NIH Directors No Longer Drug Firm Consultants

By David Willman and Jon Marino, Times Staff Writers

WASHINGTON — Top-level officials at the National Institutes of Health — amid sharp criticism from congressional leaders — have stopped accepting consulting fees and stock options from drug companies, the agency's leader told a Senate hearing on Thursday. "As of this moment, no director has any outside biotechnology or pharmaceutical relationship," said the leader of the NIH, Dr. Elias A. Zerhouni, referring to the directors of the agency's research institutes and centers. "Those have been stopped."

Sen. Arlen Specter (R-Pa.), the chairman of the Appropriations subcommittee on labor, health and human services and education, nevertheless told Zerhouni and other NIH officials at the hearing that "there are really major problems here." Specter, who reminded the officials that he had helped double the NIH budget in recent years, added, "I believe there will have to be very substantial remedial steps taken."

Citing paid arrangements between biomedical companies and senior NIH scientists disclosed last month by The Times, Specter asked if ongoing consulting deals for all NIH employees could be suspended immediately.

Specter also voiced dissatisfaction with policies and decisions that have exempted about 94% of the NIH's highest-paid employees from having to publicly disclose payments from drug companies or other outside employers.

"Is there any reason why a governmental employee making as much as the vice president should not be required to fill out a public financial disclosure form?" Specter asked.

"This subcommittee is prepared to do it if you don't. And we're prepared to get into changes in law, if you don't come up with something that's adequate."

The NIH is the federal government's center for medical research on humans. Its top scientists are among the highest paid employees in the government, and its studies can affect the commercial viability of new drugs and the stock prices of biomedical companies.

Government lawyers at the hearing said new regulations probably would have to be enacted to achieve Specter's goals. An ethics attorney representing the Department of Health and Human Services, Edgar M. Swindell, said that the NIH could adopt restrictions in place at the Food and Drug Administration, where employees are prohibited from owning stock in companies that may be affected by the agency's decisions.

Zerhouni told the subcommittee that an internal review he initiated recently found that since 1999, a total of 527 agency employees had engaged in paid consulting arrangements with 1,515 outside employers. As of this month, 228 of the employees have active long-term deals with 365 nongovernment employers, Zerhouni and other NIH officials said.

Zerhouni did not identify how much money had been paid to the NIH scientists in fees or stock options from biomedical companies.

"It is obvious that this poses a very, very substantial problem," Specter said.

The consulting deals also drew criticism from Sen. Tom Harkin (D-Iowa), with whom Specter teamed to boost the NIH budget. Harkin said that consulting for drug companies by top NIH officials risked conferring "a big stamp of approval."

Harkin said that he strongly supported companies participating in the "translating" of basic research conducted at the NIH into remedies that can be administered to patients. However, Harkin said, the translation should not involve financial payments to NIH employees.

"There needs to be cross-fertilization," Harkin said. "But in that … process, people at NIH have to have absolutely clean hands."

Harkin also took aim at the system of pledges, called recusals, that NIH officials have routinely filed, promising not to participate in government matters affecting their company clients.

"I'm concerned that they may not be doing their main job, their NIH job," Harkin said.

The third senator who attended the hearing, Sen. Ted Stevens (R-Alaska), said he was comfortable with financial ties between NIH scientists and industry. The relationships, he suggested, could spur development of useful medicines.

For his part, Zerhouni said that although he wanted to wait for recommendations from a panel of outside advisors, he generally supported requiring more public disclosure and imposing tighter restrictions on consulting with biomedical companies.

"I have reached the conclusion that NIH must make changes that will appropriately restrict current practices," Zerhouni said, adding that he wanted to "completely review the decision" in 1995 by then-NIH Director Harold E. Varmus to lift restrictions on paid outside consulting.

An internal memo from Varmus authorized NIH employees to accept company stock as compensation for consulting. Said Zerhouni, "We believe very seriously that stock ownership should be treated differently." The Varmus memo also allowed directors of the 27 NIH institutes and centers to accept consulting payments from drug companies.

Two directors whose consulting fees were reported by The Times on Dec. 7, Dr. John I. Gallin, director of the NIH Clinical Center, and Dr. Stephen I. Katz, director of the National Institute of Arthritis and Musculoskeletal and Skin Diseases, have recently decided to stop accepting such payments, Zerhouni and the two institute directors said.

Gallin and Katz told the hearing that all of their consulting activities had been approved by NIH officials, within the agency's rules. Katz said that he had served the NIH "with the highest integrity."

Two other senior NIH officials whose consulting arrangements were reported last month by The Times, Dr. Ronald N. Germain, deputy chief of the Laboratory of Immunology at the National Institute of Allergy and Infectious Diseases, and Jeffrey Schlom, chief of the Laboratory of Tumor Immunology and Biology at the National Cancer Institute, said that all of their actions had been proper.

Zerhouni told the subcommittee that he has seen no indication that paid consulting with biomedical companies has influenced medical decisions or compromised the safety of patients at NIH.

After the hearing, Zerhouni told reporters that, "personally, I think if you have authority over a process, it is much better not to have relationships that can lead to questions as to your integrity and independence of judgment."

Zerhouni announced in his prepared remarks that he has appointed co-chairmen of a previously announced panel that would advise him on conflict-of-interest issues: Bruce Alberts, a biochemist who has served as president of the National Academy of Sciences since 1993; and Norman R. Augustine, a longtime military-aerospace industry executive who also served as undersecretary of the Army during the Ford administration.

Zerhouni and his aides have promised to fully cooperate with any congressional inquiries. However, the chairman of the House Commerce oversight and investigations subcommittee, Rep. James C. Greenwood of Pennsylvania, said Thursday that the NIH has been "slower than we wanted." The House panel had requested by Jan. 8 a range of documents related to the consulting with drug companies done by NIH employees.

"I had to have a conversation with Dr. Zerhouni about a week ago to express some concern that I had about lack of specificity in some of the documents," Greenwood said. "We have an understanding now that we'll get what we want."

John Burklow, a spokesman for Zerhouni, said that documents were being gathered and assembled in preparation for release to the House subcommittee. Also in the House, three senior Democrats, Henry A. Waxman of Los Angeles, John D. Dingell of Michigan and Sherrod Brown of Ohio, last week asked the General Accounting Office, the investigative arm of Congress, to examine the policies and circumstances surrounding consulting deals entered into by NIH employees.

Specter, who requested additional, written responses from several officials, concluded the two-hour hearing by cautioning NIH leaders that they must make significant changes.

"We will work hard to see to it that whatever conflicts exist or appearances exist we rectify to maintain public confidence," Specter concluded.

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