Department of Health and Human Services

OFFICE OF 

INSPECTOR GENERAL 

 

INSTITUTIONAL CONFLICTS OF 

INTEREST AT NIH GRANTEES 

 

Daniel R. Levinson 

Inspector General 

January 2011 

OEI-03-09-00480 
 

INTORDUCTION EXECUTIVE SUMMARY 

OBJECTIVES

1. To determine whether National Institutes of Health (NIH) 

grantee institutions have written policies and procedures to 

address institutional financial interests and conflicts of interest. 

2. To determine whether grantee institutions had financial 

interests and financial conflicts of interest related to NIH 

research grants in fiscal year (FY) 2008. 

BACKGROUND 

Grantee institutions consist of universities, medical schools, and other 

research institutions (e.g., private or nonprofit research organizations) 

receiving research grants from NIH. An institutional conflict may arise 

when an institution’s own financial interests (e.g., royalties, equity, 

stockholdings, and gifts) or those of its senior officials pose a risk of 

undue influence on decisions involving the institution’s research. 

Pursuant to Federal regulations, each grantee institution receiving NIH 

funds must have a written policy for identifying researchers’ financial 

conflicts of interest (hereinafter referred to as conflicts) and ensuring 

that conflicts are managed, reduced, or eliminated. These regulations 

do not apply to institutions’ conflicts. The Public Health Service (PHS) 

Act directed the establishment of regulations that would protect PHSfunded research (i.e., NIH grant research) from bias resulting from 

conflicts of both researchers and entities (i.e., grantee institutions). 

However, there are currently no Federal requirements to define, 

identify, report, and manage actual or potential institutional conflicts. 

Therefore, NIH lacks information on the number of institutional 

conflicts at its grantee institutions and the impact these conflicts may 

have on NIH-sponsored research. 

We surveyed 250 grantee institutions to determine whether they have 

any policies and procedures regarding institutional financial interests 

and conflicts. We requested information on any institutional financial 

interests related to NIH grants awarded in FY 2008. A total of 156 

grantee institutions responded, for a response rate of 62 percent. 

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EXECUTIVE SUMMARY 

FINDINGS 

Although not required for institutional financial interests, 70 of 

156 responding NIH grantee institutions have written policies and 

procedures addressing institutional interests. Fifty-nine of the 

seventy institutions use a variety of definitions for what constitutes an 

institutional financial interest. Policies and procedures for some 

institutions relate only to financial interests held by the institutions 

themselves, others consider the interests of both the institutions and 

their employees/officials, and still others relate only to the interests of 

institutional employees/officials. 

The number of definitions used by institutions for institutional financial 

interests ranged from one to eight. The average number of definitions 

was five. The three most common definitions are (1) an institutional 

official’s individual financial interests, (2) equity held by the institution 

in publicly held entities, and (3) equity held by the institution in 

nonpublicly held entities. 

Although not required for institutional conflicts, 69 of 

156 responding NIH grantee institutions have written policies and 

procedures addressing institutional conflicts. Fifty-nine of these 

institutions have defined, in writing, what constitutes an institutional 

conflict. These institutions typically defined institutional conflicts as 

financial interests that could affect the research, decisionmaking, 

loyalty, or objectivity of either the institution or individuals. 

Fifty-three of the sixty-nine institutions have implemented a process to 

determine whether an institutional financial interest creates an 

institutional conflict. Their processes generally involve notifying an 

institutional official and/or committee regarding the financial interests. 

The official and/or committee then determines whether the financial 

interest is an institutional conflict. 

Eighteen NIH grantee institutions identified 38 institutional conflicts. 

Twenty-one of one-hundred fifty-six institutions identified institutional 

financial interests. Of those, almost all identified the financial interests 

as institutional conflicts. Eighteen of the twenty-one institutions 

identified at least 38 institutional conflicts related to NIH research 

grants in FY 2008. Institutions that have written policies and 

procedures were more likely to identify conflicts (15 of 69 institutions) 

compared to those that do not (3 of 87 institutions). The most common 

type of institutional conflict was institutions’ holding equity in 

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EXECUTIVE SUMMARY 

nonpublicly held companies. For institutions that identified 

institutional conflicts, the strategy most often used to address them was 

disclosure.

RECOMMENDATION 

NIH is the primary Federal agency responsible for conducting and 

supporting medical research. It is vital to public health and safety that 

this research be free from bias. Federal regulations establish standards 

to ensure that the design, conduct, and reporting of federally funded 

research will not be biased by any conflicting financial interest of a 

researcher. Currently, no Federal regulations require grantee 

institutions to identify and report institutional conflicts to NIH. 

Therefore, NIH lacks information on the number of institutional 

conflicts that exist among its grantee institutions and the impact these 

conflicts may have on NIH-sponsored research. 

We continue to recommend that NIH require grantee institutions to 

identify, report, and address institutional conflicts in a consistent and 

uniform manner to NIH. It is important that NIH know of the existence 

of institutional conflicts so it can ensure that the related research is free 

from any intended or unintended bias. 

Therefore, we recommend that NIH: 

Promulgate regulations that address institutional financial conflicts 

of interest. Until regulations are promulgated, NIH should encourage 

grantee institutions to develop policies and procedures regarding 

institutional financial interests and conflicts.

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

NIH stated that it is reviewing public comments to finalize regulations 

regarding financial conflicts of interest and, therefore, it neither concurs 

nor nonconcurs with our recommendation. Instead, NIH stated it will 

take the Office of Inspector General’s (OIG) recommendation into 

consideration as it considers future actions on extramural financial 

conflicts of interest. 

