Daily Rules, Proposed Rules, and Notices of the Federal Government
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Proper stewardship of Federal funds includes ensuring objectivity of results by protecting Federally-funded research from potential bias due to investigator financial conflicts of interest (FCOI).
In 1995, the PHS and the Office of the Secretary of HHS published regulations at 42 CFR Part 50 Subpart F and 45 CFR Part 94 (the regulations), that are designed to promote objectivity in PHS-funded research.
• The Institution
• The PHS Awarding Components
• Completely disclose,
• Appropriately review, and
• Robustly manage identified conflicts.
The purpose of the existing regulations is to ensure that there is no reasonable expectation that the design, conduct, or reporting of PHS-funded research will be biased by any Investigator FCOI.
Since the publication of these regulations, the pace by which new discoveries are translated from the research bench into effective treatment of patients has accelerated significantly and the biomedical and behavioral research enterprise in the United States has grown in size and complexity. For example, an analysis of financial support of biomedical research from 1994 to 2004
Researchers frequently work in multidisciplinary teams to develop new strategies and approaches for translating basic research into clinical application, thus hastening discovery and advancing human health. In addition, these newer translational strategies often involve complex collaborations between investigators and the private sector.
The growing complexity of biomedical and behavioral research; the increased interaction among Government, research institutions, and the private sector in attaining common public health goals while meeting public expectations for research integrity; as well as increased public scrutiny, all have raised questions as to whether a more rigorous approach to Investigator disclosure, management of financial conflicts, and Federal oversight is required. Consequently, we previously published an Advance Notice of Proposed Rulemaking (ANPRM) in the
1. Expanding the scope of the regulation and disclosure of interests
2. Definition of “significant financial interest” (including questions regarding the appropriate de minimis threshold and exemptions to the definition)
3. Identification and management of conflicts by Institutions
4. Assuring institutional compliance
5. Requiring Institutions to provide additional information to the PHS
6. Institutional conflict of interest
After careful consideration of the comments received in response to the ANPRM and further deliberation within the Department, we are proposing substantial revisions to the current regulations, detailed below. The specific comments to the ANPRM are discussed in the relevant sections describing the proposed changes to the regulations. We believe that the proposed revisions would expand and add transparency to investigator disclosure of SFIs as well as enhance regulatory compliance and effective FCOI oversight.
The following provides a more detailed discussion of the proposed revisions to the current regulations in the order that they would appear in 42 CFR Part 50, Subpart F and 45 CFR Part 94.
We are proposing minor revisions to the text of this section. These revisions reflect a broader effort to improve internal consistency with regard to the use of various terms and phrases throughout these regulations. As a general matter, along with the more substantive changes to the regulations discussed further below, we are seeking to use this rulemaking proceeding as an opportunity to refine the current text of the regulations to improve clarity and readability for users.
The current regulations at 42 CFR Part 50, Subpart F, are applicable to each Institution that applies for PHS grants or cooperative agreements for research and, through implementation of the regulations by each Institution, to each Investigator participating in such research.
When the existing regulations were published as a final rule in 1995, it was acknowledged in the preamble that SBIR/STTR Phase I applications “are for limited amounts.”
In light of these factors, we asked in the ANPRM whether the scope of the regulations should be expanded to cover SBIR/STTR Phase I applications. Many of the respondents to the ANPRM indicated that any and all applications and proposals for PHS funding should be subject to the regulations, including SBIR/STTR Phase I applications. For the reasons stated above and the sentiment expressed in public comments on the ANPRM, we are proposing to broaden the applicability of the regulations by eliminating the current exception for SBIR/STTR Phase I applications.
We also propose to add language in this section clarifying that the regulations continue to apply once the PHS-funded research is underway (
We propose to add several new definitions in this section of the regulations, revise some of the existing
Under the current regulations, an Investigator generally is obligated to disclose SFIs on a project-specific basis (
We have also revised this definition to eliminate reference to the Investigator's spouse and dependent children. As described further below, we propose to include reference to an Investigator's spouse and dependent children in the revised “significant financial interest” definition.
