NIH Scientists Gripe At Ethics Rule: NO Stocks in Pharmaceutical Companies – LAT / WSJ

Sat, 5 Mar 2005

A group of dissident NIH scientists represented by an 18 member executive committee, are gripping about new rules prohibiting them from accepting fees for outside activities. Conflict of interest rules apply to employees at all government agencies. But former NIH director, Dr. Harold Varmus, had waived the rules ushering in a culture of special privilege. The dissidents say the rule would render them “second-class citizens.”

The dissidents are especially piqued at the prohibition against holding stocks in biomedical companies. The Los Angeles Times whose documented investigative reports brought the abuses to light, resulting in the new restrictions on financial ties with drug and biotech companies, reports: "At least 530 agency scientists accepted fees, stock or stock options from the biomedical companies between 1999 and 2003."

Four months ago 180 NIH staff members signed a letter complaining about the new rules to NIH director, Dr. Elias Zerhouni. The LAT reports that among those who signed the letter was "Dr. H. Bryan Brewer Jr., who had helped draft national guidelines urging more aggressive use of drugs to lower cholesterol while collecting stock options and about $114,000 in consulting fees from companies making or developing cholesterol medicines."

The LAT reports are based on an exhaustive examination of documents, identifying NIH staff and their financial ties to industry.

The Wall Street Journal suggests that aside from the financial restrictions, the rules "have angered NIH lifers on a deeper level: Their pride is hurt. Internal NIH scientists — who have included five Nobel laureates — tend to want to be treated more like academic rock stars, not as functionaries in the bowels of the federal work force. To many of them, the rules reek of diminished status."

The LAT reports that one-third of the 18-member executive committee of dissidents have recently had financial ties to biomedical companies. Dr. Ezekiel Emmanuel, NIH bioethicist who leads the dissidents, expressed anger to the WSJ reporter, stating that he was forced to sell stock valued at $140,000 last month.

Whatever the dominant force behind the self-righteous outrage–greed, pride, a sense of entitlement – none is a legitimate reason for awarding NIH staff special privileges. In this context, as my husband, Itzhak Sharav, the accounting professor, might say, don’t forget Murphy’s principle: "When somebody tells you it’s not the money but the principle, I’ll lay you a thousand to one, it’s the money."

Contact: Vera Hassner Sharav
212-595-8974

New Rules Will Cost Dissidents at NIH
A panel of scientists is fighting the agency’s ban on consulting with drug firms. A third of them have profited from such deals in recent years.
By David Willman
Times Staff Writer
March 3, 2005

WASHINGTON – When a group of senior government scientists announced their opposition to new and restrictive conflict-of-interest rules at the National Institutes of Health last week, they complained that the agency’s mission was in danger of being irreparably compromised.

They said the new rules, which ban NIH employees from accepting consulting fees or stock options from biomedical companies, would victimize even food handlers and elevator operators.

But unmentioned in their prepared statement was another, more personal impact: One-third of the 18-member executive committee leading the dissidents has accepted consulting fees or stock options from biomedical companies in recent years, records show.

The fees totaled more than $400,000, according to the records. One committee member received stock options for 500,000 shares as compensation from a company.

The committee was elected by colleagues to “address the current …situation” and the new rules, according to the Internet site of the protesting NIH employees, named the Assembly of Scientists.

Scientists at the NIH also are being ordered to divest ownership of stock in any pharmaceutical, biotechnology or related company. Other NIH employees, including the food handlers and elevator operators, must divest holdings exceeding $15,000 in value in any individual company in the biomedical field.

The tighter restrictions are scheduled to take effect Saturday. Nonetheless, NIH employees are at liberty to file formal comments in the hope of winning future changes.

When he announced the new rules Feb. 1, NIH Director Elias A. Zerhouni said that consulting payments from drug companies to staff scientists were a “systemic problem” that undermined confidence in the agency’s research.

Zerhouni said he was acting in response to reports published in the Los Angeles Times that became the focus of four congressional hearings last fall.

Citing interviews and agency and company records, The Times reported that senior NIH researchers and laboratory chiefs who helped design or oversee clinical trials had accepted industry compensation. The directors of two major NIH institutes – whose duties included overseeing clinical trials – accepted hundreds of thousands of dollars in fees or stock options.