OIG understands that NIH is engaged in the rulemaking process 

regarding financial conflicts of interest. However, in the 

May 21, 2010, Notice of Proposed Rulemaking regarding financial 

conflicts of interest, NIH proposed regulatory changes that focus only on 

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researchers’ conflicts. The proposed regulations do not address 

institutional conflicts. Therefore, OIG continues to recommend that 

NIH include institutional conflicts in regulations addressing financial 

conflicts of interest.
 TABLE OF CONTENTS 

EXECUTIVE SUMMARY .....................................i

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 

FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 

Although not required for institutional financial interests, 

70 of 156 responding NIH grantee institutions have written 

policies and procedures addressing institutional interests . . . . . . . 9 

Although not required for institutional conflicts, 69 of 

156 responding NIH grantee institutions have written policies 

and procedures addressing institutional conflicts . . . . . . . . . . . . . 11 

Eighteen NIH grantee institutions identified 38 institutional 

conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 

RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 

Agency Comments and Office of Inspector General Response . . . 18 

APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 

A: Results by Stratum for Grantee Institutions With Written 

Policies and Procedures Regarding Institutional Financial 

Interests and Institutional Conflicts . . . . . . . . . . . . . . . . . . . . . . . 20 

B: Number of Grantee Institutions That Reported Incorporating 

Recommended Actions From Departmental Guidance in Written 

Policies and Procedures Regarding Institutional Financial 

Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 

C: Methods Employed by Grantee Institutions To Manage, 

Reduce, or Eliminate Institutional Conflicts . . . . . . . . . . . . . . . . . 22 

D: Agency Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 

 

ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
 

 INTRODUCTION 

OBJECTIVES 

1. To determine whether National Institutes of Health (NIH) 

grantee institutions have written policies and procedures to 

address institutional financial interests and conflicts of interest. 

2. To determine whether grantee institutions had financial 

interests and financial conflicts of interest related to NIH 

research grants in fiscal year (FY) 2008. 

BACKGROUND 

Grantee institutions consist of universities, medical schools, and other 

research institutions (e.g., private or nonprofit research organizations) 

receiving research grants from NIH. Pursuant to Federal regulations, 

each institution receiving NIH funds must have a written policy for 

(1) identifying investigators’ (hereinafter referred to as researchers) 

financial conflicts of interest (hereinafter referred to as conflicts) and 

(2) ensuring that conflicts are managed, reduced, or eliminated.1, 2 The 

purpose of these regulations is to promote objectivity in research by 

establishing standards to ensure that there is no reasonable expectation 

that the design, conduct, or reporting of research funded under NIH 

grants will be biased by any conflicting financial interest of a 

researcher. 

Conflicts can also exist for the institutions themselves. An institution’s 

financial interests (e.g., royalties, equity, stockholdings, and gifts) or 

those of its senior officials can become institutional conflicts when the 

financial interests pose a risk of undue influence on decisions involving 

the institution’s research.3 There are no Federal regulations for 

defining, identifying, reporting, and managing institutional conflicts. 

Prior research has shown that not all medical schools have policies 

regarding institutional financial interests and conflicts.4 

1 42 CFR pt. 50, subpart F. This regulation covers Public Health Service (PHS) grants 

and NIH is the largest agency within PHS. 

2 The term “researcher” includes the principal researcher or any other person who is 

responsible for the design, conduct, or reporting of research funded by NIH. 

3 Institute of Medicine of the National Academies, Conflict of Interest in Medical 

Research, Education, and Practice, ch. 8, April 21, 2009. 

4 Ehringhaus, S., et al., “Responses of Medical Schools to Institutional Conflicts of 

Interest,” Journal of the American Medical Association, February 13, 2008.

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INTRODUCTION 

NIH Grants 

NIH is the primary Federal agency responsible for conducting and 

supporting medical research. Organized into 27 Institutes and Centers, 

NIH receives billions of dollars annually to support its mission. In 

FY 2010, NIH’s budget totaled over $31.2 billion. More than 80 percent 

of this amount was distributed through almost 50,000 competitive 

grants to more than 325,000 researchers at over 3,000 institutions 

across the country and around the world.5 

Impact of the Bayh-Dole Act 

In 1980, the Patent and Trademark Act Amendments (P.L. 96-517), 

commonly known as the Bayh-Dole Act, was enacted to facilitate the 

transfer of technology from grantee institutions to private industry. 

The Bayh-Dole Act has encouraged the commercialization of federally 

funded inventions but has also increased financial ties between grantee 

institutions and private industry. 

The Bayh-Dole Act allows grantee institutions to retain title to 

inventions developed through federally funded research. If institutions 

elect to retain title to inventions, they can license them to private 

businesses or companies. Companies can then develop these inventions 

into commercial products that benefit the public. These inventions have 

provided institutions with millions of dollars in royalties and equity.6 

Commercial products developed as a result of NIH-funded research 

include prescription drugs and other health care products. 

Requirements for Grantee Institutions Regarding Researcher Conflicts 

Federal regulation establishes standards to ensure that the design, 

conduct, or reporting of research funded under NIH grants will not be 

biased by researchers’ conflicts.7 Each institution receiving NIH funds 

must have a written policy for identifying researchers’ conflicts and 

ensuring that conflicts are identified, managed, reduced, or eliminated.8 

Each grantee institution must collect from each researcher a listing of 

his/her known significant financial interests that would reasonably 

2 

5 NIH budget information. Accessed at http://www.nih.gov/about/budget.htm on 

April 15, 2010. 

6 NIH Response to the Conference Report Request for a Plan to Ensure Taxpayers' 

Interests Are Protected, July 2001. Accessed at http://www.nih.gov/news/070101wyden.htm

on April 15, 2010. 

7 42 CFR pt. 50, subpart F. 

8 42 CFR § 50.604. 

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INTRODUCTION 

appear to be affected by the research. Federal regulation 

(42 CFR § 50.605(a)) provides that a conflict exists when a designated 

official at the institution reasonably determines that a researcher’s 

significant financial interest could directly and significantly affect the 

design, conduct, or reporting of NIH-funded research. If a researcher 

conflict exists, it must be reported to NIH. The institution must also 

manage, reduce, or eliminate the researcher conflict. 

