Research (OER)
9000 Rockville Pike
Bethesda, Maryland 20892
and Human Services (HHS)
OBJECTIVITY IN RESEARCH
NIH GUIDE, Volume 24, Number 25, July 14, 1995
P.T. 34
Keywords:
Grants Administration/Policy+
Public Health Service
The following is a reprint of the final rule on "Objectivity in
Research," which was published in the Federal Register of July 11,
1995 with an effective date of October 1, 1995. The National Science
Foundation has published a similar policy in the same issue of the
Federal Register. The requirements are almost identical.
ACTION: Final rule.
SUMMARY: The Public Health Service (PHS) and the Office of the
Secretary, HHS, are promulgating regulations establishing standards
and procedures to be followed by institutions that apply for research
funding from the PHS to ensure that the design, conduct, or reporting
of research funded under PHS grants, cooperative agreements or
contracts will not be biased by any conflicting financial interest of
those investigators responsible for the research.
Under the rules, investigators are required to disclose to an
official(s) designated by the institution a listing of Significant
Financial Interests (and those of his/her spouse and dependent
children) that would reasonably appear to be affected by the research
proposed for funding by the PHS. The institutional official(s) will
review those disclosures and determine whether any of the reported
financial interests could directly and significantly affect the
design, conduct, or reporting of the research and, if so, the
institution must, prior to any expenditure of awarded funds, report
the existence of such conflicting interests to the PHS Awarding
Component and act to
protect PHS-funded research from bias due to the conflict of
interest.
EFFECTIVE DATE: October 1, 1995.
FOR FURTHER INFORMATION CONTACT: Dr. George J. Galasso, Associate
Director for Extramural Affairs, National Institutes of Health,
Building 1, Room 152, 9000 Rockville Pike, MSC 0154, BETHESDA, MD
20892-0154. The telephone number is (301) 496-5356 (this is not a
toll-free number).
SUPPLEMENTARY INFORMATION:
On June 28, 1994 the Department of Health and Human Services (HHS)
published proposed regulations (59 FR 33242) to ensure that PHS-
funded research would not be compromised by financial interests of
investigators that could be reasonably expected to bias the design,
conduct or reporting of the research. In addition to setting forth
proposed rules requiring institutional procedures for the disclosure
and management, reduction or elimination of Significant Financial
Interests that would reasonably appear to be directly and
significantly affected by the research funded by PHS, or proposed for
funding, the Notice of Proposed Rulemaking (NPRM) raised several
specific questions about alternatives for implementing the pertinent
statutes and for ensuring that PHS-funded research is not compromised
by any financial conflicts of interest.
The NPRM was published in the Federal Register at the same time the
National Science Foundation (NSF) published its Investigator
Financial Disclosure Policy and reflected coordination between the
two agencies. Since that time, we have continued to work closely
with the NSF to ensure that the NSF policy and our regulations do not
impose disparate requirements upon the many institutions that receive
funding from both agencies. Elsewhere in this Federal Register, the
NSF is issuing changes in its policy necessary to maintain
consistency with this final rule, and the changes we have made to
conform to the NSF policy are referenced in the discussion that
follows. The agencies intend to continue their cooperation by
working together to develop common guidance, including a set of
questions and answers, to help institutions implement conflict of
interest policies that comply with both HHS and NSF requirements.
During the 60 day comment period that ended on August 28, 1994, the
PHS received 102 comments on the NPRM. Most of the comments were
generally supportive of giving the applicant institutions primary
responsibility for identifying and resolving financial conflicts of
interest that could directly and significantly affect the PHS-funded
research. The comments are summarized below under the headings:
Changes in the NPRM; Comments Not Resulting in Any Changes; and
Responses to Questions on Alternatives.
Changes in the NPRM
A summary of the changes made in the regulations as proposed on June
28, 1994, follows. Only the sections in 42 CFR Part 50 are
referenced. Similar changes have been made in the regulations at 45
CFR 94 which apply to contracts.
1. In the section titles, 50.601, 50.602, 50.605 and several
other sections, references to "Significant Financial Interests" or
"Significant Financial Interests of the type described in 50.605,"
have been changed to refer to a conflict of interest or conflicting
financial interests. This change has been made in response to many
of the comments. It was pointed out that this change will make the
HHS regulations consistent with the NSF regulations and that the
institutions can only manage the conflict, not the financial
interests.
