to resolve the matter." The official also poured cold water on the hopes of NIH officials for a speedy approval of the proposed regulations. "I wouldn't hold my breath waiting for this to appear," he says. "It's going to be quite a while." --J.M. The proposed regulations, which still must be approved by Health and Human Services secretary Louis Sullivan and by the White House before being announced publicly, are much narrower in scope than in an original proposed draft issued in September 1989 and withdrawn three months later (The Scientist, Oct. 16, 1989, page 1; and Feb. 5, 1990, page 1). The new rules are expected to give universities the job of policing faculty members engaged in clinical trials--the testing on patients of the efficacy and safety of a drug or medical device--funded by the government. At a minimum, the regulations are expected to prohibit researchers from directly owning stock in companies that make the products being evaluated, and require them to disclose to university officials all relevant personal financial information. As William Hait, director of the breast cancer unit at Yale Medical School in New Haven, Conn., and a speaker last fall at an NIH forum on the subject, says, "Anyone who could gain financially from reporting positive results should not be responsible for running such trials." The SBIR Program However, the rules are silent on the conduct of researchers involved in the Small Business Innovation Research (SBIR) program. This nine-year-old federal program channels hundreds of millions of dollars each year to scientists at companies that are trying to develop products for public use. Many of those companies have a handful of employees, and the scientist who receives the federal grant is often the president or principal shareholder as well. The problem, say some scientists, is that recipients of SBIR grants aren't just researchers. In order to speed their products to market, these scientists may also play a role in the evaluation of those potential products. Although the proposed NIH guidelines recognize the inherent danger in having a financial interest in the outcome of such an evaluation, they seem to ignore the possibility that SBIR grantees could ever face such a conflict. "In the SBIR program, the applicant often `is' the company. Most of the time he owns it lock, stock, and barrel," says Mary Custer, an analytic chemist and administrator at the National Institute of Drug Abuse, which funds some of the clinical trials that would be covered under the new rules. "At what point is it not all right for the president of such a company to go ahead and perform the research on his product? These new rules don't address that issue." NIH Disagrees Federal officials say there is no inconsistency in excluding SBIR grantees from the new guidelines. "There's a confluence of interests, not a conflict, in the case of an SBIR grantee and the federal government," says acting NIH director William Raub. "Both parties want the technology to be commercialized." George Galasso, associate director for extramural affairs at NIH, had the job of drafting the revised set of conflict of interest regulations. In his opinion, the SBIR program properly falls outside the scope of the new directives. "SBIR is a congressionally mandated program with a set-aside to develop commercially viable products," Galasso says. "It's not the same thing as what we're doing with investigator grants or clinical trials. [SBIR recipients] are given money to invent something and prove that it works," he says. "And anything that comes out of this program has to be seen for what it is." But some scientists disagree with that analysis. Why, they wonder, is NIH working so hard to stamp out any appearance of impropriety among researchers who perform clinical trials with federal funds, but is unwilling to take a closer look at those scientists who, by definition, have an enormous financial stake in the outcome of their work? That question was raised by Bernadine Healy, the Cleveland Clinic Foundation cardiologist who has been nominated to be the next NIH director. Speaking during a contentious two-day workshop in June 1989 that led to the ill-fated first set of proposed guidelines on conflict of interest, Healy told her audience that she thought the guidelines went too far in questioning the integrity of scientists who perform basic research. Federal officials would do better, she suggested, to look at other federally funded scientific endeavors rife with potential conflicts of interest. The SBIR program was at the top of her list. "SBIR is an inherent conflict-of-interest situation," Healy said during that meeting. "I've suggested independent biostatistics analyses and outside oversight as two ways to reduce the likelihood of conflicts, and to bring them [SBIR grantees] into the fold. "SBIR is a good idea, don't get me wrong," she added. "But it is a significant portion of the federal research portfolio, and it should be looked at in the same context as all other federal research programs." A Complex Problem The problem of what to prohibit and what to permit is a complex one. The tension between the scientist-entrepreneur who seeks fame and fortune from a discovery and the government's responsibility to safeguard public funds was highlighted in a brief speech given November 30 by assistant secretary for health James Mason at an NIH meeting held to discuss the latest draft of the proposed rules. Mason, who oversees all biomedical research within the Department of Health and Human Services, began by stating what the government wants to avoid. "Our goal is to be assured that no product of commercial value that is supported by the Public Health Service is compromised