Lack of Requirements for Grantee Institutions Regarding Institutional 

Conflicts 

For institutional financial interests, there are no Federal regulations for 

defining, identifying, reporting, or managing conflicts. Grantee 

institutions are not required to have policies that address either 

institutional financial interests or conflicts. However, section 493A of 

the PHS Act directed the Secretary of Health & Human Services (HHS) 

to establish regulations that would protect PHS-funded research (i.e., 

NIH grant research) from bias resulting from conflicts of both 

researchers and entities (i.e., grantee institutions).9 In the 

July 1995 final rule that promulgated Federal regulations for 

researchers’ conflicts (42 CFR pt. 50, subpart F), NIH stated that the 

issue of institutional conflicts would be considered separately from 

researchers’ conflicts. Currently, no Federal regulation addresses 

institutional conflicts. 

On May 8, 2009, NIH issued an Advance Notice of Proposed 

Rulemaking (ANPRM) to gain public input on whether modifications 

are needed to 42 CFR pt. 50, subpart F. NIH invited public comments 

on all aspects of potential regulation in this area, including broadening 

the regulations to address institutional conflicts.10 Taking public 

comments regarding the ANPRM into consideration, on May 21, 2010, 

NIH issued a Notice of Proposed Rulemaking (NPRM). In the NPRM, 

NIH proposed new requirements to strengthen the reporting and 

management of researcher conflicts. However, the regulations were not 

broadened to include institutional conflicts. NIH believed that further 

consideration was necessary before regulations could be formulated that 

would address institutional conflicts in the same comprehensive manner 

as the proposed regulations regarding researcher conflicts.11 

3 

9 The Secretary of HHS delegated authority to NIH to promulgate Federal regulations. 

10 74 Fed. Reg. 21610, 21612 (May 8, 2009). 

11 75 Fed. Reg. 28688, 28700 (May 21, 2010). 

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INTRODUCTION 

Recommendations From HHS Regarding Financial Interests Related to 

Human Subjects Research 

In a guidance document finalized in May 5, 2004, HHS’ Office for 

Human Research Protections recommended 12 actions for grantee 

institutions to consider when handling financial interests in research 

involving human subjects.12 Two of the recommended actions included 

(1) “establishing the independence of institutional responsibility for 

research activities from the management of the institution’s financial 

interests” and (2) “establishing policies regarding the types of financial 

relationships that may be held by parties involved in the research and 

circumstances under which those financial relationships and interests 

may or may not be held.” 

Recommendations From the Institute of Medicine Regarding Institutional 

Conflicts 

Institutional conflicts have prompted discussion and recommendations 

from industry and the research community. In an April 2009 report by 

the Institute of Medicine (IOM), the Committee on Conflict of Interest 

in Medical Research, Education, and Practice (Committee) presented 

challenges with managing institutional conflicts and provided 

recommendations to handle such challenges.13 

According to the Committee, institutional conflicts arise when an 

institution’s own financial interests pose risks of undue influence on 

decisions involving the institution’s primary interests. For example, 

conflicts may arise when an institution receives gifts or grants from 

companies to develop clinical practice guidelines related to the 

companies’ products.14 In addition, research conducted at the 

institution could affect the value of the institution’s patents or its equity 

positions or options in biotechnology, pharmaceutical, or medical device 

companies.15 

In addition, the IOM report highlighted that in an American Association 

of Medical Colleges’ survey of its members conducted in 2006, only 

38 percent of the respondents reported having a policy that applied to 

4 

12 HHS, Office for Human Research Protections, Financial Relationships and Interests in 

Research Involving Human Subjects: Guidance for Human Subject Protection. Accessed at 

http://www.hhs.gov/ohrp/humansubjects/finreltn/fguid.pdf on April 15, 2010. 

13 Institute of Medicine of the National Academies, loc. cit. 

14 A clinical practice guideline is a document that provides criteria regarding diagnosis, 

management, and treatment in specific areas of health care. 

15 Institute of Medicine of the National Academies, loc. cit. 

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INTRODUCTION 

their institutions’ financial interests, although another 37 percent 

reported that they were developing such a policy. 

The Committee directed recommendations to NIH and grantee 

institutions. The Committee recommended that NIH extend Federal 

regulations to cover institutional conflicts as well as researchers’ 

conflicts by developing rules governing institutional conflicts for grantee 

institutions. The Committee suggested that these rules require 

institutions to report identified institutional conflicts and the steps that 

have been taken to eliminate or manage such conflicts to NIH. 

The Committee recommended to institutions that the assessment of 

institutional conflicts fall to their governing boards (e.g., board of 

trustees). Specifically, the governing boards should establish standing 

committees on institutional conflicts that are composed of members 

without conflicts relevant to the activities of the institution and at least 

one member who is not a board member, an employee, or an officer of 

the institution. Such standing committees would be at a greater 

distance from the daily pressures of decisionmaking that senior officials 

face. They would also have access to comprehensive information about 

the finances of the institutions to better resolve disputes regarding 

conflicts. 

Related Studies by the Office of Inspector General 

In a January 2008 report, the Office of Inspector General (OIG) found 

that NIH relies on grantee institutions to ensure compliance with 

Federal financial conflict-of-interest regulations rather than directly 

overseeing or reviewing their management of researchers’ conflicts.16 

In a November 2009 report, OIG reviewed 184 financial 

conflict-of-interest reports for researchers that were received by NIH 

from grantee institutions during FY 2006.17 OIG found vulnerabilities 

in institutions’ identification, management, and oversight of conflicts. 

OIG also found vulnerabilities related to institutional financial 

interests. The potential for financial gain can pose an institutional 

conflict when an institution licenses technology/intellectual property for 

the purposes of commercialization. Therefore, one of our 

5 

16 HHS, OIG, National Institutes of Health: Conflicts of Interest in Extramural 

Research, OEI-03-06-00460, January 2008. 

17 HHS, OIG, How Grantees Manage Financial Conflicts of Interest in Research Funded 

by the National Institutes of Health, OEI-03-07-00700, November 2009. 

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INTRODUCTION 

recommendations called for NIH to develop regulations that address 

institutional conflicts. 

METHODOLOGY 

Sample Design 

We determined from a data file found on NIH’s Web site that 

2,648 grantee institutions received grant money in FY 2008.18 We 

excluded any institutions located outside the United States (we included 

all 50 States and the District of Columbia). We also excluded 

institutions that received only training grants.19 Finally, we excluded 

any institutions for which NIH’s data listed grant award amounts of $1 

or less.20 After the exclusions, we determined that 2,321 grantee 

institutions received research grants in FY 2008. 