2. In response to several comments, the "Purpose" sections in the
grants and the contracts regulations have been rewritten to make them
more concise and parallel.
3. A reference to 50.604(a) has been added to the "Applicability"
section. As explained more fully in paragraph 6 below, this change
and the change in 50.604(a) clarify that the regulations apply to
Investigators carrying out the PHS-funded research for subgrantees or
contractors of the awardee institution.
4. In response to several comments, the definition of
"Investigator," has been amended to delete the phrase "at the
Institution."
5. The definition of "Significant Financial Interest" in 50.603
has been changed in several respects. Clause (i) has been split so
that ownership interests are now referenced in a new clause (ii).
Some commentors felt that it was not clear whether the requirement
that an institution be an applicant under the SBIR program modified
both ownership interest and salary, royalties or other remuneration.
The exception for financial interests in business enterprises has
been split to clarify that the per annum measurement applies only to
salary, royalties or other payments not reasonably expected to exceed
$10,000 per annum. In addition, the dollar limits have been changed
from $5,000 to $10,000 and the applicability of the alternative
measures of $10,000 in value or five percent ownership interest, has
been clarified. These changes have been made in response to a large
number of comments stating that the $5,000 limit was too low. A
majority of those comments indicated that $10,000 would be an
appropriate figure, particularly since the experience of state
universities in California, and some other universities, is that
interests up to this amount do not raise conflict of interest
concerns.
The reference to determining the value of equity interests on the
basis of public prices or other reasonable measures of fair market
value was adapted from a similar provision in the proposed FDA rule
on conflict of interest (59 FR 48708 et seq., September 22, 1994).
6. Section 50.604(a) has been revised to clarify that the
Institution must maintain an appropriate written, enforced conflict
of interest policy (this parallels NSF language) and that the
Institution must make reasonable efforts to ensure compliance with
the regulations by Investigators working for subgrantees and
contractors, either by including those Investigators in the
Institution's policy or by receiving appropriate assurances from
their employers. This latter change was recommended in several
comments and is consistent with current regulations and policies on
the applicability of grant terms and conditions to subgrantees and
contractors.
7. In response to many comments, paragraph (a)(3) (redesignated as
paragraph (c)) of 50.604 has been changed from requiring the
institution to "ensure" that investigators have disclosed all
Significant Financial Interest to simply "require" disclosures by
each investigator. In addition, in response to several comments and
for uniformity with the NSF guidelines, this paragraph has been
revised to require disclosure, by the time an application is
submitted to PHS, of those Significant Financial Interests
attributable to the Investigator that would reasonably appear to be
affected by the research, including interests in entities whose
financial interests would reasonably appear to be affected by the
research. This change eliminates the need to cross-reference the
description of a conflict interest in 50.605(a). Also, the changes
in this section and in 50.604(c) and 50.605(a) will result in a
slightly broader disclosure by the Investigator than under the NPRM.
The institutional official(s) will review the disclosures and
determine which disclosed interests could directly and significantly
affect the design, conduct or reporting of the research,
necessitating the management, reduction or elimination of the
conflict of interest. In addition, in response to a significant
number of comments, the reference to "pendency" of the award has been
changed to "period" of the award. Paragraph (a)(5) of 50.604
(redesignated as paragraph (e)) has been changed to delete the
requirement that records be identifiable to each award, and to refer
to the applicable retention requirements in the HHS grants
administration regulations. The former change has been made for
conformity with the NSF policy, and the latter change clarifies that
the recordkeeping requirements of these regulations are intended to
be consistent with the HHS grants administration regulations. The
change in paragraph (f) of 50.604 (formerly paragraph (a)(6)) has
also been made for conformity with the NSF policy.
8. In response to many comments, 50.604(a)(7)(ii), now
redesignated as (g)(2), has been revised to reduce the burden on
institutions and ensure that the application does not have to state
whether a conflict of interest has been found. Rather, the provision
now requires the applicant to certify that action will be taken,
prior to the institution's expenditure of any funds under the award,
to report to the PHS awarding component the existence of a
conflicting interest and assure that the interest has been managed,
reduced or eliminated in accordance with the regulations. The
commentors felt that review of an application would be biased if the
application indicated there was a conflict of interest and that, in
any case, it would not be feasible for an institution to review the
disclosed financial interests and determine whether a conflict of
interest was present in the limited time available prior to
submission of the application.
