Bioe News

Published online: 21 April 2005, doi:10.1038/bioent859

Overreaction to violations stifle innovation

*George Mack is a freelancer based in Columbia, South Carolina.

A backlash over new ethics rules could yield a compromise, but biotech startups and innovation might suffer nonetheless.

NIH chief Elias Zerhouni's new ethics rules have NIH scientists and biotechs screaming, "primum non nocere!" © Reuters/CORBIS

Responding to criticism from its own ranks, the US National Institutes of Health (NIH) is mulling a compromise for the new ethics rules that apply to scientists in their employ. But the new rule may not be sufficiently practical to restore the free flow of communication between NIH scientists and biotech companies, and could therefore slow down drug discovery.

On February 1, researchers at the giant research organization were barred from earning fees as consultants to industry. They were also told they must divest themselves of shares in drug and healthcare stocks. The NIH's new ethics policy grew out of several incidents, the most problematic of which was the saga aired in a congressional hearing last June concerning psychiatric researcher Trey Sunderland, III. At issue was the not so small matter that he was reportedly paid more than $500,000 over five years to be a consultant to Pfizer. During at least part of this time, he was also studying the Alzheimer drug Aricept marketed by Pfizer. He did not reveal his Pfizer financial connection to his employers at the NIH or to his public audience in a televised presentation from the NIH which aired on C-SPAN.

		"'The new [NIH] rules are Draconian,' says George Martin, retired NIH researcher"

The Sunderland affair hit the radar screen on Capitol Hill at the very moment that Congress was mulling the NIH budget of $28.75 billion for fiscal 2005 at the time. At the very least, the timing of the Sunderland matter couldn't have been worse. Even though the NIH already had in place rules barring the type of payment that Sunderland received, the risk-averse NIH director Elias Zerhouni felt compelled to do an ethics rule spiff-up. What he didn't factor in was the backlash this would create among the scientists at the NIH, who were already feeling oppressed by onerous ethics rules. Indeed, what Zerhouni also didn't take into account was the impact his new ethics rules would have on biotech startups who often depend upon the guidance and bona fides of scientists with an NIH connection to develop their business plans and fill out their scientific advisory teams.

		"'There is no indication as to when that decision will be made,' says an NIH spokesman"

"The new [NIH] rules are draconian," says George Martin who was a researcher at NIH for 30 years and was later involved in two biotech startups, including S. San Francisco-based FibroGen. "This is a situation where some explanation could have done a lot of good," he says. "Zerhouni should have pointed out that most of these people are doing basic research and are not doing clinical trials and have no regulatory role. It is the role of the director to explain to Congress and deal with it in a common sense way."

But testifying on April 6 in front of the Senate Labor/Health and Human Services Appropriations Subcommittee, Zerhouni indicated he was not inclined to change the rules back to allow NIH scientists to work with business. However, he did leave the door open for employees to own biopharma stocks once again. This is helpful for the scientists, but cold comfort for biotech startups. An NIH spokesman says there is no indication as to when that decision will be made.

		"'Even this conversation is covered [under the new ethics rules],' said an anonymous NIH researcher"

The hope among biotech startups now is that once the dust has settled a bit on the Sunderland matter, the NIH will come up with amended rules that allow researchers in government and business to continue to cross-pollinate somehow—a practice that has for years benefited both sides. Bruce Cohen, CEO of Palo Alto-based Cellerant Therapeutics, which is developing stem cell-based medicines for hematopoietic disorders, says his company's science and medical advisory boards include no government employees. (Indeed, no biotech with NIH-linked advisors would comment for this story.) Cohen feels strongly that Zerhouni does not fully appreciate the degree to which the NIH's new ethics rules will harm both the NIH and smaller biotech firms. "The expertise of a [government scientist] is a really important asset that has contributed to success and innovation in the United States," he says. "One of the things that has made the biotechnology industry successful, and probably the pharmaceutical business, as well, has been the extraordinary degree to which there has been an ongoing public-private partnership." As it stands now, even the discussed ethics 'compromise' at the NIH might adversely affect both the agency and the biotech industry. A renowned researcher who might be running a lab of 50 people at NIH could well lend expertise to a startup, saving it time, money and frustration. A scientist of that stature might also be able to advise C-level executives on the feasibility of a proposed project and could be instrumental in a final decision to either go-ahead or drop a plan for development. But for now, free-flowing exchange between erudite scientists who could complement each other and speed up drug discovery and development has been replaced with anxiety, intimidation and uncertainty. One NIH researcher told Bioentrepreneur in a telephone interview, "even this conversation is covered" [under the new rules]. Calls to several larger biopharma companies yielded no available NIH employees to speak with.

George Martin lightheartedly recalls a cartoon hung on a bulletin board of his NIH lab which pictured a ship being rowed with lots of oars in the water. He recalls the legend, "The beatings will continue until morale is improved." Critics of the NIH and the biotech industry have a point when they argue that what is needed is more communication between the two, fully disclosed and transparent to the public—not less.