We requested from NIH a list of financial conflict-of-interest reports for 

researchers submitted by grantee institutions during FY 2008. We 

asked for this information to ensure that we were including in our 

sample a representative number of those institutions that submitted 

reports for researchers to NIH. Based on the information provided by 

NIH, we determined that 64 institutions reported at least 1 researcher 

conflict to NIH in FY 2008 and 2,257 institutions did not report any 

conflicts. 

We selected a stratified random sample of 250 institutions to survey as 

shown in Table 1. Stratum 1 contains all of the institutions that 

reported at least one researcher conflict in FY 2008. Stratum 2 contains 

all of the institutions that did not report any researcher conflicts. 

 

18 NIH, Aggregate Data 2008. Accessed at 

http://report.nih.gov/award/trends/AggregateData.cfm?Year=2008 on August 5, 2009. 

19 Training grants are designed to support the research training of scientists for careers 

in the biomedical and behavioral sciences, as well as to help professional schools establish, 

expand, or improve programs of continuing professional education. 

20 After the initial exclusions, five institutions were listed in NIH’s file as having 

received $1 in grant awards. 

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INTRODUCTION 

 Table 1: Sample of Grantee Institutions 

Stratum Description of Stratum 

Number of 

Grantee 

Institutions in 

Population 

Number of 

Grantee 

Institutions in 

Sample 

Number of 

Grantee 

Institutions That 

Responded to 

Survey 

Response Rate 

1 

Grantee institutions 

that submitted a 

researcher financial 

conflict-of-interest 

report to NIH in 

FY 2008 

64 64 52 81% 

2 

Grantee institutions 

that did not submit a 

researcher financial 

conflict-of-interest 

report to NIH in 

FY 2008 

2,257 186 104 56% 

 Total 2,321 250 156 62% 

Source: OIG analysis of NIH data and OIG sample response rate, March 2010. 

We made at least three attempts by email to request responses from 

nonresponding grantee institutions. A total of 156 institutions 

responded, for an overall response rate of 62 percent. However, based 

on the overall response rate and the difference in response rates for 

Stratum 1 (81 percent) and Stratum 2 (56 percent), we did not project 

our findings to the population of 2,321 NIH grantee institutions. 

Instead, we have provided simple unweighted frequencies for our 

findings. Appendix A provides both overall totals and totals by stratum 

for the main findings in this report. 

Data Collection 

We collected our data between November 2009 and January 2010. We 

surveyed the sampled institutions to determine whether they have 

developed any policies and procedures regarding institutionally held 

financial interests and conflicts. We asked whether grantee institutions 

included in their policies and procedures any of the recommendations 

from HHS’ Office for Human Research Protections or IOM regarding 

institutionally held financial interests or conflicts. 

We asked the institutions whether they had institutional financial 

interests related to any NIH grants awarded in FY 2008. We requested 

information about whether the institutional financial interests were 

determined to be conflicts by institutions. We also asked for 

information on how these conflicts were addressed. 

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INTRODUCTION 

Data Analysis 

From the survey data, we determined the frequency of responses to 

closed-ended survey questions. We also reviewed and categorized 

responses to open-ended survey questions that were related to 

institutions’ definitions, policies, and procedures regarding 

institutionally held financial interests and institutional conflicts. For 

these analyses we have provided, when applicable, both the overall 

totals and totals for each stratum. 

Limitations 

Because of the overall 62-percent response rate and the large difference 

in response rates between the two strata, the data in our findings 

represent only the information for responding grantee institutions. It is 

possible that the data would have changed if the response rate had been 

higher, especially for Stratum 2 (grantee institutions that did not 

submit a researcher financial conflict-of-interest report to NIH in 

FY 2008). 

All of the information in the findings section of this report was 

self-reported by grantee institutions. We did not collect supporting 

documentation from them. 

Standards 

This study was conducted in accordance with the Quality Standards for 

Inspections approved by the Council of the Inspectors General on 

Integrity and Efficiency. 

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FINDINGS 

Although not required for institutional financial 

interests, 70 of 156 responding NIH grantee 

institutions have written policies and procedures 

addressing institutional interests 

 FINDINGS 

Grantee institutions can acquire 

financial interests related to 

NIH-funded research at their 

institutions. These financial 

interests can include royalties, 

equity, stockholdings, and corporate gifts. Currently, no Federal 

regulations require grantee institutions to have policies and procedures 

that address institutional financial interests. 

Seventy of the one hundred fifty-six grantee institutions that responded 

to our survey have written policies and procedures regarding 

institutional financial interests. Institutions that reported a researcher 

conflict to NIH in FY 2008 (Stratum 1) were more likely to have written 

policies and procedures. Table 2 shows the number of institutions with 

such written policies and procedures.

Table 2: Number of Grantee Institutions That Have Written Policies and 

Procedures Regarding Institutional Financial Interests 

 

Stratum Description of Stratum Number of Grantee 

Institutions 

Percentage of Respondents in 

Stratum With Written Policies 

and Procedures 

1 

(n=52) 

Grantee institutions that 

submitted a researcher 

financial conflict-of-interest 

report to NIH in FY 2008 

37 71% 

2 

(n=104) 

Grantee institutions that did 

not submit a researcher 

financial conflict-of-interest 

report to NIH in FY 2008 

33 32% 

 Total 70 45% 

 Source: OIG analysis of grantee institution survey responses, March 2010. 

Fifty-nine of the seventy grantee institutions with written policies and 

procedures regarding institutional financial interests have defined, in 

writing, what constitutes an institutional financial interest

The 59 institutions use a variety of specific definitions for what 

constitutes an institutional financial interest. Policies and procedures 

for some institutions relate only to financial interests held by the 

institutions themselves, others consider the interests of both the 

institutions and their employees/officials, and still others relate only to 

the interests of institutional employees/officials. 