In addition, the previous 50.604(a)(8)(i) has been incorporated
into 50.604(g)(2) with minor changes. Many commentors felt that
the 60 day period for management of a conflict of interest found
after the award should be doubled. However, the 60 day period does
not seem unreasonable, since we have clarified that it is measured
from the time the institution identifies the conflict of interest and
that only interim action is required by the end of the 60 day period.
As stated in the NPRM, section 493A of the PHS Act imposes a
continuing obligation on awardees to identify conflicts of interest
in clinical research projects and report their management, reduction
or elimination. This and other statutory requirements for clinical
research have been applied to all PHS-funded research in order to
avoid confusion and provide for uniform PHS reporting requirements.
We would not expect this reporting requirement to be burdensome, as
only a few conflicts of interest are likely to be identified after
the award.
Section 50.604(a)(8)(ii) has been incorporated into 50.606(b),
because the review of records referenced in the former section is
directly related to the inquiry into actions regarding conflicts of
interest addressed in the latter section. Section 50.604(a)(8)(iii)
has been deleted as duplicative of the statement in the definition of
"Significant Financial Interest" ( 50.603), that salary, royalties
or other remuneration from the institution is not considered a
Significant Financial Interest. Under current regulations and
policies governing applications for PHS research grants, if the
applicant receives non-PHS grant support for the same project to be
supported by the PHS award, the grant must be listed in the "Other
Support" section of the application for PHS support.
9. Section 50.605(a) has been revised to clarify that the
institutional official(s) must identify and manage, reduce or
eliminate any conflicts of interest. Consistent with the language in
the NSF guidelines, this provision states that 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-funded research.
As noted above in the discussion of the changes to 50.604(c),
Investigators must disclose those Significant Financial Interests
that would reasonably appear to be affected by the research and the
institutional official must decide which of those interests are
conflicting under the standard prescribed in 50.605(a). This
change is intended to more clearly define and limit the types of
financial interests that must be managed, reduced or eliminated
because they are considered to be conflicting interests.
In response to a few comments, the clause introducing the examples of
methods for managing, reducing or eliminating conflicts has been
clarified by adding after "include," the phrase "but are not limited
to."
10. In 50.606, the first sentence has been deleted because it
essentially duplicated the provision in proposed 50.604(a)(6). In
the next sentence, the term "employee" has been changed to the
defined term "Investigator" and, in response to a comment, the phrase
"or to be taken" has been added at the end of the sentence. In
addition, paragraph (b) has been rewritten to incorporate
50.604(b), because the two provisions were somewhat duplicative.
11. Many commentors were concerned about what they considered to be
a significant underestimation of the annual reporting and
recordkeeping burden. In response, burdens have been further reduced
by raising the dollar threshold for financial interests that are
considered Significant Financial Interests subject to the
regulations, and by amending 50.604(g)(2) to require the reporting
of a conflict of interest and its management, reduction or
elimination only after an award has been made (but before any
expenditure of funds). In addition, the estimated annual reporting
and record keeping burden has been recalculated in light of these
changes and the public comments.
12. Many commentors urged uniformity with the NSF guidelines, but
indicated the pursuit of that end should not interfere with necessary
changes to the NPRM. As noted above, many of the changes result in
greater uniformity between these regulations and the NSF guidelines.
The few remaining differences between these regulations and the NSF
guidelines are based upon requirements in section 493A of the PHS
Act, 42 U.S.C. 289b-1, and differences between the grant programs
and experiences under those programs.
The effective date for these regulations, October 1, 1995, is the
same as the effective date for the NSF guidelines. Although some
commentors felt that a longer lead time would be necessary to enable
institutions to prepare for implementation of the regulations, we
believe the time period provided is ample, particularly because
institutions have had since June 28, 1994, to prepare for
implementation of the similar provisions of the NSF guidelines and
because many institutions already have conflict of interest
procedures.
Comments Not Resulting in Any Changes
1. Title.
Two commentors felt that the title of the regulations should be
changed to focus upon investigator financial disclosure or conflict
of interest. These are not inappropriate titles, but we have chosen
to focus the title upon the desired outcome of the review of
investigator financial disclosures, that is, objectivity in the
design, conduct and reporting of the research.
2. 50.602 Applicability.
