# Presentation: 549558

## NIH Ethics Program

- Supervisor Training:
- Reviewing the HHS-716
- November 2005

## What is a Substantially Affected Organization?

- A substantially affected organization (SAO) is defined in 5 CFR 5501 and includes:
- A biotechnology or pharmaceutical company; a medical device manufacturer; or a corporation, partnership, or other enterprise or entity significantly involved, directly or through subsidiaries, in the research, development, or manufacture of biotechnological, biostatistical, pharmaceutical, or medical devices, equipment, preparations, treatments, or products;
- Any organization a majority of whose members are described above; and
- Any other organization determined by the designated agency ethics official or, in consultation with the designated agency ethics official, by the NIH Director or the NIH Director’s designee that is substantially affected by the programs, policies, or operations of the NIH.

## Why must the HHS-716 be filed?

- The revised HHS Supplemental Standards of Ethical Conduct require certain NIH employees to file the HHS-716 (5 CFR 5501.109); and
- Filing provides the NIH with an opportunity to confirm no conflict between official duties and financial interests by reviewing the holdings of:
- NIH Senior employees, to also confirm that the holdings meet the regulatory requirement; and
- Other covered NIH employees.

## Who must file the HHS-716?

- All NIH employees who:
- File the Public Financial Disclosure Report (SF-278), or
- File the Confidential Financial Disclosure Report (OGE-450); or
- Are designated as “Clinical Investigators” regardless of whether they file a financial disclosure report. Clinical investigators are all employees listed on the cover page of the NIH form 1195 as of August 31, 2005 (excluding those individuals who are not FTEs).

## What are the limits for holdings?

- Non-Senior NIH employees and their spouses and minor children may hold financial interests in a substantially affected organization (SAO) without limit AS LONG AS THERE IS NO CONFLICT OF INTEREST WITH THE EMPLOYEE’S OFFICIAL DUTIES.
- Senior employees and their spouses and minor children generally may hold up to a total of $15,000 in a substantially affected organization (SAO), with certain exceptions.

## What is a conflict of interest?

- A conflict of interest exists when an employee has divided loyalty as defined by law, i.e., being in a situation where an official decision will affect a personal or imputed financial interest (financial interests of spouse, minor child, and other covered relationships).

## Conflict Examples

- An investigator on a drug trial holds stock in either the company supplying the drug or the company’s competitor.
- An investigator on a drug trial owns shares in a health sector mutual fund that focuses its investments in pharmaceutical companies.

## Conflict Examples, cont.

- An extramural program official’s spouse owns a small biotech company which is applying for a Small Business Innovation Research grant and  the grant is assigned to that program official.
- An extramural program official awards a contract to a company and he has stock options in that company’s competitor.

## How do I review the HHS-716?

- Supervisors (and in some cases the Principal Investigator) review those subordinates’ HHS-716 forwarded by the IC Ethics Office after a threshold determination by the DEC that a analysis under section 208 is required.
- Supervisors (and PIs) will NOT see values, only the names of the holdings.

## Employee’s Section of the Form

- Part III, Box 1

## Supervisory Review, cont.

- Supervisors will:
- examine the employee’s current official duties, and identify the outside organizations with which the employee works in an official capacity (the ‘party’);
- determine whether there are other organizations (i.e., competitors) which can also be affected by the employee’s current official duties (the ‘non-parties); and
- compare those affected outside organizations with the employee’s reported financial interests on the HHS-716, in Part III, Box 1.

## Example of Party vs. Non-Party	

- An employee is assigned to participate in a licensing agreement with Bristol Myers Squibb (BMS) (the party).  Merck and Amgen would be competitors to BMS (the non-parties) because they produce the same or a similar product.
- Ownership of BMS, Merck and/or Amgen stock may cause a conflict because the licensing agreement affects all of these companies.

## Supervisory Review, cont.

- For each financial interest or holding which matches or is related to an official responsibility, supervisor completes Part IV Supervisor Review, on pages 6-7 of the HHS-716:
- 1. Describe potential conflicts.
- 2. Document the evaluation of each potential conflict:
- a. Can the work be reassigned?
- b. What is the nature of the employee’s work?
- c. Would disqualification from the official duty matter affected by the financial interest materially impair employee’s ability to perform official duties?

