NIH Director Zerhouni Says He Will Seek Changes in New Conflict-of-Interest Rules
NIH Director Elias Zerhouni on Wednesday at a Senate Labor-HHS Appropriations Subcommittee hearing said that he will seek to alter the agency's new conflict-of-interest rules because it is "very clear" that a provision requiring employees to divest health-related stock would have a "deleterious impact" on NIH, the Baltimore Sun reports (Baer, Baltimore Sun, 4/7). Under the rules, NIH employees will be barred from entering outside consulting agreements with pharmaceutical companies, hospitals, health insurers and health care providers. The guidelines also will mandate that about 6,000 top NIH employees cannot hold stock in pharmaceutical or biotechnology companies and require current stockholders in the group to sell their shares. NIH Deputy Director Raynard Kington recently said that the agency's 1,300 temporary research fellows can continue to hold biomedical stocks. He said the fellows still will be required to disclose their financial information to NIH on an annual basis. Kington added that the fellows, who can work at NIH for as long as four years, will be examined on "case-by-case analyses" to prevent conflicts of interest. In addition, permanent staff will be given an additional six months -- until Oct. 3 -- to divest their biomedical holdings, Kington wrote in a memo. Other agency employees must divest by the same date any holdings of health-related stocks that exceed $15,000 in value for a particular company. NIH officials said they do not plan to change the policy's provision on accepting consulting fees from companies. The new policy, announced Feb. 1 by Zerhouni, is scheduled to become final this month (Kaiser Daily Health Policy Report, 4/4).
Zerhouni Comments
At the hearing, Zerhouni said that he remains committed to the ban on employees accepting consulting fees until NIH develops a better monitoring system. However, he said that he agrees with continuing criticism that the stock divestiture requirement is too strict. "The philosophy of the ... regulations is, in my view, one that would be appropriate for a regulatory agency rather than a scientific agency," Zerhouni said. He added that the uncertainty over the rules alone "can be damaging to morale, damaging to recruitment and retention." Zerhouni noted that the rules have caused several employees to announce their departures (Baltimore Sun, 4/7). James Battey, chair of the NIH Stem Cell Task Force and director of the NIH National Institute on Deafness, recently announced his decision to leave the agency because of the divestiture requirement. In addition, David Schwartz, a physician nominated to become the new director of NIH's National Institute of Environmental Health Sciences, has indefinitely postponed assuming his role because of concerns about the conflict-of-interest guidelines (Kaiser Daily Health Policy Report, 4/4). Zerhouni said Battey and Schwartz's actions show that a "more selective approach" is needed on the issue of stock holdings, though he did not specify how the provision could be changed. He noted that HHS officials and the Office of Government Ethics have final say over whether the rule can be changed. Zerhouni also said a rule change could help NIH retain Battey, who said that his decision is not "irrevocable" and that there is "a set of circumstances" under which he would stay (CQ HealthBeat, 4/6).
Lawmaker Comments
Sen. Tom Harkin (D-Iowa) said the new rules are "too onerous, and they must be redone soon, before [NIH] lose[s] more people." He added, "I think we've gone overboard." Subcommittee Chair Arlen Specter (R-Pa.) added that lawmakers will recommend ways to loosen the rules.
NIH Budget Cuts
During the hearing, senators also "decried proposed cuts in the NIH budget" in the House and Senate fiscal year 2006 budget resolutions, CongressDaily reports. The Senate version restores about $1.5 billion to NIH, but Specter said it "will be a battle" to keep the extra funding in the budget. Zerhouni said NIH would be forced to eliminate about 400 grants if the funding is not included in the final budget (Heil, CongressDaily, 4/6).
NPR's "All Things Considered" on Wednesday reported on the possible rules change. The segment includes comments from Battey, Harkin, Specter and Zerhouni (Malakoff, "All Things Considered," NPR, 4/6). The complete segment is available online.