Several commentors recommended that the regulations be limited to
clinical research. As explained in the preamble to the NPRM,
experience indicates that financial conflicts of interest can arise
in all types of research. It is expected that the risk of a conflict
of interest will be higher in clinical research than in other types
of research, but we have concluded that the latter risk is
sufficiently likely that pertinent financial interests should be
disclosed and reviewed.
In response to a specific request for comments on the NSF exemption
from its conflict of interest policy for grantees employing fifty
persons or less, it was generally agreed by those responding that
PHS-funded investigators working for small entities may be just as
subject to conflicts of interest as investigators working at large
institutions. This view is consistent with the PHS experience
referred to in the preamble of the NPRM. The NSF experience has
differed, apparently because of the differences between the research
funding that is provided to small entities by HHS and NSF.
3. 50.603 Definitions.
Investigator. There were diverse comments on the definition of the
term, "Investigator." Although one commentor supported the approach
of the NPRM of leaving it to the institutions to determine who are
persons "responsible for the design, conduct, or reporting" of the
PHS funded research, others felt that the definition should offer
more guidance on who would fall within that category. It was
recommended that the term be limited to Principal Investigators, Co-
Principal Investigators, and faculty collaborators and that students
and technical staff be excluded. It was also recommended that
administrators be excluded by limiting the definition to the
"scientific design" of the research. The definition of Investigator
has not been changed, except for deleting the phrase "at the
institution," as explained above. The degree to which individuals
are responsible for the design, conduct, or reporting of the PHS-
funded research will vary. In some circumstances students, technical
personnel and administrators may not be "responsible," but in other
circumstances, they may be, in that they are given responsibility for
a task that could have a significant effect on the design, conduct or
reporting of the research. Based on their knowledge of the specific
circumstances, we believe the institutions are in the best position
to determine who is responsible for the design, conduct or reporting
of the research to such a degree that his/her financial interests
should be reviewed.
Significant Financial Interest. As noted above, the public comments
led to several changes in this definition. There were a number of
other detailed comments that were not adopted, primarily because they
would have: complicated the definition and its application (e.g.,
have different threshold levels for publicly traded equity interests
and those not so traded, differentiate between large and small
companies, and adopt criteria for determining reasonably anticipated
future value); led to a long, cumbersome list of additional
exclusions (e.g., exclude copyright that is not licensable, mutual
funds, pensions, and reimbursement for expenses); or were based upon
a misunderstanding of the definition and its effect (some apparently
did not understand that any remuneration an investigator receives
from the applicant institution was excluded). Some commentors
questioned the exclusion of ownership interests in SBIR applicants.
No change has been made in response to that comment because we
believe such ownership interests are apparent to PHS funding agencies
based on the application. Furthermore, the exclusion does not
prohibit institutions from adopting more rigorous standards, if they
wish to do so.
The definition of Significant Financial Interest alone does not
delineate what the investigator must disclose or what the institution
must manage, reduce or eliminate. The Investigator must consider all
Significant Financial Interests, but need disclose only those that
would reasonably appear to be affected by the research proposed for
funding by the PHS, including the Investigator's financial interest
in entities whose interests would be affected. Following this
disclosure, the institutional official must determine, on the basis
of the regulatory standard, whether there are conflicting interests
that need to be managed, reduced, or eliminated. We think it is
appropriate to have a relatively broad range of financial interests
considered by the Investigator in making his/her determination of
those that must be disclosed. In this manner, broad consideration of
possibly conflicting interests is assured with minimal burdens, since
only a limited number of interests need to be disclosed and an even
smaller number will need to be managed, reduced or eliminated.
There were a number of comments recommending different thresholds
than those that were adopted, including a threshold adjusted for
inflation. The threshold amounts adopted were recommended in many
comments and seem to represent a reasonable balance between the need
to consider a broad range of financial interests and the burdens
imposed upon the investigators and the institutions.
4. 50.604.
Many commented that the requirement for updating financial
disclosures (in 50.604(c) of these regulations) needed to be
clarified. The provision, which has not been changed, except for a
minor word change, states that 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. We believe
this language is reasonably clear in conveying that the institutions
have the option of adopting either of two methods for investigators
to report changes in financial interests during the period of the PHS
award: reporting on an annual basis any changes in the previously
reported financial interests; or requiring investigators to update
disclosures as new reportable Significant Financial Interests are
obtained. An annual reporting requirement would serve as a reminder
for investigators to review their prior disclosures, but it might be
burdensome if in fact there are no changes and it could result in
delayed reporting as compared to the alternative. This burden would
be eliminated by the other reporting alternative, but there would be
no annual reminder to investigators to review and update their
disclosures. The weighing of these factors and the decision are left
to the institutions. The reference to "new reportable Significant
Financial Interests" is intended to include financial interests that
become reportable due to an increase in value that meets the
reporting threshold, as well as the acquisition of new interests
that are reportable. Of course, both types of interests are subject
to disclosure by the investigator only if they meet the criteria in
50.604(c).
