[Code of Federal Regulations]
[Title 42, Volume 1, Parts 1 to 399]
[Revised as of October 1, 2000]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR50]

[Page 180-183]
                         TITLE 42--PUBLIC HEALTH
                        DEPARTMENT OF HEALTH AND
                             HUMAN SERVICES
Subpart F--Responsibility of Applicants for Promoting Objectivity in Research for Which PHS Funding Is Sought

    Authority: 42 U.S.C. 216, 289b-1, 299c-3.

    Source: 60 FR 35815, July 11, 1995; 60 FR 39076, July 31, 1995, 
unless otherwise noted.

Sec. 50.601  Purpose.

    This subpart promotes objectivity in research by establishing 
standards to ensure there is no reasonable expectation that the design, 
conduct, or reporting of research funded under PHS grants or cooperative 
agreements will be biased by any conflicting financial interest of an 

Sec. 50.602  Applicability.

    This subpart is applicable to each Institution that applies for PHS 
grants or cooperative agreements for research and, through the 
implementation of

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this subpart by each Institution, to each Investigator participating in 
such research (see Sec. 50.604(a)); provided, that this subpart does not 
apply to SBIR Program Phase I applications. In those few cases where an 
individual, rather than an institution, is an applicant for PHS grants 
or cooperative agreements for research, PHS Awarding Components will 
make case-by-case determinations on the steps to be taken to ensure that 
the design, conduct, and reporting of the research will not be biased by 
any conflicting financial interest of the individual.

Sec. 50.603  Definitions.

    As used in this subpart:
    HHS means the United States Department of Health and Human Services, 
and any components of the Department to which the authority involved may 
be delegated.
    Institution means any domestic or foreign, public or private, entity 
or organization (excluding a Federal agency).
    Investigator means the principal investigator and any other person 
who is responsible for the design, conduct, or reporting of research 
funded by PHS, or proposed for such funding. For purposes of the 
requirements of this subpart relating to financial interests, 
``Investigator'' includes the Investigator's spouse and dependent 
    PHS means the Public Health Service, an operating division of the 
U.S. Department of Health and Human Services, and any components of the 
PHS to which the authority involved may be delegated.
    PHS Awarding Component means the organizational unit of the PHS that 
funds the research that is subject to this subpart.
    Public Health Service Act or PHS Act means the statute codified at 
42 U.S.C. 201 et seq.
    Research means a systematic investigation designed to develop or 
contribute to generalizable knowledge relating broadly to public health, 
including behavioral and social-sciences research. The term encompasses 
basic and applied research and product development. As used in this 
subpart, the term includes any such activity for which research funding 
is available from a PHS Awarding Component through a grant or 
cooperative agreement, whether authorized under the PHS Act or other 
statutory authority.
    Significant Financial Interest means anything of monetary value, 
including but not limited to, salary or other payments for services 
(e.g., consulting fees or honoraria); equity interests (e.g., stocks, 
stock options or other ownership interests); and intellectual property 
rights (e.g., patents, copyrights and royalties from such rights). The 
term does not include:
    (1) Salary, royalties, or other remuneration from the applicant 
    (2) Any ownership interests in the institution, if the institution 
is an applicant under the SBIR Program;
    (3) Income from seminars, lectures, or teaching engagements 
sponsored by public or nonprofit entities;
    (4) Income from service on advisory committees or review panels for 
public or nonprofit entities;
    (5) An equity interest that when aggregated for the Investigator and 
the Investigator's spouse and dependent children, meets both of the 
following tests: Does not exceed $10,000 in value as determined through 
reference to public prices or other reasonable measures of fair market 
value, and does not represent more than a five percent ownership 
interest in any single entity; or
    (6) Salary, royalties or other payments that when aggregated for the 
Investigator and the Investigator's spouse and dependent children over 
the next twelve months, are not expected to exceed $10,000.
    Small Business Innovation Research (SBIR) Program means the 
extramural research program for small business that is established by 
the Awarding Components of the Public Health Service and certain other 
Federal agencies under Pub. L. 97-219, the Small Business Innovation 
Development Act, as amended. For purposes of this subpart, the term SBIR 
Program includes the Small Business Technology Transfer (STTR) Program, 
which was established by Pub. L. 102-564.

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Sec. 50.604  Institutional responsibility regarding conflicting 
          interests of investigators.