## Supervisory Review, cont.

- Part IV Supervisor Review
- Box 1.  Description of Potential Conflicts: thoroughly describe each situation.

## Supervisory Review, cont.

- Part IV, Box 2. Three options for resolution:
- Box 2a.  Reassignment:  Can  potential conflicts be resolved by reassigning the matter that affects the employee’s financial interest to another employee? Thoroughly describe what can be reassigned.

## Supervisory Review, cont.

- Box 2b. Nature of Work Assignments. Does the matter that affects the employee’s financial interests involve significant duties of the employee’s position, or is the affected matter not a central or critical assignment for the employee?  Thoroughly describe assignments and the level of criticality.

## Supervisory Review, cont.

- Box 2c.  Material Impairment.  Would the employee be materially impaired from fulfilling important official duties if disqualified from the affected matter? Thoroughly describe importance of employee’s participation in the official work.

## Summary of What You Do

- Review employee’s official duties which involve or affect outside organizations.
- Compare outcome of above review to employee’s financial interests.
- Identify potential conflicts for each financial interest.
- Document your evaluation of each potential conflict in Part IV of the form.

## Finalize Your Review

- Sign and date the form where indicated at the bottom of page 7.
- Use page 12 for additional comments.
- Return the signed form to your IC Ethics Office.
- DO NOT keep a copy of the form.

## What Happens Next?

- The IC Deputy Ethics Counselor (DEC) will review your evaluation and indicate concurrence or non-concurrence below your signature, and will forward the report to the NIH Ethics Office (NEO).
- NEO Staff will review the suggested resolutions and prepare an evaluation for the NIH DEC (Part V, pages 8-9).

## Conflict Resolution, cont.

- Resolution options include:
- Total divestiture due to the conflict between financial interests and official duties, and the employee cannot be disqualified from the matter.
- Partial divestiture, to keep the value of the affected interests at or below the applicable regulatory *de minimis* level.  No disqualification necessary.
- Disqualification from some official matters.
- Waiver of the conflict when the Government’s interest in the employee’s involvement outweighs the conflict.
- No additional actions required.

## Ethics Staff Responsibilities

- Ethics Office staff may contact the supervisors when employees do not respond to requests for more information, so the supervisor can enforce the requirements.

## Is further reporting required?

- The HHS-716 will be used just this one time, for initial reporting.
- Any NIH employee covered by this reporting requirement must submit an HHS-717-1, Report of Prohibited Financial Interests for Employees of the NIH, within 30 days of acquiring a prohibited holding (e.g., gift, inheritance, purchase, marriage).
- Both of the above are separate from filing a financial disclosure report (SF-278/OGE-450).

## Is help available?

- Yes.  You may contact your IC Ethics Office staff for assistance in identifying conflicts. Names and contact information are available on the NIH Ethics Program web site:
- Deputy Ethics Counselors 	_[http://ethics.od.nih.gov/decs.htm](http://ethics.od.nih.gov/decs.htm)_
- Ethics Specialists 		_[http://ethics.od.nih.gov/coord.htm](http://ethics.od.nih.gov/coord.htm)_

## Additional Assistance

- Detailed procedures for reviewing the HHS-716 are available on the NIH Ethics Program Website at:
- 	_[http://ethics.od.nih.gov/topics/finandisc-oct05.htm](http://ethics.od.nih.gov/topics/finandisc-oct05.htm)_
- You may contact an Ethics Specialist in the NIH Ethics Office by calling:  301-402-6628

## Certificate

- <footer>

- <date/time>

-    You have now finished the Supervisor’s Training for Reviewing the HHS-716.  Print this certificate and send it to your _[IC Ethics Office](http://ethics.od.nih.gov/coord.htm)_.  [Click on File, then Print.  Chose “Print Current Slide” to print just this page.]
- Full Name _______________________________
- IC________  Division/Branch/Office___________