We propose to revise the definition of “significant financial interest” as follows, incorporating the proposed definitions of “financial interest” and “institutional responsibilities” described above:
“(i) With regard to any publicly traded entity, a
“(ii) With regard to any non-publicly traded entity, a
“(iii) Intellectual property rights (
“(2) The term
This revised SFI definition would differ from the current SFI definition in a number of respects.
In a hypothetical example, the proposed changes to the monetary threshold would operate as follows. Assume an Institution has required an Investigator, who conducts biomedical research at the Institution, to complete a form disclosing her SFIs. Among the Investigator's financial interests are the following: $3,000 in consulting fees that she has received in the past twelve months from Pharmaceutical Company A; stock in Pharmaceutical Company A held by her husband worth $2,500 as of the date of disclosure; and stock options she holds in Start-Up Company B, a private biotechnology firm whose only products are in the early research and development stage. Assuming that these financial interests reasonably appear to be related to the Investigator's institutional responsibilities, the Investigator would be required to disclose them as SFIs. A SFI in Pharmaceutical Company A would exist because the aggregated value of her remuneration for the past twelve months and her husband's equity interest in the company exceeds $5,000 ($3,000 + $2,500 = $5,500). A SFI in Start-up Company B would exist because the Investigator would have an obligation to disclose any ownership interest in a non-publicly traded entity, even if the interest has only potential monetary value as of the time of disclosure.
We recognize that lowering the monetary threshold, as proposed, is not without cost. In particular, while we believe that certain elements of the revised “significant financial interest” definition would make the disclosure and review obligations of Investigators and Institutions more efficient, we recognize that incorporating a lower monetary threshold is likely to lead to increased administrative burden on Investigators and Institutions because more financial interests are likely to be subject to disclosure and review. For this reason, we considered a variety of alternatives for the proposed regulations including a threshold that would be approximate to the current standard (
We declined to propose a threshold equivalent to the current standard because we do not believe that this approach would be consistent with our statutory mandate to revise the regulations for the purpose of “strengthening Federal and institutional oversight and identifying enhancements, including requirements for financial disclosure to institutions * * *.” Public Law 111-117, Div. D, Tit. II, sec. 219, 123 Stat. 3034 (2009). In addition, when we raised this question in the ANPRM, a majority of respondents who addressed this question favored lowering the monetary disclosure threshold. These responses were consistent with our own sense that Institutions would welcome greater transparency regarding Investigator financial interests because additional information would help them to better manage identified FCOI. Thus, for example, even if an Investigator's disclosed SFIs falling below the current monetary threshold would not themselves result in new FCOI determinations, the information could provide context for the Institution's management of higher value SFIs that the Institution determines are FCOI.
Given the arguments in favor of lowering the monetary threshold, we analyzed whether a significantly lower threshold (
Notwithstanding these arguments for a significantly lower monetary threshold, we are concerned that the administrative costs associated with disclosure and review of all but negligible financial interests would outweigh the intended benefit of these regulations in promoting objectivity in research. For example, given the existing (and proposed) obligation on Investigators to update SFI disclosures during the period of award, we believe it would be a challenge for Investigators and Institutions alike to comply with this provision every time a new, all-but-negligible financial interest was obtained by the Investigator.
We welcome comment on all aspects of the proposed “significant financial interest” definition, including comments regarding the appropriate balance between the costs that may be associated with expanding the number of financial interests subject to disclosure as a result of a lower monetary threshold versus the potential benefits that might be expected to result from the lower threshold.
