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Lessons from a Flood
Zerhouni Steers NIH Through Conflict of Interest Issue

By Rich McManus

Photos by Bill Branson

On the Front Page...

One year ago, NIH director Dr. Elias Zerhouni's waterfront home in Pasadena, Md., was nearly swallowed by the Chesapeake Bay, whose appetite had been churned up by Hurricane Isabel. The deluge, which ruined three cars and threatened the structure of a home he had helped design, taught him invaluable lessons in crisis management: emergency preparedness is sheer fiction until you've actually been in an emergency, and — in what has become a leadership mantra for him at NIH — it's not the blows you suffer that take the measure of a man or an institution, it's the way you respond to adversity that defines you.


Dr. Elias Zerhouni
In much the same way that Isabel threatened Zerhouni's home in September 2003, a wave of adverse publicity concerning conflict of interest at NIH washed over the institution later that fall, when newspaper reports indicated that NIH was not being sufficiently vigilant in monitoring the outside activities of a small percentage of its staff. The conflict-of-interest storm was to last for months, testing the mettle of both the NIH director and the agency.

Zerhouni recently described his reaction to the flood of negative press, explaining how the tides of controversy pushed hard on the foundations of NIH and how the agency faced up to the issue quickly enough and resolutely enough to convince Congress and NIH's huge constituency that we had the issue under control.

No Pain, No Gain

"This issue has raised a tremendous amount of angst and attention from all the constituencies that have an interest in NIH," Zerhouni acknowledged. "It has taken an enormous amount of energy for all involved at NIH." Asked what percentage of his administrative time conflict has consumed in the past year, he smiles and says, "Too much. But all worth it."

Zerhouni noted that rules governing outside activities "were changed in 1995 in a way that removed almost completely any limits on either level of compensation, type of compensation, number of hours [spent on outside work]. And as often happens when this goes on, you have outliers — a few who then become sort of standard bearers for the behavior of the agency. In this case, what really is painful to see is the few cases that have tainted the good work and dedication of thousands of good, dedicated employees who really didn't have any conflict of any sort."

He continued, "That's what I point out to whoever wants to hear — we have five or six thousand scientists, and the total number of individuals involved in this over 5 years is about 300 people. And within that 300, the number of cases that raised the ire of our constituencies, and the press, and Congress were fewer than that. Nonetheless, I think it is a lesson to be learned — there's no doubt that we could have done a lot better."

Zerhouni said the Jesse Gelsinger case, in which an academic scientist was found to have had a financial interest in a therapy that proved fatal to a patient, should have sufficiently forewarned the medical community about the danger of its outside ties.

Zerhouni observed that the 1995 ethics policy "is very simple — you do pretty much whatever you want to do — I think 99.5 percent of all requests were approved." But as he has sought to assure stakeholders that he has come to grips with the issue, some unfortunate events have unfolded. "The thing that was most embarrassing to me is when I was pretty sure — and I had said to Congress — that we hadn't harmed any patients and everybody had followed the rules, and then be told that over 100 scientists did not get approval for activities with industry — that truly was harmful in terms of perception. So we have to be honest with ourselves. The mark of a great organization is not so much how it stumbles, but how it recovers from the stumble, and I think that's where we are right now."

New Rules

Zerhouni said he thought the recommendations offered by the blue ribbon panel that had advised NIH on conflict last spring had been "very thoughtful," but acknowledged that reaction to its report was "initially quite negative. I think Congress felt a little betrayed by NIH, frankly. They felt angry. They have been strong supporters of NIH and our scientists across the board, and they supported the doubling of the NIH budget. Frankly, in the extramural community, the events were perceived with a lot of dismay. I received a lot of phone calls from deans and associations who basically said, 'We thought you were more rigorous than we were.' Lo and behold, they found this wasn't the case and that was conveyed to Congress in some indirect ways."

Zerhouni said he thought the blue ribbon panel "had done a great job" and was somewhat surprised by Congress' rejection of its recommendations. "But in the context of anger and disappointment, I think it was understandable — very understandable."

Zerhouni says, "The mark of a great organization is not so much how it stumbles, but how it recovers from the stumble, and I think that's where we are right now."