It was recommended that the requirement in 50.604(g)(2) for the
reporting to the PHS Awarding Component of the existence of a
conflicting interest be changed to conform with the NSF approach that
requires such reporting only "if the institution finds that it is
unable to satisfactorily manage an actual or potential conflict of
interest." As stated in the NPRM, section 493A of the Public Health
Service Act requires that institutions report conflicting interests
for clinical research projects. To avoid disparate requirements for
clinical and nonclinical research, the regulations apply this
reporting requirement to all PHS-funded research.
5. 50.606.
One commentor felt that the notification required in paragraph (a)
should go to HHS, rather than to the PHS Awarding Component. Because
PHS Awarding Components are responsible for the award and have
delegated authority, it is appropriate for those components to
receive notifications and to act on them. On the other hand,
paragraph (b) refers to HHS inquiries into institutional procedures
and actions because such audit type activities may be conducted by
HHS components other than the awarding agencies. As is made clear in
the definitions, the term HHS encompasses all components of the
Department, including the PHS Awarding Components.
A number of commentors objected to the requirement for submission of
records to the HHS, fearing that the confidentiality of such records
could not be assured. 45 CFR 74.53 already gives the HHS a right
of access to all records pertinent to grants, which would include the
records relating to financial conflicts of interest of investigators
carrying out the PHS-funded research. It is expected that the PHS
funding agencies will not often require the submission of records or
retain copies from audits at the institution, but when that occurs
the records will be maintained confidentially. In addition, although
a few commentors objected to the reference to suspension of funding
pending the resolution of a conflicting interest determined by the
PHS awarding agency as biasing the objectivity of the research, that
provision has been retained and a reference to the regulatory
authority for the suspension has been added. Such suspension action
would be necessary to protect Federal funds only in unusual
situations, but we believe awardees subject to the regulations should
be notified of the potential for such action.
Responses to Questions on Alternatives.
The NPRM requested specific comments on the following issues: (1)
whether the regulations should address institutional conflicts of
interest, as well as individual conflicting interests and, if so,
how; (2) what types of financial interests should be disclosed; (3)
whether the disclosed financial interests should include financial
interests in products that would compete with the product or
potential product of the PHS-funded research; (4) whether an
employee's equity or other nonsalary financial interests in an
applicant institution should be excluded from the definition of
Significant Financial Interest; and (5) whether there should be an
exemption for all compensation other than that tied to the outcome of
the research. Most of the commentors addressed at least some of
these issues. Those comments are summarized below.
Institutional Conflicts
Those addressing this issue were nearly unanimous in concluding that
the regulations should not address the institutional conflict of
interest issue because of the need to carefully consider that issue
through a separate process. We agree with that conclusion. The
comments on the alternatives for addressing institutional conflicts
of interest will be considered separately from this rulemaking.
Competing Products
Over 30 commentors opposed any requirement for disclosing financial
interests in entities or products that would compete with the PHS-
funded research. Twelve commentors supported investigator disclosure
of such competing entities or products, but some felt that the
disclosure should be limited to those financial interests in
competitors or competing products known to the investigator. As
revised, the regulation would not specifically require the disclosure
of such interests, but, depending upon the circumstances, those
interests might come within the definition of the financial interests
that must be disclosed. In clinical research, it is probable that a
financial interest in a product that competes with the product being
evaluated could reasonably appear to be affected by the PHS-funded
research. Such a relationship is much less probable where the PHS
funding is for basic research.
Types of Financial Interests Disclosed
Most of the comments on this issue are summarized above in the
discussion of comments on the definition of Significant Financial
Interests and on the financial interests that must be disclosed. The
financial interests to be disclosed must be known to the investigator
and determined by him/her to be a financial interest that would
reasonably appear to be affected by the PHS-funded research or to be
a financial interest in an entity whose financial interest would
reasonably appear to be affected by the research. This criterion
would, in most cases, require that the financial disclosure be
relevant to biomedical research or health care, as was recommended by
one commentor, but the disclosure would not necessarily be limited to
those fields, because other types of financial interests could
reasonably appear to be affected by the PHS-funded research.