Examples of payment for services: The current definition references as examples of payments for services, receipt of consulting fees, or honoraria. We propose to add “paid authorship” and “travel reimbursement” as additional examples in the revised definition. With regard to “paid authorship,” in particular, although there should be little question that receipt of payment from an entity in exchange for the drafting of a
Royalties & Intellectual Property: Under the existing regulation, royalties are included among the “payments” subject to the $10,000 threshold. Under the proposed regulations, the $5,000 threshold would apply to equity interests and “payment for services,” which would include salary but not royalties. Royalties nevertheless would be potentially subject to disclosure, as would other interests related to intellectual property. Specifically, the revised definition would potentially apply to any of the following: Intellectual property rights (
In developing the proposed exclusions to the SFI definition, we considered various alternatives, including whether the exclusions described above should be limited solely to income from federal, state, or local government agencies (
With regard to the current exclusion for any ownership interests in the institution if the institution is an applicant under the SBIR or STTR programs, we propose to broaden this exclusion to include any ownership interest in the Institution held by the Investigator if the Institution is a commercial or for-profit organization (whether or not an SBIR/STTR applicant). This proposed change is based primarily on the recognition that ownership in one's own company not only is generally an inherent and understood financial interest, but also is an interest that the Institution is already in a position to know without having to request an Investigator to include it in a disclosure of SFIs.
For similar reasons, we do not propose to make substantive changes to the current exclusion for salary, royalties, or other remuneration paid by the Institution to the Investigator, other than to limit the exception to circumstances in which the Investigator is currently employed or otherwise appointed by the Institution. With regard to current employees and appointees, we believe not only that these financial interests are inherent and understood, but also that an Institution is in a position to know this information without having to request Investigators to include it in a disclosure of SFIs. However, other Investigators (
We welcome comment on the proposed exclusions to the SFI definition, including, for example, whether the proposed exclusion for income from teaching and advisory committee-related activities should be expanded to apply to all public or non-profit entities (similar to the current regulations) or to specific categories of public or non-profit entities, or further narrowed to apply solely to federal, state, or local government agencies. We are particularly interested in comments about the balance between the cumulative burden of the inclusion of non-profits (or certain categories of non-profits) in conjunction with defining SFIs to include institutional responsibilities and the potential benefit to be gained from such disclosures.
We propose to revise substantially the regulation addressing the responsibilities of Institutions regarding Investigator FCOI.
Subsection (a) of the current regulation provides, in part, that each Institution must maintain an appropriate written, enforced policy on conflict of interest that complies with the regulations. We propose to revise this provision to require an Institution
The current subsection (a) also requires, in part, that each Institution must inform each Investigator of its policy on conflict of interest, the Investigator's disclosure responsibilities, and of these regulations. We propose to address this requirement as a new subsection (b), and to add to this new subsection an Investigator training requirement. Specifically, we propose that Institutions shall require Investigators to complete training regarding the Institution's FCOI policy, the Investigator's responsibilities regarding disclosure of FCOI, and the regulations, prior to engaging in PHS-funded research and, thereafter, at least once every two years. This proposal is consistent with the comments of a majority of the respondents to the ANPRM, who supported adding an Investigator FCOI training requirement.
The current subsection (a) also states that if the Institution carries out the PHS-funded research through subgrantees, contractors, or collaborators (or, in the case of PHS contracts, subcontractors or collaborators), the Institution must take reasonable steps to ensure that Investigators working for such entities comply with the regulations, 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 the regulations. We propose to create a new subsection (c) that would provide a substantially expanded clarification of an Institution's obligations with regard to PHS-funded research carried out through a subrecipient (
Therefore, we propose to include as part of the new subsection (c) the following requirements: An Institution that carries out the PHS-funded research through a subrecipient must incorporate as part of a written agreement with the subrecipient legally enforceable terms that establish whether the FCOI policy of the awardee Institution or that of the subrecipient applies to the subrecipient's Investigators. If the subrecipient's FCOI policy applies to subrecipient Investigators, the subrecipient shall certify as part of the agreement that its policy complies with the regulations. If the subrecipient cannot provide such certification, the agreement shall state that subrecipient Investigators are subject to the FCOI policy of the awardee Institution. If the subrecipient's FCOI policy applies to subrecipient Investigators, the agreement shall specify time period(s) for the subrecipient to report all identified FCOI to the awardee Institution. Such time period(s) shall be sufficient to enable the awardee Institution to provide timely FCOI reports, as necessary, to the PHS. If subrecipient Investigators are subject to the awardee Institution's FCOI policy, the agreement shall specify time period(s) for the subrecipient to submit all Investigator disclosures of SFIs to the awardee Institution. Such time period(s) shall be sufficient to enable the awardee Institution to comply timely with its review, management, and reporting obligations under the regulations. Subsection (c) would also require that the Institution must provide FCOI reports to the PHS regarding all FCOI of all subrecipient Investigators consistent with the regulations. We believe that the addition of the above text in the new subsection (c) would help clarify for Institutions and their subrecipients the requirements of both parties in these relationships and promote greater compliance with the regulations.