He disclosed that "initially, Congress truly wanted to ban [all outside activities], and the members of the committee have been very public about that...I was fortunate to be able to make contact with legislators and to help them understand what happened, how it happened, and why [a draconian response] might not be the right thing to do."

Zerhouni said that over the course of long discussion, a good consensus emerged that formed the basis of NIH's approach to the issue: stewards of public funds should never be vulnerable even to the perception that their activities could result in private gain. The top concern, he said, is, "How do you keep a true firewall and separation between the public trust — the money the public has given us in trust — and the activities of those who manage that resource?"

He doesn't think it was well appreciated outside of NIH that the agency "has a dual nature — number one, we are a granting agency, but number two, we are also one of the most advanced, most capable biomedical research institutions in the world. So we're both sort of an academic, scientific research place, and yet next to that we're also a government agency with its own rules and regulations...I said, look, we need to build a firewall around those who have fiduciary responsibility relative to the government, and those who do not. And that's where we came up with these much more stringent rules for directors, deputy directors, and people who have those authorities, versus those who do not."

NIH deputy director Dr. Raynard Kington has been put in charge of applying new managerial controls (see, some of which may eventually require legislation, Zerhouni said. "We need to show that we are, in fact, committed above all to the public's interest, and we are. I have no doubt about that." The fact that all institute and center directors voluntarily disclosed their holdings is a sign to Zerhouni of institutional good will. He said NIH cannot afford complacency and should become "a model of how to manage real and perceived conflict of interest — it's absolutely necessary."

When some members of Congress were surprised and angered that certain NIH scientists earned as much as the vice president of the United States, Zerhouni repeatedly emphasized the unfair nature of the comparison. "This is not the right comparison because there is only one job called vice president of the U.S., one job called congressman. Whereas scientists at NIH could walk across the street and do the exact same thing, with less restriction and more compensation. So we have to balance the public's interest in having our ability to retain and recruit good scientists to our agency. And I think Congress understood that. That was a good development, I thought."

Zerhouni said he is adamant that "pure academic activities such as writing a textbook and being part and parcel of academic life" be preserved and not impeded, owing to the research nature of the institution.

Opaque Rules Mean Poor Compliance

He admitted, "I think we were not as transparent as we should have been. I think our disclosure processes were opaque...Look at the fact that we didn't even know what the compensation was or what type of compensation our scientists were receiving. We didn't know that. Congressional committees had to go and ask industry to provide them with the information. It took us weeks and weeks to be able to collect the information here. So in some ways, we didn't have a transparent system, we didn't have a fully disclosed system."

He added, "The crossroads between ethics and science is a complicated one. When a decision needs to be made about what's an official duty or an outside activity on the basis of the scientific content of the activity, it's hard for me to see how just an ethics officer can do that. And that's who we delegate it to. So that's why creating NEAC (NIH ethics advisory committee) was a good step. It allows an element of peer review. I believe in peer review, and I see nothing wrong with having peers review the outside activities of their peers...The agency, in my view, was lacking that mechanism."

Zerhouni said he hears from NIH scientists that some don't comply with the approval process because it is "tedious, long, complicated, bureaucratic. Frankly, that needs to be corrected. We shouldn't impose that sort of difficult process, because then it's not complied with. Compliance requires you to have a decent process in place. We need to make efforts there, and we will," he said, envisioning a computerized, streamlined system.

Zerhouni singled out stock options as a particularly troublesome form of compensation, warning that they should be discouraged on the grounds that they persist over time and divide the loyalty of the employee. Service on corporate boards, too, is questionable because it pits fiduciary responsibilities to shareholders against responsibility to NIH. "I think we better just stay away from that," Zerhouni noted. At least an arm's length should always separate an NIH scientist's interest in outside activities, no matter how outwardly benign, he suggested.

Zerhouni hopes that, in the end, the conflict controversy will "make NIH the paragon of how to manage conflict of interest and be the example of how to do it right...Again, it's not how you fall that determines how great you are, it's how you pick up and go."

The great majority of officials at NIH support an attitude of "do whatever you can to get the right solution, to do what's right. I felt very supported by the NIH leadership, and the rank and file. That was a good aspect of the experience."

Congress, too, trusts us to get it right, he added. "I tremendously benefitted from bipartisan support and understanding here," he said. "Now we need to deliver, and I'm very confident we will."

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