Exclusion of Financial Interests
There were few specific comments on the questions relating to the
exclusion from the definition of Significant Financial Interest of
equity interests in, or compensation from, the applicant institution.
The general comments on the definition emphasized the need for
limiting disclosures to financial interests related to the research
proposed for PHS funding. We are retaining the exclusion for all
remuneration paid to an investigator by an applicant institution and
the exclusion of any ownership interest in the applicant institution
if it is an applicant under the SBIR or STTR program. We have not
expanded the exclusion for ownership interests to encompass all
institutions, because we believe there may be situations in which an
ownership interest in a for-profit applicant could be in conflict
with the investigator's responsibility for the conduct of the PHS-
funded research and that ownership interest should be subject to
appropriate institutional review. Experience under the regulations
may prove this reasoning to be incorrect. If so, we will consider
appropriate amendments to the regulations.
Regulatory Impact
The Department has concluded that this rule is not economically
significant under Executive Order 12866 and that it thus does not
require the development of a comprehensive benefit-cost analysis.
While we agree with comments received that the initial estimate of
implementation costs was low, none of these comments indicated that
the costs would exceed $100 million annually; in addition, changes
made in the final regulations will reduce implementation costs.
Commentors did not provide any evidence that the rule will hamper
desirable research or otherwise have an adverse effect on the conduct
of research under PHS-funded grants or on the consequent
technological progress that is so important to the Nation's economy.
Executive Order 12866 requires that the Office of Management and
Budget (OMB) review all regulations that may create a serious
inconsistency with or otherwise interfere with an action taken or
planned by another Federal agency. This rule was thus reviewed by
OMB and coordinated with the policy of the NSF on this subject (see
the notice of technical changes in NSF policy published elsewhere in
this issue of the Federal Register).
The Department prepares a regulatory flexibility analysis, in
accordance with the Regulatory Flexibility Act of 1980 (5 U.S.C.
chapter 6), if a rule is expected to have a significant impact on a
substantial number of small entities. Although we have not followed
the NSF approach of exempting entities with 50 or fewer employees, we
have concluded that the regulation will not have a significant impact
on small entities. Any such effect is mitigated by the provisions of
the regulations and the fact that the regulations impose obligations
primarily on those receiving grants that can be used, in part
(amounts for indirect costs), to offset the costs of compliance with
the regulatory requirements. The regulations do not apply to SBIR
and STTR Phase I applications. These programs are for small
businesses and the Phase I grants are for limited amounts. Phase II
grants are for larger amounts and thus more funds would be available
for meeting the costs of compliance. Furthermore, we have changed
the regulations to reduce burdens and costs of compliance for all
entities subject to the regulations by eliminating more financial
interests from consideration and by reducing burdens upon
institutions through changes in the certification requirements.
Institutions do not have to take action to identify, report and
manage conflicting interests until after being notified by the PHS
Awarding Agency of its decision to award funds.
For the same reasons, this rule will not create an unfunded mandate
on State-owned institutions and thus would not trigger the
requirements of Executive Order 12875 on "Enhancing the
Intergovernmental Partnership." The proposed rule has been changed
to significantly reduce burdens on institutions and, as noted above,
institutions will be able to use amounts awarded for indirect costs
to meet the costs of implementing the regulations.
Paperwork Reduction Act
The final rules contain information collection requirements that are
subject to review by the Office of Management and Budget (OMB) under
the Paperwork Reduction Act of 1980. The title, description, and
respondent description applicable to the information collection are
shown below with an estimate of the annual reporting and record-
keeping burden. These estimates have been revised in light of the
comments on the proposed rules and the changes in the regulations.
Consistent with the comments and a thorough consideration of the
potential burdens imposed by the reporting, recordkeeping and
disclosure requirements of the regulations, the statement of the
burden has been reduced from that stated in the NPRM, based upon
changes in the regulations that will significantly reduce the burdens
on institutions and upon more accurate estimates of the burdens
imposed by specific requirements.