At least 530 agency scientists accepted fees, stock or stock options from the biomedical companies between 1999 and 2003, according to the NIH and company documents. Other records, submitted to Congress last year by 20 biomedical companies and then vetted by Zerhouni’s aides, have identified about 50 NIH scientists who accepted industry payments but either failed to get required approvals from the agency or did not report the income internally.

The compensation from the companies to the scientists was allowed because many restrictions were lifted in November 1995 by a former NIH director, Dr. Harold E. Varmus.

The statement issued last week by the group of NIH scientists was the latest sign of resistance to tighter ethics rules among some staff members at the agency.

Four months ago, 180 staff scientists signed a letter to Zerhouni urging him not to embrace tougher rules that they say would render them “second-class citizens” by reducing their outside activities. Among those who signed the letter was Dr. H. Bryan Brewer Jr., who had helped draft national guidelines urging more aggressive use of drugs to lower cholesterol while collecting stock options and about $114,000 in consulting fees from companies making or developing cholesterol medicines.

Last March, about a dozen NIH scientists voiced opposition to tighter rules during public sessions of a blue-ribbon committee that was appointed by Zerhouni to evaluate the agency’s policies.

Among those who spoke in opposition was Dr. Lance A. Liotta, a laboratory chief at the National Cancer Institute. Interviews and government records would later show that Liotta – while leading the government’s collaboration with a Maryland company to develop a test for early detection of ovarian cancer – had accepted $70,000 in fees from a competitor firm. Liotta did so with the approval of his supervisors at the National Cancer Institute.

Government officials familiar with the matter said this week that the NIH had referred Liotta for investigation by the inspector general’s office of the U.S. Department of Health and Human Services. The inspector general has authority to subpoena documents and to question witnesses. It also may refer a matter for criminal prosecution to the Justice Department or to a local U.S. attorney’s office.

Liotta’s lawyer, Charles J. Morton Jr., said Wednesday: “We have not been informed of any such investigation…. That being said, Dr. Liotta has and will continue to cooperate with any investigation relating to his outside activity.”

An unspecified number of other NIH employees who have taken fees or stock options from biomedical companies remain under internal review, officials said this week. Some, including Dr. P. Trey Sunderland III – an Alzheimer’s disease researcher who accepted fees totaling over $500,000 from drug industry giant Pfizer Inc. without seeking permission or reporting the income to the NIH as required – already have been referred to the inspector general.

In its prepared statement last week, the committee of dissident NIH scientists did not explicitly defend or condemn the acceptance of stock options or consulting fees from the drug industry. But the group said that Zerhouni’s sweeping conflict-of-interest restrictions generally would “discourage talented, innovative scientists from staying at or being recruited to the NIH.” The group also complained that the restrictions prohibited “nearly 40% of NIH employees,” along with their spouses, from holding stock in individual biomedical companies.

Interviews and financial-disclosure reports examined by The Times found that the following members of the committee accepted fees or stock options from industry in recent years, consistent with the then-existing rules:

€ Dr. William E. Paul, chief of the laboratory of immunology at the NIH’s National Institute of Allergy and Infectious Diseases. Paul from 2000 to early 2004 accepted a total of $380,000 in fees from Suntory Pharmaceuticals Research Lab and Novartis AG, plus $40,000 in travel expenses from Novartis. The records show that Paul had agreed to remain a consultant with the two companies through 2011, with estimated total future fees of $470,000. Paul said Wednesday that he had won a temporary exemption from the NIH director’s office to continue consulting for Novartis through March 11, in order to complete an assignment for the company.

Paul said that he opposed the NIH’s new ban on compensation from the biomedical companies. He said that he favored case-by-case reviews, “by a knowledgeable group.”

€ Howard A. Young, a microbiologist and section chief in the National Cancer Institute’s laboratory of experimental immunology. Young received stock options for 500,000 shares from Advanced Viral Research Corp. from 2002 to 2003 to compensate him as a consultant.

In an interview, Young said he was “not planning to exercise any of the options.” Young said he opposed the ban on paid consulting with industry and favored case-by-case assessments. He said he resigned recently from Advanced Viral’s scientific advisory board.

