Financial Conflict of Interest Notice of Proposed Rulemaking Press Briefing
May 20, 2010
11:30 am ET
John Burklow: Good morning everyone and welcome to the NIH Press Briefing on the proposed changes to the financial conflict of interest regulations. We'll be hearing from NIH Director Dr. Francis Collins and we'll follow up with a Q&A.
We also have Dr. Sally Rockey, Deputy Director for Extramural Research at NIH, on the line for other questions as well. So I'll turn it over now to Dr. Collins.
Francis Collins: I'm glad to be able to join this call to tell you about the notice of proposed rulemaking about financial conflicts of interest which will be posted in the Federal Register, tomorrow, May 21.
This so-called NPRM is entitled Responsibility of Applicants for Promoting Objectivity in Research for which Public Health Service Funding is Sought and Responsible Prospective Contractors. This proposes changes to existing regulations that have been in place since 1995. And this NPRM will be open now for public comment for 60 days.
I want to put this in context for a moment. Clearly the way in which science is moving forward in order to be successful and particularly so when it comes to the development of new diagnostic and therapeutic advances partnerships between NIH-funded researchers and industry are essential; they have been and they will be.
At the same time we need to be clear that in order to preserve the public trust in the objectivity of biomedical and behavioral research all research has to be conducted without bias and with the highest scientific and ethical standards.
This notice of proposed rulemaking will be a substantial change in the way in which NIH seeks to oversee potential financial conflicts of interest and will make some differences for investigators who are in universities and institutes and in small businesses who are being supported by NIH funds in terms of the disclosure requirements that will now be put in front of them.
And again I'm saying this - this is what the NPRM says and we'll see what the public comments have to say. This will not be finalized until later this year after receiving those comments.
A few examples of the changes the de minimis threshold for reporting will be reduced from $10,000 to $5000. The responsibility for deciding about whether a particular relationship is a potential financial conflict of interest will now rest upon the institution as opposed upon the investigator so that the institution is therefore required to set up a process to review such potential conflicts of interest to identify those that may need an intervention and to report to NIH its actions in that regard.
This will now include SBIR and STTR, Phase 1 applications which were previously not included. It will exclude, however, income from seminars, lectures or teaching or service on advisory or review panels for government agencies or institutions of higher education.
And there will be a disclosure component to this. So where institutions will now be required to develop a publicly accessible Website, that will display significant financial interests of their faculty and other institutional members in order for the public to have a clear pathway towards identifying what kinds of arrangements have been made so that there is transparency to the process.
We believe that in the past the process that has been followed for the most part has been successful. And again I don't mean to imply in any of the things that I'm saying that I think there has been a widespread problem in terms of financial conflicts of interest.
But there clearly have been a few examples uncovered in the last few years where investigators were involved in financial conflicts that could be at least perceived as coloring their judgment and perhaps affecting publications that they were involved in.
As the NIH Director I think I can say with great sincerity that the public trust in what we do is just essential, and we cannot afford to take any chances with the integrity of the research process. And therefore even though these proposed new rules may provide some burden to the investigator and to the institutions in terms of additional reporting requirements we believe that it is essential to tighten up this situation in order to be sure that we are obtaining and maintaining the public trust in the integrity of the scientific enterprise.
I think that’s about all that I would like to say by way of introduction. Sally Rockey who is on the telephone who is the Acting Deputy Director for Extramural Research has been deeply engaged in this process which began well before I arrived last August and can handle any of the detailed questions that you might have. But I would now like to see whether there are questions from people on the phone about today’s announcement.
Coordinator: Thank you. If you would like to ask a question please unmute your phone, press star 1 and record your name when prompted. To withdraw your question at any time you may press star 2. Once again if you would like to ask a question please press star 1 and record your name when prompted. One moment...
John Burklow: And also please identify yourself and your outlet as well. This is John, thanks.
Coordinator: One moment please for the first question. The first question comes from Meredith with Nature.
Meredith Wadman: Hi, this is Meredith Wadman with Nature. I see that the de minimis threshold is lowered to $5000. Do you include any requirements for increments in that reporting? In other words is it $5000-$20,000 and then $20,000-$50,000 and - because at some point if it’s like over $100,000 and someone’s collecting $2 million it just becomes very uninformative.
Does NIH stipulate the categories of increments that must be reported?
Sally Rockey: Meredith, hi, this is Sally. Yes, we - for the information that is being reported to NIH we have ranges as well as the information that’s going to be publicly posted. So the ranges for the information that is coming to NIH include the value of the financial interest and our ranges are $0-$4999, $5000-$9999, $10,000-$19,999 and then up to $100,000 by $20,000 increments and above $100,000 by $50,000 increments.
For the case of the public disclosure our increments are - hold on just one second I'm sorry, the public disclosure - oh it’s less than $20,000, less than $50,000, less than $100,000 and then up to $250,000 and then above $250,000.