Subsection (b) of the current regulation requires that an Institution must designate an institutional official(s) to solicit and review financial disclosure statements from each Investigator who is planning to participate in PHS-funded research. In the ANPRM, we asked whether large Institutions (defined as greater than 50 employees) should be required to establish an independent committee to review financial disclosures, and require that committee to report to an organizational level within the Institution that is not conflicted by the short-term financial interests of the Investigator or Institution. After considering the responses, we weighed the complexity of the issues that can arise in reviewing financial interests and evaluating conflicts, as well as the potential practical difficulty in determining which Institutions would fall within a “large” Institution definition and which would not. As a result, we do not propose to change the redesignated subsection (d). That being said, however, we strongly encourage each Institution to form a committee of adequate size and scope to review Investigator SFI disclosures and assess comprehensively the potential conflicts that may arise in the Institution. In addition, since reviewing Investigator financial disclosures for potential FCOI can involve many complex issues, we recommend that Institutions consult available resources from the Federal government(
The current subsection (c) requires that by the time an application is submitted to the 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 SFIs (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. All financial disclosures must be updated during the period of award, either on an annual basis or as new reportable SFIs are obtained. In the ANPRM, we asked whether this
Specifically, in addition to requiring that each Investigator who is planning to participate in the PHS-funded research disclose to the Institution's designated officials the Investigator's SFIs (and those of the Investigator's spouse and dependent children), the Institution also would have to require that each Investigator who is participating in the PHS-funded research submit an updated SFI disclosure: (1) At least annually during the period of the award, including disclosure of any information that was not disclosed initially to the Institution or in a subsequent SFI disclosure, and disclosure of updated information regarding any previously-disclosed SFI (
The existing subsection (d) requires an Institution to provide guidelines consistent with the regulations 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. We propose to reorganize and expand this requirement in a redesignated subsection (f) to clarify an Institution's obligations. First, the guidelines to be provided by an Institution for the designated institutional officials would be required to address two related tasks, specifically, determination of whether an Investigator's SFI is related to PHS-funded research and, if so related, whether the SFI is a FCOI. Under the current regulations, the Investigator bears the responsibility for determining the relatedness of a SFI to the PHS-funded research as part of the disclosure process (42 CFR 50.604(c), 45 CFR 94.4(c)). As discussed above, however, the proposed regulations would revise the definition of “significant financial interest” to address “institutional responsibilities” and, as a result, SFIs subject to disclosure by an Investigator to an Institution would not be specific to a particular PHS-funded research project. Consistent with these proposed changes, the responsibility for determining whether an Investigator's SFI is related to PHS-funded research would shift to the Institution. This subsection would provide that an Investigator's SFI is related to PHS-funded research when the Institution, through its designated officials, reasonably determines that the SFI: (1) Appears to be affected by the PHS-funded research; or (2) is in an entity whose financial interest appears to be affected by the research.
To provide clarification regarding the determination of whether an Investigator's SFI is a FCOI, the redesignated subsection (f) would incorporate modified language moved from subsection (a)(1) of the current 42 CFR 50.605 and 45 CFR 94.5. Specifically, this subsection would provide that a FCOI exists when the Institution, through its designated officials, reasonably determines that the SFI could directly and significantly affect the design, conduct, or reporting of the PHS-funded research. As discussed above, the proposed regulations would also incorporate a definition of “financial conflict of interest” that is similarly based on this language.