€ Dr. Harvey J. Alter, a blood-transfusion specialist at the NIH Clinical Center, the world’s largest center for medical research on humans. Alter accepted $34,000 from six companies from 2001 to 2003. Responding by e-mail, Alter declined to say whether he supported or opposed the ban on compensation from the companies.

€ Dr. Steven K. Libutti, a researcher and surgeon with the National Cancer Institute. Libutti accepted $21,000 in consulting fees from two biomedical companies, Peregrine Pharmaceuticals Inc. and Therapro Consulting, from 2003 to 2004. Libutti said Wednesday that he was no longer a consultant to industry. Asked if he supported the NIH’s ban on all consulting income from the biomedical industry, Libutti said he preferred case-by-case assessments. “Each case is unique,” he said.

€ Earl R. Stadtman, a biochemist with the National Heart, Lung and Blood Institute. He was a scientific advisor to Centaur Pharmaceuticals Inc. as recently as May 2000, according to a financial report the company filed with the Securities and Exchange Commission. NIH records show that Stadtman received $8,000 in consulting fees from Centaur and the Burroughs Wellcome Fund from 1995 through 1999. Stadtman said that he lacked permission from the agency to answer questions for this article.

€ Dr. Cynthia E. Dunbar, a hematologist with the National Heart, Lung, and Blood Institute. In 2003, Dunbar received consulting-related compensation of $1,370 from MolMed, an Italy-based biotechnology company, and was to have remained an occasional, paid consultant to the company. Dunbar said she had done nothing for MolMed since 2003, adding: “I personally support the global consulting ban as at this point necessary, but in my role on the [executive] committee we are working to come to a consensus on this issue.”

In an in e-mail distributed to NIH employees on Tuesday, a deputy agency director, Dr. Raynard S. Kington, said that by Saturday, “you must stop prohibited outside activities.” Meanwhile, the executive committee members of the Assembly of Scientists were to meet late Wednesday to plan their next moves.

“A lot of us feel this has stretched [restrictions] too far,” said Young, one of the committee members.

Times researcher Janet Lundblad in Los Angeles contributed to this report.

THE WALL STREET JOURNAL
Some Scientists Say New Ethics Rules May Damage NIH
By BERNARD WYSOCKI JR.
March 3, 2005; Page B1

BETHESDA, Md. — The taxpayer-funded National Institutes of Health long has been a magnet for some of the world’s top scientists, drawn to its state-of-the-art laboratories, intellectual freedom, high-powered peers and good pay.

Now the federal government wants to treat these government employees more like, well, government employees. That is causing an uproar at the NIH, with some senior scientists predicting long-term damage to the organization’s recruiting and employee-retention goals.

The griping stems from stringent new ethics rules announced last month by NIH Director Elias Zerhouni to combat complaints from Congress and watchdog groups that some NIH scientists had lucrative outside activities that might be conflicts of interest. The new rules ban all 18,000 NIH staffers from consulting for the drug industry and other biomedical-related organizations. Dr. Zerhouni also announced that about 6,000 NIH employees would be barred from holding stock in pharmaceutical or biotechnology companies and must sell their current holdings. The rules restrict holdings of drug or biotechnology stocks by other NIH employees and sharply curtail honoraria.

While the rules are tougher than those that govern many federal employees, they are much like those that apply to people holding other sensitive federal jobs, such as scientists at the Food and Drug Administration.

Nevertheless, NIH scientists say they already are seeing the effect of the stricter rules. Elaine Jaffe, a section chief at the NIH’s National Cancer Institute, says she is struggling to hire a post-doctoral cancer specialist for a two-year fellowship. The candidate has consulting arrangements with a private company, which he might have to sever to join the NIH.

“He has multiple offers and needs an answer” as to whether the rules apply to him, says Dr. Jaffe, one of about 15 NIH scientists leading opposition to the new rules. She says she doesn’t want to recruit him on false pretenses but also doesn’t want to “sacrifice the quality” of new recruits. (NIH officials say they are “reviewing” whether the rules apply to post-doctoral fellows.)

The rules also have angered NIH lifers on a deeper level: Their pride is hurt. Internal NIH scientists — who have included five Nobel laureates — tend to want to be treated more like academic rock stars, not as functionaries in the bowels of the federal work force. To many of them, the rules reek of diminished status.