Now remember that the public disclosure is - they will disclose those significant financial interests that the institution has deemed constitutes financial conflicts of interest. So they - in the proposal they’re not required to disclose all significant financial interests but only those that are deemed as a financial conflict - related to those that are deemed as a financial conflict of interest.
I will also point out that for the public disclosure this applies to PIs and key personnel.
Meredith Wadman: Thanks for that. And there’s - above $250k the public just takes a guess at how much that might be?
Sally Rockey: At above $250,000, yes.
Meredith Wadman: Right. Okay, thank you.
John Burklow: Thanks Meredith. Next question please .
Coordinator: Theresa Defino from Report on Research Compliance.
Theresa Defino: Hey, thank you. Two quick questions and without having the rule in front of us I think we’re all a little handicapped in being able to ask more detailed questions...
John Burklow: Yes. It went up - this is John Burklow. It’s up for public viewing as of 8:45 this morning...
Theresa Defino: Oh okay.
John Burklow: ...on the Federal Register Website and tomorrow it is published but they always put it up one day ahead.
Theresa Defino: Okay I guess I didn't check late enough in the morning. What are the penalties for noncompliance? And I'm guessing that institutions are going to object to a lot of the reporting requirements unless they can build compliance costs into their grants.
Sally Rockey: So again this is Sally. We have a variety of corrective enforcement actions in the cases where an awardee fails to comply with the terms and conditions which include how they manage their - the financial interest of their staff members including can be things such as an imposition of special award conditions. We can suspend funding until the matter is resolved.
We can withhold support. For example we could determine not to make any non-competing continuations until the problem is resolved. Or in fact we can terminate awards.
Theresa Defino: Thank you. And my other question was would you consider the compliance costs being built into any grant request?
Sally Rockey: Yeah, it’s in the indirect cost portion of the grant.
John Burklow: Okay thanks very much Theresa. Next question please.
Coordinator: Our next question comes from (Jenny Bowman). And please state your organization.
(Jeanie Bowman): Hi, yes, this is (Jeanie Bowman) from B&A. I know that there was some discussion about the - changing the de minimis from everything from eliminating it all together to making it as low as $100. I was wondering how you ended up with $5000?
Sally Rockey: I'll take that question. This is Sally again. Yes, you’re right, we considered many alternatives from keeping the de minimis where it was to lowing it to where we proposed at $5000. And we also considered alternatives to reducing it even further all the way down to zero.
So what we did was we analyzed whether or not this - a significantly lower threshold at like the zero, $100 range, would be appropriate but we were extraordinarily concerned about the administrative costs associated with disclosures and all the review that would have to go on with those disclosures of all but a negligible financial interest.
And we wanted to - we determined that that probably would outweigh the intended benefit of the regulations and promoting objectivity. Now we also heard quite a bit from the public when we did the ANPRM and many of the suggestions for lowering it ranged in the $5000 range.
Also if you - in the notice of proposed rulemaking there’s a preamble and that preamble sets up our rational very nicely. And you can see our discussion of our reasoning for the alternatives and why we either accepted or rejected some of these alternatives at this point.
(Jeanie Bowman): Great, thank you.
John Burklow: All right, thanks (Jeanie). Next question please.
Sally Rockey: And I would - I'd just like to say again remember we'd very much appreciate comments from whatever source. We really are looking towards these comments in the development of the final rule.
John Burklow: Okay. Next question.
Coordinator: Our next question comes from Paul Basken of Chronicle of Higher Education.
Paul Basken: Hi, thank you. On the exclusions it says exclusions and Dr. Collins mentioned exclusions from seminars, lectures or teaching. I'm not clear how it’s written; does that mean that it covers all seminars, you know, teaching and that kind of thing that money that comes from a private company or is it - what - can you explain what exactly that applies to?
And how do you know if for instance you have a case where you’re giving a lecture at a university and it’s funded, you know, that event is funded by a private company? I mean, how does the person know that I guess? Just gives us a little more detail here on what this does.
Sally Rockey: We had two areas we excluded from seminars, lectures and teaching and services on advisory review panels for government agencies or institutions of higher education. But we did not exclude when that happens with nonprofits or for-profits or other types of organizations.
Paul Basken: And how do you know, I mean, if you go - if you are a researcher and you go to another institution, give an address, and it turns out that that event was funded by, you know, name a drug company. How do you - are you responsible for knowing and how does that work?
Sally Rockey: Our assumption is that the investigator will know that.
Paul Basken: Okay.
John Burklow: All right thanks Paul.
Paul Basken: Thank you. Yeah, thanks.
John Burklow: Next question please.
Coordinator: Our next question comes from Jocelyn Kaiser of Science Magazine.
Jocelyn Kaiser: Hi it’s Jocelyn, yeah. So I have a couple questions. So one is just to clarify the definition of significant financial conflicts of interest particularly the $5000 threshold; that applies to both what’s reported to the institution and what’s reported to NIH? There’s not any difference there is that right?
Sally Rockey: Oh so remember the way that it works is that the significant financial interest is what is reported to the institution from the investigator. The institution then reports to us when that significant financial interest constitutes a financial conflict of interest and that’s reported to us.