With regard to the current requirement in subsection (d) regarding FCOI management responsibilities, we propose to include this requirement in a separate subsection (g) and clarify that the requirement includes management of any financial conflicts of a subrecipient Investigator pursuant to the new subsection (c), described above. We also propose to cross-reference the Institution's revised management responsibilities that we propose in 42 CFR 50.605(a), 45 CFR 94.5(a), including development and implementation of a management plan and, if necessary, a mitigation plan. Additional discussion of these proposed revisions is addressed below. As a related matter, we propose to include a new subsection (h) that cross-references the Institution's revised and expanded reporting requirements in the proposed new subsection 42 CFR 50.605(b), 45 CFR 94.5(b).
Subsection (e) of 42 CFR 50.604 currently requires an Institution to 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. Correspondingly, subsection (e) of 45 CFR 94.4 currently requires an Institution to 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. We propose to revise this requirement in a redesignated subsection (i) of both 42 CFR 50.604 and 45 CFR 94.4 to include a responsibility to maintain records relating to all Investigator disclosures of financial interests and the Institution's review of, or response to, such disclosures (whether or not a disclosure resulted in the Institution's determination of a FCOI). We believe that this proposed revision would help clarify for Institutions our intent for the record retention obligation to apply not only in cases in which the Institution has identified a FCOI, but to all Investigator SFI disclosures whether or not such disclosure generated a response by the Institution.
The existing regulations require at subsection (f) that Institutions establish adequate enforcement mechanisms and provide for sanctions where appropriate. We propose to revise this obligation in a redesignated subsection (j) to require an Institution to establish not only adequate enforcement mechanisms and provide for employee sanctions, but also to provide for other administrative actions to ensure Investigator compliance as appropriate.
We propose to revise and, in some respects, shorten the certification requirement currently set forth in subsection (g). In a redesignated subsection (k), the revised requirement would require an Institution to certify that the Institution (1) has in effect at that Institution an up-to-date, written,
We propose to revise and expand substantially the current regulation regarding management of FCOI to address requirements for both management and reporting of FCOI.
The existing regulations require, at subsection (a), that an Institution's designated official(s) review all financial disclosures and determine whether a conflict of interest exists. If so, the official(s) must determine what actions should be taken by the institution to manage, reduce or eliminate such conflict of interest. Under the existing regulation, a conflict of interest exists when the designated official(s) reasonably determines that a SFI could directly and significantly affect the design, conduct, or reporting of the PHS-funded research. Subsection (a) also provides examples of conditions or restrictions that might be imposed to manage conflicts of interest, specifically, public disclosure of SFIs, monitoring of research by independent reviewers, modification of the research plan, disqualification from participation in all or a portion of the research funded by the PHS, divestiture of SFIs, or severance of relationships that create actual or potential conflicts.
We propose to revise the above language as part of a redesignated subsection (a)(1) to require that, prior to the Institution's expenditure of any funds under a PHS-funded research project, the designated officials of an Institution shall, consistent with subsection (f) of the preceding section (42 CFR 50.604 or 45 CFR 94.4): Review all Investigator disclosures of SFIs; determine whether any SFIs relate to PHS-funded research; determine whether a FCOI exists; and, if so, develop and implement a management plan that shall specify the actions that have been, and shall be, taken to manage such FCOI. The most significant change in the above proposed text is the introduction of a management plan requirement. Although the existing regulations require Institutions to manage FCOI, the term “management plan” is not used. While many Institutions currently may develop and implement management plans as a means of fulfilling their FCOI management responsibilities, we believe that explicitly incorporating this requirement into the regulations would further help to prevent the introduction of bias into PHS-funded research across the research community. We have not proposed to specify comprehensively in this subsection what elements must be included in a management plan, however, as indicated in the discussion of subsection (b) below, the expanded reporting requirements that we propose would include an obligation to report a description of certain “key elements” of the Institution's management plan in certain FCOI reports. Another change in this subsection would be the deletion of the current sentence that describes when a financial conflict of interest exists. As d