Panel Wants Top Health Officials Off Drug Payrolls
By David Willman,
Times Staff Writer
May 7, 2004
BETHESDA, Md. — Senior officials at the National Institutes of Health
should be barred from accepting income of any kind from drug companies, a
panel examining conflict of interest at the agency recommended in its
final report Thursday.
The long-anticipated report of the Blue Ribbon Panel on Conflict
Interest Policies places the greatest pressure to date on NIH Director
Elias A. Zerhouni to toughen agency policies. The report urged Zerhouni to
adopt the recommendations "as quickly as possible."
Zerhouni appointed the 10-member panel in response to articles in the Los
Angeles Times in December revealing that NIH employees had accepted
hundreds of payments from drug companies totaling millions of dollars, and
that more than 94% of the top-paid NIH employees were not filing public
The panel also recommended that nearly all of the 5,000 or more career
scientists at the NIH be prohibited from accepting stock or stock options
as compensation. "This is needed to assure the continued, deserved public
confidence in the extraordinary work of NIH," the report concluded.
However, the panel said that most career NIH scientists should be allowed
to accept company consulting fees and should not be required to publicly
disclose such payments — a position that is likely to draw questio
next week at a congressional hearing into NIH's relations with industry.
Zerhouni did not say whether he would embrace the recommendations. The NIH
director told reporters Thursday that he wanted to meet "one more time"
with the panel.
Zerhouni is already under pressure to enact changes.
The inspector general at the Department of Health and Human Services is
investigating the conduct of several NIH employees, according to people
familiar with the inquiry.
Both the inspector general and the General Accounting Office, the
investigative arm of Congress, are examining NIH ethics policies. And the
House Oversight and Investigations Subcommittee has scheduled for
Wednesday the first of what are expected to be at least two hearings this
spring into drug company payments to NIH employees.
Just before the blue-ribbon report was released, the subcommittee's
chairman said the NIH had not complied with requests to identify all of
the agency scientists who have accepted payments from industry in recent
years, and the circumstances surrounding those arrangements.
Rep. James C. Greenwood (R-Pa.) said that he complained to Zerhouni by
"I told him I thought we'd been slow-rolled and stonewalled," Greenwood
said in an interview. "As far as I'm concerned, widespread reluctance to
divulge this information is the message in and of itself."
A senior Democrat on the subcommittee, Rep. Henry A. Waxman of Los
Angeles, said that, contrary to the blue-ribbon panel's recommendations,
the NIH should require far-reaching public disclosure of any payments from
drug companies. The blue-ribbon report, he said, "doesn't appear to go far
"We know that there are financial relationships at all levels, not just at
the top, and the taxpayers deserve to know the extent of those
relationships," Waxman said.
When Zerhouni appears before the House subcommittee Wednesday, he is to be
joined by the two men he appointed to co-chair the blue-ribbon panel:
Bruce Alberts, president of the National Academy of Sciences; and Norman
R. Augustine, retired chairman of Lockheed Martin Corp.
Both Alberts and Augustine lauded and thanked the NIH staff for its
assistance in the panel's work. Their goal, the co-chairmen said, was to
"do no harm," while making recommendations to strengthen the agency's
handling of conflicts of interest.
In explaining why they proposed a complete ban on employees accepting
company stocks or stock options, Augustine and Alberts said such
compensation could prompt people to become unduly concerned with a
company's financial success.
Of the NIH scientists now employed as paid consultants to
industry, roughly 25% of them have been paid in such securities,
Augustine said. The panel reported that 120 NIH scientists as of this
month have active consulting deals. Zerhouni noted that as of late
January, the total stood at 228 scientists. He
acknowledged that some employees could be waiting for the agency's
policies to be resolved before resuming outside employment.
Under the panel's recommendations, outside pay would not
exceed 50% of the
employee's government salary, and the employees would devote no more than
400 hours a year to such outside arrangements.
The scores of NIH officials who would be barred by the new recommendations
from receiving compensation from companies would be the directors of the
agency's 27 research institutes and centers, plus all deputy directors,
officials who direct research on humans, scientific directors and
officials responsible for dispensing NIH grants.
"Because of the public and national leadership roles played by senior
NIH officials, financial relationships with industry may have the
of giving preference to certain private interests over the public's
interests or of giving preference to one private interest over another,"
the report said.
The panel recommended that senior employees at the NIH begin filing annual
income-disclosure reports that were open to public inspection. Zerhouni
early this year ordered at least 93 additional officials to begin filing
the public disclosure reports.
But the panel declined to endorse such disclosure for many other NIH
employees. Instead, the panel called for increased "internal disclosure"
by NIH employees of outside income. Such disclosures would be exempt from
the Freedom of Information Act, keeping payments to employees from drug
companies locked from public view.
As an alternative to banning paid deals with industry or requiring far
wider public disclosure, the panel saluted Zerhouni's recent formation of
an ethics advisory committee, composed of senior agency officials, which
evaluates employees' requests to engage in paid deals with drug companies
and other entities.
Augustine and Alberts said that they feared that an agencywide ban could
impede hiring or retaining the best scientific talent; that they wanted
the NIH's policies to be consistent with those of major universities that
allow faculty to moonlight; and that consulting for industry could help
translate scientific discoveries into beneficial health treatments or
Representatives of the NIH distributed advance copies of the blue-ribbon
report Wednesday to members of Congress. One, Sen. Edward M. Kennedy
(D-Mass.), said the panel's "thoughtful recommendations will help NIH make
certain that its integrity is untarnished by financial conflicts of
Kennedy termed the report an "urgent call for positive change," saying,
"Congress has a responsibility to give Dr. Zerhouni and NIH the strong
support they need to implement these essential reforms."
Others greeted the report less enthusiastically.
If Zerhouni continues to embrace drug-company consulting payments for NIH
employees while resisting full public disclosure, the public will be
ill-served, said Michael S. Josephson, a lawyer in Los Angeles who
specializes in ethics and conflict-of-interest policy.
"We need to try to prohibit those kinds of relationships which under the
best of circumstances can create an appearance of impropriety," Josephson
said, adding, "Disclosure provisions are cumbersome, but
of all kinds of government officials, because experience has taught us
that the 'trust us' rationale is not reliable. Transparency is the
most effective antidote."
Much of the specific conduct detailed by The Times would be prohibited
under the changes recommended by the blue-ribbon panel.
For instance, two senior-level officials, Dr. Stephen I. Katz, director of
the National Institute of Arthritis and Musculoskeletal and Skin Diseases,
and Dr. John I. Gallin, director of the NIH Clinical Center, accepted
hundreds of thousands of dollars in industry consulting payments.
On Thursday, Zerhouni noted that both Katz and Gallin, whose federal
salaries were $200,000 and $225,200, respectively, ended their involvement
with the companies after publication of the articles in The Times. Both
officials have said that their outside deals were approved by others at
The blue-ribbon panel's report said that the group "did not investigate
specific allegations or review individual cases under investigation
elsewhere." The report did not elaborate.