The mean hours per response for initial reports of conflicts of
interest have been significantly increased to account for the review
by the institution of all the financial disclosures relating to an
award. Although not more than 200 reports of conflicts of interest
are expected, the institutions will need to review all financial
disclosures associated with PHS funding awards to determine whether
or not any conflicts of interest exist. Thus, the total burden of
16,000 hours is based on estimates that it will take, on the average,
four-fifths of an hour to review each of the 20,000 financial
disclosures associated with PHS funding awards. If the number of
disclosures is reduced because of the increase in the amount of the
threshold for significance, the burden may be an overestimate.
The burden for subsequent reports of conflicts (made during the
twelve month period after the initial report) is significantly less,
because we do not expect many additional reportable conflicts and
there will be only a limited number of disclosures to review.
We have significantly reduced the respondent number for reporting
that failure of an investigator to comply with the institution's
conflict of interest policy has biased the design, conduct or
reporting of the research ( 50.606(a)). We have estimated there
will be no more than five such instances and we think that is a
generous estimate.
For recordkeeping, we have listed the number of files expected to be
necessary, rather than the number of institutions, because it will
result in a more accurate estimation. The 20,000 figure is based
upon 35,000 awards annually, reduced to account for those
investigators who will not have any disclosures (no files are
required to be established) and those investigators with more than
one award. We have estimated it will take four hours, on the
average, for the establishment and maintenance of each file.
Although we believe this to be a very generous estimate, we note that
it will include the time of both administrative and clerical
personnel.
The burden figures for informing each investigator of the
institution's policy are based upon 2,000 recipient institutions and
20 hours for the performance of this function. This time burden
could be reduced even further if institutions choose to inform
investigators through a notice in the grant application
procedures. This method of notification would be acceptable because
the regulations do not specify the method of notification.
The financial disclosures burden estimate ( 50.604(c)) is based upon
an investigator figure of 35,000 with an average response time of one
hour. We believe experience may show that the number of disclosures
will be significantly less because of the increases in the reporting
threshold. Note that we have not attempted to calculate the overall
hours spent by the institution to establish the necessary
administrative mechanisms to comply with the regulations. The
estimates are for burdens imposed by disclosure, reporting and
recordkeeping requirements, not all activities of an institution that
may result from the regulations.
Title: Responsibility of Applicants for Promoting Objectivity in
Research for which Public Health Service (PHS) Funding is Sought.
Description: The regulations would require each applicant/offeror
Institution to establish procedures to identify and manage, reduce,
or eliminate any conflicting financial interest of an Investigator
involved in the design, conduct or reporting of the research for
which PHS funding is sought.
Description of Respondents: Public and private non-profit
institutions, small business, and other for-profit organizations and
investigators working for such institutions, businesses and
organizations.
ESTIMATED ANNUAL REPORTING AND RECORDKEEPING BURDEN
42CFR 45CFR # Hrs Hrs Hrs tot
Rspdnts p/rsp 42CFR 45CFR
Reporting:
50.604(g)(2) 94.4(g)(2) 200 80.0 14,000 2,000 16,000
50.604(g)(2) 94.4(g)(2) 30 2.0 54 6 60
50.606(a) 94.6(a) 5 10.0 40 10 50
TOTAL: 16,110
Recordkeeping:
50.604(e) 94.4(e) 20,000 4 72,000 8,000 80,000
TOTAL: 80,000
Disclosure:
50.604(a) 94.4(a) 2,000 20.0 36,000 4,000 40,000
50.604(c) 94.4(c) 35,000 1 31,600 3,400 35,500
TOTAL: 75,000
TOTAL BURDEN: 171,110
In accordance with the requirements of the Paperwork Reduction Act of
1980, the Department of Health and Human Services has submitted the
information collection requirements cited above to OMB for review and
approval. Organizations and individuals desiring to submit comments
on the information collection requirements and the estimated burden
should direct such comments to the information address cited above
and to: NIH/PHS Desk Officer, Office of Information and Regulatory
Affairs, OMB, New Executive Office Building, room 10235, 725 17th
St., N.W., Washington, DC 20503.
Catalogue of Federal Domestic Assistance
The rule will affect all extramural research, research and
development, and research and development support funded by the
Public Health Service. Questions about the rule should be directed
to Dr. George J. Galasso, Associate Director for Extramural Affairs,
National Institutes of Health, Building 1, Room 152, 9000 Rockville
Pike, MSC 0154, BETHESDA, MD 20892-0154. The telephone number is
(301) 496-5356 (this is not a toll-free number).
