NIH eases ban on employees owning drug, biotech stock

By Kevin Freking, Associated Press

WASHINGTON -- Officials at the National Institutes of Health said yesterday that rules designed to reduce conflicts of interest at the agency went too far, so they eased a prohibition on owning stock in pharmaceutical and biotechnology companies for thousands of employees.

Under the new regulation, about 200 senior employees as well as their spouses and minor children will be prohibited from owning more than $15,000 worth of such stock. Any holdings above that amount will have to be sold by Jan. 30.

But an interim rule issued in February would have had a much broader impact.

Under that rule, about 6,000 scientists and other high-ranking employees would have been required to sell their stock holdings in such companies entirely. An additional 12,000 employees would have been required to keep such holdings to a maximum of $15,000 in value.

The divestiture rule proved unpopular with NIH employees and threatened the agency's ability to attract top talent, NIH officials had said prior to yesterday's announcement. It never went into effect. The revisions take effect Tuesday.

While the stock ownership rule was relaxed, a ban on consulting work in industry remains in place.

The agency issued the new ethics rules for its employees in the aftermath of media reports that some researchers received thousands of dollars from outside industries, which had the potential to influence their work at NIH, the primary federal agency for conducting medical research.

''The issues that we were facing were not related to stock holdings in great part," said Elias Zerhouni, NIH director.

''Therefore, this is where I convinced myself it was not necessary to have a blanket divestiture rule."

Zerhouni said he decided to continue to keep in place a ban on outside consulting work by NIH staff for pharmaceutical and biotechnology companies, as well as companies that make medical devices.

''These rules are the most restrictive of any rules we know about in the world of biomedical research," Zerhouni said. ''The rules as you see them today are extremely stringent. With the ban on consulting for paid activities, I think Congress should be very fully reassured we've addressed the fundamental issue of public trust in the integrity of the science."

© Copyright 2005 The New York Times Company

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