The number of definitions used by institutions for institutional financial 

interests ranged from one to eight. The average number of definitions 

used by grantee institutions was five. The three most common 

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FINDINGS 

definitions were (1) an institutional official’s individual financial 

interests, (2) equity held by the institution in publicly held entities, and 

(3) equity held by the institution in nonpublicly held entities. Table 3 

shows the number of grantee institutions with written policies and 

procedures that use the different definitions of financial interests. 

Table 3: Number of Grantee Institutions With Written Policies and 

Procedures Using Various Definitions of Institutional Financial Interests 

10 

Institution Defined Financial 

Interest As:

Number of Grantee 

Institutions in 

Stratum 1 

Number of Grantee 

Institutions in 

Stratum 2 

Total Number of Grantee 

Institutions1 

Institutional officials’ individual 

financial interests 30 20 50 

Equity in publicly held 

companies 29 19 48 

Equity in nonpublicly held 

companies 

28 19 47 

Royalties resulting from 

federally funded research 

19 18 37 

Royalties resulting from 

nonfederally funded research 20 16 36 

Gifts from research sponsors 17 19 36 

Payments from research 

sponsors for reaching 

designated milestones in a 

course of a study 

12 18 30 

Other (e.g., intellectual 

property) 5 7 12 

Source: OIG analysis of grantee institution survey responses, March 2010. 

1

 The total number of institutions with a written definition of an institutional financial interest equals 59. The number of institutions 

in this column does not equal 59 because some institutions established more than 1 definition. 

Most of the 70 grantee institutions with written policies and procedures 

reported that they had incorporated recommendations from the HHS 

Guidance Document 

Sixty-two of the seventy institutions stated that they have incorporated 

recommendations from the HHS Guidance Document into their policies 

and procedures. The Guidance Document, issued by HHS’s Office of 

Human Research Protections, outlines 12 recommended actions that 

grantee institutions engaged in human subject research should consider 

to help ensure that financial interests do not compromise the rights and 

welfare of human research subjects. 

The most common recommendation that institutions reported including 

was establishing conflict-of-interest committees or identifying other 

bodies or persons and procedures to deal with individuals’ or 

institutional financial interests in research. The recommendation 

incorporated least often was to allow independent organizations to hold 

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FINDINGS 

or administer the institution’s financial interest. Appendix B contains 

the number of institutions that incorporated each recommendation. 

Although not required for institutional conflicts, 

69 of 156 responding NIH grantee institutions 

have written policies and procedures 

addressing institutional conflicts 

Institutional conflicts arise when 

a grantee institution’s own 

financial interests or those of its 

senior officials pose risks of undue 

influence on decisions involving 

the institution’s research.21 For 

example, an institutional conflict exists if the outcome of research 

conducted at a grantee institution could affect the value of the 

institution’s equity in a particular company. Currently, there are no 

Federal requirements that grantee institutions have policies and 

procedures to address institutional conflicts. 

Beyond policies and procedures to address institutional financial 

interests, grantee institutions also have policies and procedures 

specifying how to handle instances in which those interests pose an 

actual conflict with research activities. Sixty-nine institutions have 

written policies and procedures regarding institutional financial 

conflicts. A total of 78 institutions have not developed written policies 

and procedures for either institutional financial interests or conflicts.22 

Again, institutions that reported a researcher conflict to NIH in FY 

2008 (Stratum 1) were more likely to have written policies and 

procedures regarding institutional conflicts. Table 4 shows the number 

of institutions with written policies and procedures for institutional 

conflicts. 

11 

21 Institute of Medicine of the National Academies, loc. cit. 

22 Sixty-one grantee institutions have written policies and procedures for both 

institutional financial interests and conflicts, nine institutions have policies and procedures 

for only institutional financial interests, and eight institutions have policies and procedures 

for only institutional conflicts. 

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FINDINGS 

Table 4: Number of Grantee Institutions That Have Written Policies and 

Procedures Regarding Institutional Conflicts 

Stratum Description of Stratum Number of Grantee 

Institutions Percentage of Respondents 

1 

(n=52) 

Grantee institutions that 

submitted a researcher 

financial conflict-of-interest 

report to NIH in FY 2008 

37 71% 

2 

(n=104) 

Grantee institutions that did 

not submit a researcher 

financial conflict-of-interest 

report to NIH in FY 2008 

32 31% 

 Total 69 44% 

 Source: OIG analysis of grantee institution survey responses, March 2010. 

Fifty-nine of the sixty-nine grantee institutions with written policies and 

procedures regarding institutional conflicts have defined, in writing, what 

constitutes an institutional conflict 

The 59 institutions typically defined institutional conflicts as financial 

interests that could affect the research, decisionmaking, loyalty, or 

objectivity of either the institution or individuals. Some institutions 

determined that institutional conflicts exist when financial interests are 

of a certain type or reach a certain threshold amount (e.g., $100,000 or 

5-percent equity holding). 

Fifty-three of the sixty-nine grantee institutions with written policies and 

procedures have implemented a process to determine whether an 

institutional financial interest creates an institutional conflict 

These 53 institutions’ processes generally involved notifying an 

institutional official and/or committee regarding the financial interests. 

The official and/or committee then determines whether the financial 

interest is an institutional conflict. Some of these officials/committees 

also review institutional equity holdings and/or license/royalty 

agreements to determine whether they are institutional conflicts. 

Forty of the sixty-nine grantee institutions with written policies and 

procedures regarding institutional conflicts have a committee that reviews 

institutional conflicts 

All of the committees among these 40 grantee institutions have the 

authority to determine whether institutional financial interests are 

institutional conflicts. All but two of the committees have the additional 

authority to determine how the conflicts will be addressed. Nineteen of 

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FINDINGS 

these committees are separate entities from the committees responsible 

for reviewing researchers’ conflicts at the institutions. 

In its April 2009 report, IOM recommended that grantee institutions 

handle challenges in managing institutional conflicts by implementing 

standing committees to assess the conflicts. As recommended by IOM, 

15 of the 69 institutions have boards of trustees (or an equivalent 

governing body) that have established their own standing committees 

on institutional conflicts. Seven institutions also have at least one 

outside member of their committees who is not a board member, an 

employee, or an officer of the institutions. Five of these committees 

submit annual reports to the boards of trustees regarding institutional 

conflicts, which are made public. 