List of Subjects
42 CFR Part 50 - Grant programs-health; Conflict of interest; Medical
research; Behavioral, biological, biochemical, psychological and
psychiatric research.
45 CFR Part 94 - Government procurement.
Dated:
Philip R. Lee, M.D.
Assistant Secretary for Health
Approved:
Donna E. Shalala, Ph.D.
Secretary
Accordingly, 42 CFR Part 50 and 45 CFR Subtitle A are amended as set
forth below:
1. Subpart F is added to 42 CFR Part 50 to read as follows:
Subpart F--Responsibility of Applicants for Promoting Objectivity in
Research for which PHS Funding is Sought
50.601 Purpose.
50.602 Applicability.
50.603 Definitions.
50.604 Institutional Responsibility Regarding Conflicting
Interests of Investigators.
50.605 Management of Conflicting Interests.
50.606 Remedies.
50.607 Other HHS regulations that apply.
Authority: 42 U.S.C. 216, 289b-1, 299c-3.
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 Investigator.
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 this subpart by each Institution, to each
Investigator participating in such research (see 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.
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
children.
"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
institution;
(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 Public Law 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 Public Law 102-564.
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 in 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 identification.
(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.
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-
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
conflicts.
(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.
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 project.
(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 research.
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 Governments
45 CFR Part 76---Government-wide debarment and suspension (non-
procurement)
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
2. A new Part 94 is added to 45 CFR, Subtitle A, to read as follows:
45 CFR Part 94--Responsible Prospective Contractors
94.1 Purpose.
94.2 Applicability.
94.3 Definitions.
94.4 Institutional Responsibility Regarding Conflicting
Interests of Investigators.
94.5 Management of Conflicting Interests.
94.6 Remedies.
Authority: 42 U.S.C. 216, 289b-1, 299c-3.
94.1 Purpose.
This part promotes objectivity in research by establishing standards
to ensure there is no reasonable expectation that the design,
conduct, or reporting of research to be performed under PHS contracts
will be biased by any conflicting financial interest of an
Investigator.
94.2 Applicability.
This part is applicable to each Institution that seeks PHS funding
for research and, through the implementation of this part, to each
Investigator who participates in such research (see 94.4(a));
provided that this part does not apply to SBIR Program Phase I
applications.
94.3 Definitions.
As used in this part:
"Contractor" means an entity that provides property or services for
the direct benefit or use of the Federal Government.
"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 public or private entity or organization
(excluding a Federal agency) (1) that submits a proposal for a
research contract whether in response to a solicitation from the PHS
or otherwise, or (2) that assumes the legal obligation to carry out
the research required under the contract.
"Investigator" means the principal investigator and any other person
who is responsible for the design, conduct, or reporting of a
research project funded by PHS, or proposed for such funding. For
purposes of the requirements of this part relating to financial
interests, "Investigator" includes the Investigator's spouse and
dependent children.
"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.
"Public Health Service Act" or "PHS Act" mean the statute codified at
42 U.S.C. 201 et seq.
"PHS Awarding Component" means an organizational unit of the PHS that
funds research that is subject to this part.
"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 part, the term includes any such activity for which
funding is available from a PHS Awarding Component, 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
institution;
(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 pubic 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 reasonably 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 Public Law 97-219, the Small Business
Innovation Development Act, as amended. For purposes of this part,
the term SBIR Program includes the Small Business Technology Transfer
(STTR) Program, which was established by Public Law 102-564.
94.4 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 part 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 subcontractors, or collaborators, the Institution
must take reasonable steps to ensure that Investigators working for
such entities comply with this part, 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 part.
(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 part 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 three years after final payment or, where applicable, for the
other time periods specified in
48 CFR Part 4 Subpart 4.7.
(f) Establish adequate enforcement mechanisms and provide for
sanctions where appropriate.
(g) Certify, in each contract proposal, that:
(1) there is in 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 any 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 part; 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 identification.
(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 part.
94.5 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, 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-
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 the 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
conflicts.
(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.
94.6 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
project.
(b) The HHS may at any time inquire into the Institutional procedures
and actions regarding conflicting financial interests in PHS-funded
research, including a review of all records pertinent to compliance
with this part. HHS may require submission of the records or review
them on site. 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 part. The issuance of a
Stop Work Order by the Contracting Officer may be 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 part, the Institution must require disclosure of the conflicting
interest in each public presentation of the results of the research.
.
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