Wall Street Journal - June 22, 2004
Bernard Wysocki Jr., Staff Reporter of The Wall Street Journal

WASHINGTON - The National Institutes of Health, long a sacred cow in Washington, is coming under fire from the very Congress that once showered it with funds.

After doubling its annual budget to $28 billion in the past five years, Congress has given NIH tiny increases this year, as large fiscal deficits force budget tightening. Meanwhile, lawmakers are pressing agency officials to explain how they spend all the money -- and why there isn't more bang for these bucks.

More ominously for the agency, congressional investigators have launched a high-profile probe into the outside activities of NIH scientists, many of whom already enjoy special exemptions from civil-service salaries and command salaries of as much as $200,000 a year.

The congressional probe is delving into potential conflicts of interest within NIH, following disclosures that scores of NIH scientists enjoy lucrative consulting relationships, often with pharmaceutical and biotechnology companies.

A House subcommittee will hold the third in a series of hearings on these sometimes-lucrative outside activities today. Lawmakers are expected to make public a list of 122 awards and prizes given to NIH scientists and administrators since 1999, totaling about $575,000. In 34 cases, the House documents show, the money came from universities and other institutions that get NIH grants, creating at least the appearance of impropriety in some cases, House investigators say.

It is an unusual battering for NIH, whose 27 component institutes and centers have long been admired as the crown jewel of America's biomedical research effort. Several steps taken by Elias Zerhouni, the director of NIH since 2002, to put some restrictions on outside activities have failed to mollify lawmakers.

"When people get awards from a grantee, there's at least the appearance of conflict of interest," says Rep. Jim Greenwood (R., Pa.) chairman of the House subcommittee. He said Dr. Zerhouni is expected to come before the panel today and make proposals covering awards and outside consulting. "In the main, they are pretty darn good."

Some committee members have openly scoffed at the recommendations of a blue-ribbon commission appointed by the 53-year-old NIH director. This clearly caught Dr. Zerhouni, a former senior administrator at Johns Hopkins University in Baltimore, off guard, since he believes the blue-ribbon panel recommended "draconian" steps, including limiting the size of consulting fees from industry and banning outside consulting activity by high-ranking NIH officials.

NIH is in the spotlight for more than the conflict-of-interest investigations. The huge increase in funding has prompted legislators to demand high-profile results against diseases. The impatience crops up repeatedly, as members of Congress often emphasize to NIH officials that its vast research should ultimately translate into treatment for diseases.

Further denting its image, lawmakers are using the NIH as a springboard into a wider investigation of ethics in government. Friday, the House Energy and Commerce Committee expanded the conflict-of-interest inquiry beyond NIH to 15 federal agencies. "Our goal is to learn whether the practices we have uncovered at NIH also exist in other agencies," Rep. Joe Barton (R., Texas) the committee chairman, said Friday.

Dr. Zerhouni in a recent interview said he had grave misgivings about a complete ban on outside activities, particularly on payments for writing and speaking. "If that's under attack," he said, "then we have a real issue."

The NIH guidelines on outside activities were loosened by Dr. Zerhouni's predecessor, Harold Varmus, in 1995, when, Dr. Varmus says, NIH was having trouble recruiting top private-sector talent. Dr. Varmus, now president of Memorial Sloan-Kettering Cancer Center in New York, says a new NIH vaccine center couldn't have recruited 10 top scientists recently without the enticements of high pay and outside income.

Gary Nabel, director of the vaccine center, says 80% of these critical subordinates do outside speaking and writing, and about half do outside industry consulting for pay. Dr. Nabel himself has consulted on gene therapy in cardiovascular disease. It is an area of expertise that he says doesn't conflict with his current job, which is to oversee development of vaccines for the AIDS, Ebola and other viruses.

Dr. Nabel says he hasn't had any turnover among the top people recruited over the past five years. However, he says, if a ban on all outside activity is imposed, "the most talented people" would be tempted to leave NIH.

One target of the probe by Congress is Richard Klausner, former director of the National Cancer Institute. In 2002, shortly after he stepped down, the cancer institute awarded a $40 million contract to Harvard University for drug-discovery research. The lead scientist at Harvard later formed a private company, made Dr. Klausner an officer and awarded him stock in the enterprise. Dr. Klausner says he didn't have any role in awarding the Harvard contract and joined with the private company only after leaving government service. Currently, Dr. Klausner is a senior official at the Bill & Melinda Gates Foundation, which funds infectious-disease research.

In a separate case, several members of Congress lashed into two officials, one of NIH, the other of the Food and Drug Administration, who worked together in their official capacities with one biotech company while moonlighting for a competitor. Both officials stopped the moonlighting, after protests. More witnesses are expected to come before the House panel this morning.

The agency's growing budget has brought it a different kind of scrutiny. Some legislators see it as never satisfied. Sen. Pete Domenici (R., N.M.) raised eyebrows this spring when he said NIH has "turned into pigs." A recent study by the Rand Corp., the California think tank, found that nearly half of the federal research and development budget is going to medical schools.

Lobbyists from academia and elsewhere sense the chilly new atmosphere toward NIH. There is "NIH fatigue" on Capitol Hill, one lobbyist says, and "lots of pushback" from once-friendly members of Congress and their staffs.

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