Panel Wants Top Health Officials Off Drug Payrolls

Times Staff Writer

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 of 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 income-disclosure reports.


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 questions 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 phone Tuesday.

“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 enough.”

“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 appearance 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 products.

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 interest.”

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 they’re required 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 NIH.

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.