Twenty-one of one hundred 

fifty-six grantee institutions 

identified institutional 

financial interests. Almost all of those 21 identified the financial 

interests as institutional conflicts. 

Eighteen NIH grantee institutions identified 

38 institutional conflicts 

Eighteen of the twenty-one institutions identified at least 

38 institutional conflicts related to NIH research grants in FY 2008.23 

The remaining three institutions that identified financial interests did 

not determine them to be conflicts. Of the 18 grantee institutions that 

identified institutional conflicts, 15 had written policies and procedures 

regarding institutional conflicts. The remaining three institutions did 

not have written policies and procedures. Therefore, our findings show 

that institutions with written policies and procedures were more likely 

to identify conflicts (15 of 69 institutions) than those without written 

policies and procedures (3 of 87 institutions). Table 5 shows the number 

of institutions per stratum that identified conflicts. 

13 

23 Three of the eighteen grantee institutions reported that they had at least one 

institutional conflict, but could not provide a specific number. 

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FINDINGS 

Table 5: Number of Grantee Institutions That Reported Identifying 

Institutional Conflicts

Stratum Description of Stratum 

Number of Grantee 

Institutions With 

Institutional Conflicts 

Number of These Grantee 

Institutions With Written 

Policies and Procedures 

1 

Grantee institutions that 

submitted a researcher 

financial conflict-of-interest 

report to NIH in FY 2008 

14 13 

2 

Grantee institutions that did 

not submit a researcher 

financial conflict-of-interest 

report to NIH in FY 2008 

4 2 

 Total 18 15 

 Source: OIG analysis of grantee institution survey responses, March 2010. 

Grantee institutions tended to have the same conflicts as their 

researchers. This is important because, in essence, institutions are 

overseeing researchers’ conflicts when they themselves have the same 

potential conflict. At 17 of the 18 institutions, researchers who worked 

on the grant(s) had the same types of conflict(s) as the institutions. For 

example, at one institution, both the institution and the researcher held 

equity in the same nonpublicly held company. 

The most common type of institutional conflict was grantee institutions’ 

holding equity in nonpublicly held companies 

The 18 institutions that had institutional conflicts identified different 

types of conflicts. The two most common types were holding equity in 

nonpublicly held companies and receiving royalties resulting from 

federally funded research. Table 6 shows the types of institutional 

conflicts per stratum that were reported by institutions in FY 2008 and 

the number of institutions reporting each type. 

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FINDINGS 

Table 6: Number of Grantee Institutions With Different Types of 

Institutional Conflicts Reported Between October 1, 2007, and 

September 30, 2008

15 

Type of Institutional Conflicts

Number of Grantee 

Institutions in Stratum 1 

Reporting Type of 

Conflict 

Number of Grantee 

Institutions in Stratum 2 

Reporting Type of 

Conflict 

Total Number of 

Grantee Institutions 

Reporting Type of 

Conflict1

Equity in nonpublicly held 

companies 

9 2 11 

Royalties resulting from 

federally funded research 

8 2 10 

Institutional officials’ individual 

financial interests 4 1 5 

Royalties resulting from 

nonfederally funded research 3 0 3 

Equity in publicly held 

companies 2 0 2 

Unspecified royalties 1 0 1 

Not specified/other 1 1 2 

Source: OIG analysis of grantee institution survey responses, March 2010. 

1

 Eighteen institutions identified thirty-eight institutional conflicts. The number of institutions in this column does not equal 

18 because some institutions had more than 1 type of conflict. The number of conflicts in the column does not equal 38 

because, for example, some institutions reported that a conflict involved both equity and royalties. 

Grantee institutions reported having various strategies available to address 

their institutional conflicts 

Pursuant to Federal regulation, grantee institutions must ensure that 

researchers’ conflicts will be managed, reduced, or eliminated. 

Although no such requirement exists for addressing institutional 

conflicts, 98 of 156 institutions reported that they had strategies to 

ensure that institutional conflicts do not bias research. The five most 

commonly reported strategies were (1) ensuring an open exchange of 

research results through publication and/or presentations, (2) disclosing 

the institutional conflict during the informed consent process for human 

subjects, (3) formally recusing the official who has a conflict from the 

chain of authority over the project and communicating the recusal to the 

official’s superior and colleagues, (4) notifying the Institutional Review 

Board24 regarding the institutional conflict, and (5) ensuring that 

adequate peer review of research is performed by the institution. 

Appendix C contains the number of institutions per stratum that use 

these and other strategies. 

24 Institutional review boards ensure the rights and safety of people participating in 

clinical trials. 

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FINDINGS 

Grantee institutions that identified institutional conflicts most often used 

disclosure to address them 

For the 18 institutions that identified institutional conflicts, the 

2 methods most often used to address conflicts were (1) disclosing them 

during the informed consent process for research involving human 

subjects and (2) notifying the Institutional Review Board regarding the 

conflicts. The next two strategies most commonly used were disclosing 

the institutional conflicts in public presentations and publications and 

ensuring that adequate peer review of research was performed by the 

institution. 

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INTORDUCTION RECOMMENDATION 

NIH is the primary Federal agency responsible for conducting and 

supporting medical research. It is vital to public health and safety that 

this research be free from bias. Federal regulations establish standards 

to ensure that the design, conduct, and reporting of federally funded 

research will not be biased by a researcher’s conflict. The PHS Act 

directed the establishment of regulations that would protect 

PHS-funded research (i.e., NIH grant research) from bias resulting from 

conflicts of both researchers and entities (i.e., grantee institutions). 

However, there are currently no Federal requirements to identify and 

report institutional conflicts to NIH. Therefore, NIH lacks information 

on the number of institutional conflicts that exist among its grantee 

institutions and the impact these conflicts may have on NIH-sponsored 

research. 