Even worse, the rules, which go further than previous restrictions imposed during the past few years, give many scientists the feeling they aren’t trusted. One rule: a ceiling of $200 on honoraria. The implication “is that I can be bought for $200,” says Edward Korn, chief of the laboratory of cell biology at the National Heart, Lung and Blood Institute and 50-year NIH veteran. “Many of us think it’s a personal insult.” Like many colleagues, Dr. Korn says he believes in tough ethics rules but thinks the new ones “overreach.”

An NIH scientist who is a leader of the opposition to the new rules, Ezekiel Emanuel, says he was forced to sell stock valued at $140,000 last month, noting that he can’t own, for example, General Electric Co. shares because it has a medical-imaging division. The tight rules apply “to my secretary, to the cleaning lady, to the electrician,” Dr. Emanuel says. “Rather than prevent conflict of interest, the rules take a meat cleaver” to outside activities and stock ownership, he adds. (Dr. Emanuel is the brother of Rahm Emanuel, a Democratic congressman from Illinois and former Clinton White House official.)

It isn’t the only gripe NIH scientists have these days. The NIH’s annual budget has reached a plateau after a five-year period in which it doubled to $28 billion. Its scientists also complain of a steady increase in what they call petty rules and bureaucratic procedures.

The tough ethics rules were designed to restore public trust in the NIH after months of revelations that some NIH scientists and officials enjoyed lucrative income from outside dealings with drug companies and others. In one case, a senior Alzheimer’s researcher received more than $500,000 from Pfizer Inc., which markets a leading drug to treat the disease. The scientist never disclosed the payments; the information surfaced after congressional investigators received voluntary disclosure of these and other payments from drug companies. In another case, an NIH scientist was working with a biotechnology company in an official capacity but also quietly was moonlighting at a competitor to that company.

Last summer members of Congress grilled Dr. Zerhouni in public and pressured him to tighten NIH ethics guidelines. Pressure also came from the Department of Health and Human Services, of which NIH is a part, and the Office of Government Ethics, which oversees ethics within the executive branch.

The tight guidelines mark a reversal of a mid-1990s strategy to loosen NIH ethics rules to put its researchers on a par with their peers at universities. That push was led by then-Director Harold Varmus, a Nobel laureate, who left in 1999 and now is president of Memorial Sloan-Kettering Cancer Center in New York. Under Dr. Varmus, the NIH boosted salaries by putting thousands of its scientists in a special, alternative pay category called Title 42 that allows top employees to earn as much as $200,000 a year, far above U.S. civil-service levels. Dr. Varmus also loosened restrictions on getting compensation from outside consulting activities, a perk routinely available to university scientists.

The potential competition from academia hasn’t faded. Dr. Zerhouni says he is alert to possible problems of recruiting and retaining talent and that is why the rules will be reviewed within a year and then possibly modified. He doubts the rules will produce wholesale exodus from the NIH but acknowledges the raw sentiments within the work force. “There is a sense of collective punishment” for the wrongdoing or dubious behavior of a few, Dr. Zerhouni says. “At a subliminal level, that makes them feel not only second class, but victimized and scapegoated.” The feeling is understandable but as government employees, Dr. Zerhouni adds, NIH personnel have to be held to a higher ethical standard than counterparts elsewhere.

It is uncertain whether the unhappy climate will lead to large-scale departures. NIH turnover rates have been falling since 2000 and for all their complaining, scientists may not be inclined to uproot their families and leave NIH’s leafy campus and the cutting-edge research that occurs there.

That said, some scientists warn that universities can be aggressive in their recruiting. NIH researchers are big draws, whether for their ability to help universities extract grant money from the NIH (about 80% of its budget flows to non-NIH scientists, mostly working at universities) or for the expertise they bring.

Albert Fornace, a star scientist at the NIH for 27 years, decamped last month to become a professor at Harvard School of Public Health, Boston. He says a number of factors prompted his departure, but the new ethics climate was an important consideration. “The ethics rules are irritating. I kind of feel you aren’t been treated as an adult, or even trusted,” Dr. Fornace says. “I think the NIH is a wonderful place to do research,” he adds. “You can do high-risk research.” He predicts, though, that recruiting and retention problems will mount. “I feel bad about NIH,” he says.

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