On August 23, 2011, the Department of Health and Human Services ("HHS") published a final rule ("Final Rule") on financial conflicts of interest ("FCOI") affecting investigators and institutions that apply for or receive Public Health Service ("PHS") funding, including National Institutes of Health ("NIH") grants, contracts and cooperative agreements. The Final Rule implements substantial reporting requirement changes to the 1995 PHS conflicts of interest regulations (45 C.F.R. Part 50, Subpart F; 45 C.F.R. Part 94). The Final Rule is effective as of September 26, 2011, and it can be viewed on the NIH website. Institutions that are covered by the Final Rule must be in full compliance with all of the regulatory requirements:

  • No later than August 24, 2012
  • Immediately upon making its investigator FCOI policy publicly accessible as described in the Final Rule

In the interim, institutions should continue to comply with the 1995 regulations and report investigator FCOIs to the PHS Awarding Component as required in the 1995 regulations.

The Final Rule reflects an expanding national effort to increase transparency and FCOI reporting to assure scientific objectivity and integrity. The Final Rule comes nearly 18 months after the passing of the Patient Protection and Affordable Care Act ("Affordable Care Act") in March of 2010, which included "physician sunshine" provisions requiring drug manufacturers to report any payment or transfer of value to providers of $10 or more, and any ownership or investment interest held by a physician or an immediate family member.

Since the promulgation of the PHS conflicts of interest regulations in 1995, biomedical and behavioral research and the resulting interactions among government, research institutions and the private sector have become increasingly complex. This complexity, as well as a need to strengthen accountability, led to changes that expand and add transparency to investigators’ disclosure of significant financial interests ("SFIs"), enhance regulatory compliance and effective institutional management of investigators’ financial conflicts of interests and increase HHS compliance oversight.

Key Changes

The Final Rule implements a number of key changes to the FCOI rules including: revising the definition of SFI, the extent of investigator disclosure, the information reported to the PHS awarding component, the information made accessible to the public, and investigator training. For example, the revised regulations:

  • Require investigators to disclose to their institutions all of their SFIs related to their institutional responsibilities
  • Lower the monetary threshold at which SFIs require disclosure, generally from $10,000 to $5,000, and including income from a subset of non-profit institutions
  • Require institutions to report to the PHS awarding component additional information on identified FCOI and how they are being managed
  • Require institutions to make certain information accessible to the public concerning identified SFIs held by senior/key personnel
  • Require investigators to complete training related to the regulations and their institution’s investigator FCOI policy

Many of the revisions expand requirements that already existed in the 1995 regulations. For instance, investigators would be required to disclose a larger number of financial interests due to the revisions to the SFI definition. Also, institutions are already required to report any identified FCOI to the PHS Awarding Component under the 1995 regulations. However, the revised regulations, as mentioned above, will require these reports to contain additional information, including; the value of the financial interest or a statement that a value cannot be readily determined, the nature of the FCOI, a description of how the FCOI relates to PHS-funded research, and key elements of the institution’s management plan. To provide clarification regarding the determination of whether an investigator’s SFI is an FCOI, the Final Rule also includes a revised definition of FCOI.

The Final Rule also includes several new requirements such as a requirement for making investigator FCOI information available upon request and a requirement for a retrospective review of an investigator’s FCOI in those rare cases in which an institution identifies noncompliance with the regulations. In the Final Rule, however, the requirement for making information available upon request falls short of what was originally proposed in the NPRM —the mandate to post on a publicly accessible Web site information on SFIs of senior/key personnel that the institution determines are related to the PHS-funded research and constitute an FCOI. Consistent with the 1995 regulations, only the institution’s investigator FCOI policy must be posted on a publically accessible Web site.

Cost and Burden to Institutions

HHS estimates that the burden for current implementation of the 1995 regulations is approximately 80% of the burden estimated for implementing the revised regulations. The scope of investigator SFI disclosures will increase under the revised regulations, and the number of FCOI reports may increase as well. To accommodate the added burden commensurate with the Final Rule, HHS:

  • Lowered the frequency of training required to every four years (generally)
  • Increased the time for investigator disclosures and updates to no later than the time of application for PHS-funded research (and at least annually), and within 30 days of discovering or acquiring a new SFI, respectively
  • Increased the time for institutional review of disclosures to prior to expenditure of any funds under a PHS-funded research project, and within 60 days of identifying an SFI that was not previously disclosed or reviewed

HHS also added an estimated time for completing a retrospective review (120 days), and clarified that the time estimated for institutions to monitor investigator compliance with a management plan in the NPRM was calculated on a monthly rather than annual basis.

Institutions’ cost of implementing the amended regulations is an allowable cost that may be eligible for reimbursement as a Facilities and Administrative cost on PHS supported grants, cooperative agreements and contracts. This could offset some portion of the cost burdens of implementation for the affected institutions and through their implementation of the regulations, to the investigators. However, in some instances current cost principles may limit an institution’s ability to recover costs under the Facilities and Administrative cost mechanism.

Still Missing

Many commenters on the proposed rule suggested that the regulations also should address non-FCOI, such as publishing and academic advancement. Acknowledging that non-FCOI can influence the scientific process, HHS nevertheless chose to focus only on FCOI because it is a discrete area in which there is a heightened need to strengthen management and oversight.

Still, long after the PHS Act’s directive to protect publicly funded research from bias from both investigators and institutions, little has been done in the realm of institutional conflicts of interest to ensure that an institution’s own financial interests, such as royalties for helping a pharmaceutical company invent a drug, do not improperly influence decisions involving the institution's PHS-sponsored research. Although the revised regulations require PHS grantee institutions to have a written policy for identifying and managing investigator FCOI, there currently are no federal requirements in place that apply to the grantee institutions, themselves.

HHS maintains that it has considered all of the public comments on this issue and believes that requiring institutions to have a policy on institutional conflict of interest without providing additional guidance as to the nature and scope of that policy would lead to confusion and inconsistencies across institutions. HHS also believes that substantial additional information and deliberations are needed to formulate such guidance. Therefore, HHS limited the Final Rule to investigator FCOI. HHS will continue to consider the issue of institutional conflicts of interest together with the biomedical research community, including the question of whether it is appropriate to propose specific regulations to address this subject.