Our review shows that institutional conflicts do exist at grantee 

institutions. Eighteen of the one hundred fifty-six institutions that 

responded to our survey identified institutional conflicts related to their 

NIH grants in FY 2008. We found that the institutions with written 

policies and procedures regarding institutional conflicts were more 

likely to identify conflicts. However, because half of the responding 

institutions have no written policies and procedures, it is impossible to 

know how many additional institutions would have identified 

institutional conflicts if they had policies and procedures. 

Even institutions with polices and procedures differed in how they 

defined and addressed institutional financial interests and conflicts 

related to research. Therefore, we continue to recommend that NIH 

require institutions to identify, report, and address institutional 

conflicts in a consistent and uniform manner. It is important that NIH 

know of the existence of institutional conflicts so it can ensure that 

research is free from any intended or unintended bias. 

Therefore, as in our previous report, we recommend that NIH: 

Promulgate regulations that address institutional financial conflicts of 

interest 

We recommend that the regulations include the following: 

 the definition of an institutional financial conflict of interest; 

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RECOMMENDATION 

 a requirement that grantee institutions have written policies 

regarding the identification and oversight of institutional 

financial conflicts of interest; 

 the elements required in an institution’s policy regarding 

institutional financial conflicts of interest (such as the 

identification and management of conflicts); 

 a requirement that institutions report institutional conflicts to 

NIH, including reporting the details regarding the nature and 

management of such conflicts; these details should include the 

value of the financial interest, a description of how the financial 

interest relates to the research, a description of how the 

institutional conflict will be managed, and a description of how 

the management of the institutional conflict will ensure 

objectivity in the research; and 

 guidance on how institutional conflicts should be identified, 

managed, reduced, or eliminated. 

Until regulations are promulgated, NIH should encourage grantee 

institutions to develop policies and procedures regarding institutional 

financial interests and conflicts. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

NIH agreed that institutional conflict of interest is a significant and 

timely topic worthy of serious consideration. NIH stated that it is 

reviewing public comments to finalize regulations regarding financial 

conflicts of interest and, therefore, it neither concurs nor nonconcurs 

with our recommendation. Instead, NIH stated it will take OIG’s 

recommendation into consideration as it considers future actions on 

extramural financial conflicts of interest. NIH also made several 

technical comments on the report, and OIG has made changes to the 

report based on these comments where appropriate. 

OIG understands that NIH is engaged in the rulemaking process 

regarding financial conflicts of interest. However, in the 

May 21, 2010, Notice of Proposed Rulemaking regarding financial 

conflicts of interest, NIH proposed regulatory changes that focus only on 

researchers’ conflicts. The proposed regulations do not address 

institutional conflicts. Therefore, OIG continues to recommend that 

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RECOMMENDATION 

NIH include institutional conflicts in regulations addressing financial 

conflicts of interest. The full text of NIH’s comments is provided in 

Appendix D. 
 

Table A-1: Results by Stratum for Grantee Institutions With Written Policies and 

Procedures Regarding Institutional Financial Interests and Institutional Conflicts 

 APPENDIX~A 

Number of Grantee 

Institutions in Stratum 1 

Number of Grantee 

Institutions in Stratum 2 

Total Number of Grantee 

Institutions

Number of grantee institutions that have written policies 

and procedures regarding institutional financial interests 37 33 70 

Number of institutions that have defined, in 

writing, what constitutes an institutional financial 

interest 

32 27 59 

Number of grantee institutions that have written policies 

and procedures regarding institutional conflicts 37 32 69 

Number of institutions that have defined, in 

writing, what constitutes an institutional conflict 35 24 59 

Number of institutions that have implemented a 

process to determine whether an institutional 

financial interest creates an institutional conflict 

31 22 53 

Number of institutions that have a committee that 

reviews institutional conflicts 

26 14 40 

Number of institutions whose committees have 

the authority to determine whether institutional 

financial interests are institutional conflicts 

26 14 40 

Number of institutions whose committees have 

the authority to determine how institutional 

conflicts will be addressed 

24 14 38 

Number of institutions whose committees are 

separate entities from the committees responsible 

for reviewing researchers’ conflicts 

12 7 19 

Number of institutions whose boards of trustees 

(or equivalent governing bodies) have also 

established their own standing committees on 

institutional conflicts as recommended by the 

Institute of Medicine 

9 6 15 

 Source: Office of Inspector General analysis of grantee institution survey responses, March 2010. 

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Table B-1: Number of Grantee Institutions That Reported Incorporating 

Recommended Actions From Departmental Guidance in Written Policies and 

Procedures Regarding Institutional Financial Interests

 APPENDIX~B 

Recommendation Number of Grantee 

Institutions in Stratum 1 

Number of Grantee 

Institutions in Stratum 2 

Total Number of Grantee 

Institutions1 

Establish conflict-of-interest committees or identify other 

bodies or persons and procedures to deal with individual 

or institutional financial interests in research or verify the 

absence of such interests and address institutional 

financial interests in research 

35 20 55 

Establish criteria to determine what constitutes an 

institutional financial conflict, including identifying 

leadership positions for which the individual’s financial 

interests are such that they may need to be treated as 

institutional financial interests 

32 20 52 

Determine whether particular individuals should report 

financial interests to the conflict-of-interest committee 

(individuals could include Institutional Review Board 

members and staff, appropriate officials of the 

institutions, and researchers) 

34 17 51 

Establish policies on providing information, 

recommendations, or findings from conflict-of-interest 

committee deliberations to Institutional Review Boards 

29 16 45 

Establish the independence of institutional responsibility 

for research activities from the management of the 

institution’s financial interests 

26 17 43 

Establish policies regarding the types of financial 

relationships that may be held by parties involved in the 

research and circumstances under which those 

relationships and interests may or may not be held 

25 18 43 

Establish clear channels of communication between 

conflict-of-interest committees and Institutional Review 

Boards 

29 13 42 

Establish measures to foster the independence of 

Institutional Review Boards and conflict-of-interest 

committees 

28 14 42 

Establish procedures for disclosures of institutional 

financial relationships to conflict-of-interest committees 25 16 41 

Provide training to appropriate individuals regarding 

financial interest requirements 27 11 38 

Include individuals from outside the institution in the 

review and oversight of financial interests in research 23 10 33 

Use independent organizations to hold or administer the 

institution’s financial interest 12 4 16 

 Source: Office of Inspector General analysis of grantee institution survey responses, March 2010. 1 The total number of institutions that reported incorporating recommendations equals 62. The number of institutions in this column does not equal 62 because some 

institutions incorporated more than 1 recommendation. 