    Each Institution must:
    (a) Maintain an appropriate written, enforced policy on conflict of 
interest that complies with this subpart and inform each Investigator of 
that policy, the Investigator's reporting responsibilities, and of these 
regulations. If the Institution carries out the PHS-funded research 
through subgrantees, contractors, or collaborators, the Institution must 
take reasonable steps to ensure that Investigators working for such 
entities comply with this subpart, either by requiring those 
Investigators to comply with the Institution's policy or by requiring 
the entities to provide assurances to the Institution that will enable 
the Institution to comply with this subpart.
    (b) Designate an institutional official(s) to solicit and review 
financial disclosure statements from each Investigator who is planning 
to participate in PHS-funded research.
    (c)(1) Require that by the time an application is submitted to PHS 
each Investigator who is planning to participate in the PHS-funded 
research has submitted to the designated official(s) a listing of his/
her known Significant Financial Interests (and those of his/her spouse 
and dependent children):
    (i) That would reasonably appear to be affected by the research for 
which PHS funding is sought; and
    (ii) In entities whose financial interests would reasonably appear 
to be affected by the research.
    (2) All financial disclosures must be updated during the period of 
the award, either on an annual basis or as new reportable Significant 
Financial Interests are obtained.
    (d) Provide guidelines consistent with this subpart for the 
designated official(s) to identify conflicting interests and take such 
actions as necessary to ensure that such conflicting interests will be 
managed, reduced, or eliminated.
    (e) Maintain records of all financial disclosures and all actions 
taken by the Institution with respect to each conflicting interest for 
at least three years from the date of submission of the final 
expenditures report or, where applicable, from other dates specified in 
45 CFR 74.53(b) for different situations.
    (f) Establish adequate enforcement mechanisms and provide for 
sanctions where appropriate.
    (g) Certify, in each application for the funding to which this 
subpart applies, that:
    (1) There is an effect at that Institution a written and enforced 
administrative process to identify and manage, reduce or eliminate 
conflicting interests with respect to all research projects for which 
funding is sought from the PHS,
    (2) Prior to the Institution's expenditure of any funds under the 
award, the Institution will report to the PHS Awarding Component the 
existence of a conflicting interest (but not the nature of the interest 
or other details) found by the institution and assure that the interest 
has been managed, reduced or eliminated in accordance with this subpart; 
and, for any interest that the Institution identifies as conflicting 
subsequent to the Institution's initial report under the award, the 
report will be made and the conflicting interest managed, reduced, or 
eliminated, at least on an interim basis, within sixty days of that 
    (3) The Institution agrees to make information available, upon 
request, to the HHS regarding all conflicting interests identified by 
the Institution and how those interests have been managed, reduced, or 
eliminated to protect the research from bias; and
    (4) The Institution will otherwise comply with this subpart.

Sec. 50.605  Management of conflicting interests.

    (a) The designated official(s) must: Review all financial 
disclosures; and determine whether a conflict of interest exists and, if 
so, determine what actions should be taken by the institution to manage, 
reduce or eliminate such conflict of interest. A conflict of interest 
exists when the designated official(s) reasonably determines that a 
Significant Financial Interest could directly and significantly affect 
the design, conduct, or reporting of the PHS-

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funded research. Examples of conditions or restrictions that might be 
imposed to manage conflicts of interest include, but are not limited to:
    (1) Public disclosure of significant financial interests;
    (2) Monitoring of research by independent reviewers;
    (3) Modification of the research plan;
    (4) Disqualification from participation in all or a portion of the 
research funded by the PHS;
    (5) Divestiture of significant financial interests; or
    (6) Severance of relationships that create actual or potential 
    (b) In addition to the types of conflicting financial interests 
described in this paragraph that must be managed, reduced, or 
eliminated, an Institution may require the management of other 
conflicting financial interests, as the Institution deems appropriate.

Sec. 50.606  Remedies.

    (a) If the failure of an Investigator to comply with the conflict of 
interest policy of the Institution has biased the design, conduct, or 
reporting of the PHS-funded research, the Institution must promptly 
notify the PHS Awarding Component of the corrective action taken or to 
be taken. The PHS Awarding Component will consider the situation and, as 
necessary, take appropriate action, or refer the matter to the 
Institution for further action, which may include directions to the 
Institution on how to maintain appropriate objectivity in the funded 
    (b) The HHS may at any time inquire into the Institutional 
procedures and actions regarding conflicting financial interests in PHS-
funded research, including a requirement for submission of, or review on 
site, all records pertinent to compliance with this subpart. To the 
extent permitted by law, HHS will maintain the confidentiality of all 
records of financial interests. On the basis of its review of records 
and/or other information that may be available, the PHS Awarding 
Component may decide that a particular conflict of interest will bias 
the objectivity of the PHS-funded research to such an extent that 
further corrective action is needed or that the Institution has not 
managed, reduced, or eliminated the conflict of interest in accordance 
with this subpart. The PHS Awarding Component may determine that 
suspension of funding under 45 CFR 74.62 is necessary until the matter 
is resolved.
    (c) In any case in which the HHS determines that a PHS-funded 
project of clinical research whose purpose is to evaluate the safety or 
effectiveness of a drug, medical device, or treatment has been designed, 
conducted, or reported by an Investigator with a conflicting interest 
that was not disclosed or managed as required by this subpart, the 
Institution must require the Investigator(s) involved to disclose the 
conflicting interest in each public presentation of the results of the 

Sec. 50.607  Other HHS regulations that apply.

    Several other regulations and policies apply to this subpart.
    They include, but are not necessarily limited to:

42 CFR part 50, subpart D--Public Health Service grant appeals procedure
45 CFR part 16--Procedures of the Departmental Grant Appeals Board
45 CFR part 74--Uniform Administrative Requirements for Awards and 
Subawards to Institutions of Higher Education, Hospitals, Other Non-
Profit Organizations, and Commercial Organizations; and Certain Grants 
and Agreements with States, Local Governments and Indian Tribal 
45 CFR part 76--Government-wide debarment and suspension (non-
45 CFR part 79--Program Fraud Civil Remedies
45 CFR part 92--Uniform Administrative Requirements for Grants and 
Cooperative Agreements to State and Local Governments