That then will tell us - when they report to us they will tell us the value of that financial interest that created the financial conflict of interest.
Jocelyn Kaiser: Okay. And, Sally, you were saying that you decided that going down to $100 would be too much of a burden. But don't a lot of - or at least some institutions now ask for everything? I mean, it seems like if they can make it work then why can't - it must be doable?
Sally Rockey: Right. There are some institutions that have gone down to that level. In fact some of the - our - the - but again we’re looking for public comment on this particular area. And remember in our definition of a significant financial interest that also includes any equity interest in a non-publicly traded entity.
So that - and at least for that regard it’s any equity when it’s a non-publicly traded entity.
Jocelyn Kaiser: Okay.
Sally Rockey: So there is a zero de minimis for that particular category.
Jocelyn Kaiser: Right. Okay and just one more. So Meredith asked earlier about why - about the fact that the public disclosure is for greater than, you know, $250,000 there’s no increment. Why wouldn't you ask for increments above $250,000 on the public side? I mean, what difference does it really make?
Sally Rockey: Right. So we felt that it was a significant amount but again we are asking for public comments and particularly in this area.
Jocelyn Kaiser: But can you say why you’re not asking for, you know, specific increments above $250,000 on the public site but you are on the, you know, the institutional information?
Sally Rockey: Instead of going into all the detail I think it probably if you see our reasoning it’s all described in the preamble. You can read our reasoning behind that.
Jocelyn Kaiser: Okay.
John Burklow: Thanks Jocelyn. Next question please.
Coordinator: Doug Lederman of Inside Higher Ed.
Doug Lederman: Hi, thanks for taking my call. I just want to understand if I heard you right the institutions are only responsible - or the only thing that will be made public are the financial information related to things that the institutions have determined to be conflicts.
And is there - will there be some process by which NIH oversees these sort of institution’s judgments either - or will there be audits or how will the NIH reassure itself that the institutions are making appropriate judgments on that in determining what are conflicts?
Sally Rockey: Again, yes, that reasoning does reside with the institutions in the NPRM. We do have a system of compliance that we (unintelligible) to assure that the institutions are following their policies. '
In addition the additional information that we’re going to receive from the institutions will have more explanation so we - it will allow NIH to determine whether or not the institution has made the proper decisions and has met the letter of our policies.
Doug Lederman: So in other words the information that you'll be getting directly from the institutions will give you more context with which to...
Sally Rockey: Right.
Doug Lederman: ...sort of either spot check or...
Sally Rockey: Exactly.
Doug Lederman: For whatever whether they’re - whether they’re making the right - the appropriate judgments in terms of what they make public.
Sally Rockey: Right. It will give us a much more broad look at the particular nature of that decision that they made.
Doug Lederman: And just the last thing, I'm sorry, so will there be - will that just be sort of a - through the sort of normal compliance process? You won't be sort of looking at every decision but you will be spot checking an appropriate way to think about it?
Sally Rockey: Through our normal process.
Doug Lederman: Yeah, okay. Thank you very much.
Coordinator: Our next question comes from Dr. Gregory Jay of Rhode Island Hospital.
Gregory Jay: Hello. I haven't had the benefit of reading the NPRM. But would patents pending or issues but not licensed yet be considered a conflict that’s manageable or not?
Sally Rockey: Institutions would determine what that conflict is if there is one.
Gregory Jay: Thank you.
John Burklow: Okay and just remind everyone that this is a press briefing. So we want to make sure the reporters get a chance to ask their questions. Thanks. Next call please.
Coordinator: Miss Marshall of ASBMR.
Earline Marshall: Yes, hello. My name is Earline Marshall; I'm with the American Society for Bone and Mineral Research. And a few callers ago the response was that nonprofits were I believe not in the exception. And I just to get - I just wanted to get that clarified as to what you were talking about.
Sally Rockey: That’s correct.
Earline Marshall: Can you explain a little bit more about that?
Sally Rockey: So they’re subject to - they could become a significant financial interest. So income from nonprofit organizations could be considered as a significant financial interest depending on the situation.
Earline Marshall: So just to follow up, you’re talking about stipends or any type money received from nonprofits?
Sally Rockey: So the categories that we have described under significant financial interests would also apply to nonprofits.
Earline Marshall: Okay, thank you.
John Burklow: All right thank you very much. Next call please and we hit the - next one or two questions.
Coordinator: We do have a participant that did not record their name. If you pressed star 1 your line is open.
John Burklow: Okay so it sounds like we’re wrapping it up. So this is John Burklow again, Communications Director at NIH. Thank you very much for calling in today. And again remember there’s the comment period and if you have any questions - press questions our phone number is 301-496-5787. Again thank you very much.
Francis Collins: Thanks everybody.
Sally Rockey: Thank you.
John Burklow: Bye-bye.
Francis Collins: Bye.
Sally Rockey: Bye.
Coordinator: Thank you for joining today’s conference call. You may disconnect at this time.