by any financial interest of the participating investigators," he said. But he quickly reminded his audience that the Bush administration did not want to stand in the way of progress, nor of scientific inquiry. "We believe that cooperation between industry, government, and academia is not only desirable but essential," he said, "and we don't want to impose an unwarranted burden on the scientific community." It's that second aim--cooperative ventures--that is a hallmark of the SBIR program. Begun in 1982 and funded by a 1.25 percent tax on the research budgets of 11 federal agencies, the SBIR program gives out two-part grants ($50,000 initially, and then up to $300,000) to scientists and engineers who need money to prove that their ideas are capable of being turned into commercial products. Commercial Goals The reason SBIR exists, federal officials say, is to make new technologies available to the consumer. "By its very nature," explains Henry Roscoe, who coordinates the program for the National Heart, Lung and Blood Institute (NHLBI), "SBIR is geared toward developing some equipment or apparatus that will eventually be commercialized." In 1989 NIH alone made 503 SBIR awards, totaling $71 million, to hundreds of small companies around the country. One of those recipients was Thomas Mix, a chemical engineer with a doctoral degree from the Massachusetts Institute of Technology in Cambridge. Mix is a veteran of the SBIR program, having received more than 20 such awards from a variety of federal agencies. As president of Merix Corp. of Needham, Mass., a two-person company that works in specialty materials and separations, Mix won a Phase II SBIR award from the National Cancer Institute to help him improve the standard diagnostic procedure used in examining patients suspected of having colon cancer. His facilitated colonoscopy, Mix told NCI, "could provide a more thorough, rapid, and economical screening of a wider patient population." Mix is doing exactly what government officials intended when the SBIR program was created: He's using federal funds to speed a new technology from the lab bench to the marketplace. And his approach--collaborating with university scientists who are willing to try out his new devices--is the time-honored way for an independent investigator to gain access to a large medical facility and a sufficient number of patients to find out if his device actually works as planned. Even so, Mix says, his collaborators have become much more careful in recent years about avoiding potential conflicts of interest. Part of the reason may be heightened concern from Congress on how federal funds for biomedical research are spent. In fact, hearings held by Reps. John Dingell (D-Mich.) and Ted Weiss (D-N.Y.) have been instrumental in prodding the government to draft the current set of proposed rules. "I've noticed that the faculty of MIT and Harvard are much more sensitive to the issue of conflict of interest than was the case two or three years ago," Mix observes. That sensitivity can take several different forms, he adds, ranging from being careful about who takes credit for a new technology to the selection of the right investigator to perform the clinical trials on a new product. "If you have a program that involves interaction with a university, for example, you need to decide whether you want to share a proprietary position with them," says Mix. "If not, you can't share facilities and you can only use that faculty member in a consulting role." Once the initial work has been done, Mix says, institutions must continue to take steps to preserve the integrity of the clinical investigator. "If someone does want to work with us, and the university gives its approval, then that person has to be careful to step aside when it comes to clinical trials," he says. "You don't want to have a faculty member who is a party to the invention also be involved in evaluating its performance." By their very nature, SBIRs deal with emerging technologies, and few are ready for large-scale commercial development. While obtaining an SBIR award from NIH stamps the idea with the imprimatur of the country's leading biomedical research institution, the potential product's fledgling status gives the government some protection against real or imagined conflicts of interest, say NIH officials. "The minimum amount of money that you need to commercialize a product is $2 to $3 million," estimates John Watson, head of the devices and technology division at NHLBI. "And many cost $5 to $10 million. The government's share only gets them started. It indicates that something is viewed positively by their peers and has a chance to be commercialized. But there's a lot of work that must be done before anything gets onto the market." Perhaps the greatest deterrent to potential conflicts of interest among SBIR grantees, say scientists and NIH administrators, is the desire to have one's work taken at face value. "You want the endorsement of an objective, unbiased, and prominent person in the field to win acceptance from the scientific community," says Mix, describing how his company selects a collaborator. "The more highly respected the person, the better it is for you." Galasso agrees. "The reality is, when a physician reads in the New England Journal of Medicine that drug X works wonderfully, and then in a footnote he reads that Dr. Y owns stock in the company, he's likely to say, `I think I'll wait until someone does the work.' "And as an NIH official, I don't want to spend $10 million on a clinical trial and have people doubt whether it's valid."

Scientific Conflict Of Interest Regulations Offer Loophole To Small Business Program

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