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 APPENDIX~C 

Table C-1: Methods Employed by Grantee Institutions To Manage, Reduce, or 

Eliminate Institutional Conflicts 

Methods Number of Grantee 

Institutions In Stratum 1 

Number of Grantee 

Institutions in Stratum 2 

Number of Grantee 

Institutions 1

Ensuring open exchange of research results through 

publications and/or presentations 30 40 70 

Disclosure of institutional conflicts during the informed 

consent process for research subjects 

31 24 55 

Where the institutional conflict involves senior officials, 

formal recusal of the conflicted officials from the chain of 

authority over the research and communication of the 

recusal arrangement to the officials’ superiors and 

colleagues 

37 17 54 

Notification of the Institutional Review Boards regarding 

institutional conflicts 31 22 53 

Ensuring that adequate peer review of research is 

performed by the institution 18 34 52 

Disclosure of the institutional conflicts in public 

presentations and publications 

25 25 50 

Where the institutional conflict involves a senior official, 

designation of a “safe haven” (e.g., a nonconflicted senior 

individual) with whom researchers can address 

institutional-conflict-related concerns 

32 15 47 

Monitoring the use of institution facilities or prohibiting the 

use of institution facilities/resources to further the interests 

of companies connected to institutional conflicts 

24 19 43 

Ensuring that no technology/intellectual property is 

inappropriately shared with companies connected to 

institutional conflicts 

19 23 42 

External monitoring of research studies 20 19 39 

Prohibiting outside companies related to institutional 

conflicts from sponsoring research associated with the 

conflicts or requiring approval for outside companies to 

sponsor research 

17 17 34 

Preapproving/overseeing purchases of goods/services from 

companies connected to institutional conflicts 17 16 33 

Elimination of the institutional conflict 18 15 33 

Disclosure of the institutional conflicts to other researchers 

and/or centers in a multicenter trial 11 10 21 

Additional internal monitoring of research studies 3 0 3 

Prohibiting clinical research at the grantee institutions 2 0 2 

 Source: Office of Inspector General analysis of grantee institution survey responses, March 2010. 1 The total number of institutions equals 156. The number of institutions in this column does not equal 156 because some institutions use more than 1 method for 

managing, reducing, and/or eliminating institutional conflicts. 

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A P PEN 0 x o 

Agency Comments 

DEPARTMENT OF HEALTH &. HUMAN SERVICES 	 Public Health Servic.e 

National Institutes of Health 

Bethesda. Maryland 20892 , 

NOV 2 201D 

TO: 	 Stuart Wright 

Deputy Inspector General for Inspection and Evaluations, HHS 

FROM: 	 Director, NIH 

SUBJECT: 	 National Institutes of Health Comments on the Draft Office oflnspector 

General Report: Institutional Conflicts ofInterest at NIH Grantees 

(OEI-03-09-0048'O) . . 

Attached are our general and technical comments on the draft Office ofInspector General 

report, entitled Institutional Conflicts ofInterest at NIH Grantees (OEI-03-09-00480). 

We appreciate the opportunity to review and comment on this important topic. Should you 

have questions or concerns regarding our comments, please contact Mary Anne Mazzarino 

in the Office of Management Assessment at 301·496·2461. 

Francis S. Collins, M.D., Ph.D. 

Attachments 

OEI·03·09·00480 INSTITUTIONAL CONFLICTS OF INTEREST AT NIH GRANTEES 23 
 

APPENDIX ~ D 

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 ACKNOWLEDGMENTS 

This report was prepared under the direction of Robert A. Vito, Regional 

Inspector General for Evaluation and Inspections in the Philadelphia 

regional office, and Linda M. Ragone, Deputy Regional Inspector 

General. 

Tanaz Dutia served as the team leader for this study. Other principal 

Office of Evaluation and Inspections staff from the Philadelphia 

regional office who contributed to the report include Emily Multari; 

central office staff who contributed include Heather Barton. 
Office of Inspector General 

http://oig.hhs.gov 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 

amended, is to protect the integrity of the Department of Health and Human Services 

(HHS) programs, as well as the health and welfare of beneficiaries served by those 

programs. This statutory mission is carried out through a nationwide network of audits, 

investigations, and inspections conducted by the following operating components: 

Office of Audit Services 

The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 

audits with its own audit resources or by overseeing audit work done by others. Audits 

examine the performance of HHS programs and/or its grantees and contractors in carrying 

out their respective responsibilities and are intended to provide independent assessments of 

HHS programs and operations. These assessments help reduce waste, abuse, and 

mismanagement and promote economy and efficiency throughout HHS. 

Office of Evaluation and Inspections 

The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 

HHS, Congress, and the public with timely, useful, and reliable information on significant 

issues. These evaluations focus on preventing fraud, waste, or abuse and promoting 

economy, efficiency, and effectiveness of departmental programs. To promote impact, OEI 

reports also present practical recommendations for improving program operations. 

Office of Investigations 

The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 

of fraud and misconduct related to HHS programs, operations, and beneficiaries. With 

investigators working in all 50 States and the District of Columbia, OI utilizes its resources 

by actively coordinating with the Department of Justice and other Federal, State, and local 

law enforcement authorities. The investigative efforts of OI often lead to criminal 

convictions, administrative sanctions, and/or civil monetary penalties. 

Office of Counsel to the Inspector General 

The Office of Counsel to the Inspector General (OCIG) provides general legal services to 

OIG, rendering advice and opinions on HHS programs and operations and providing all 

legal support for OIG’s internal operations. OCIG represents OIG in all civil and 

administrative fraud and abuse cases involving HHS programs, including False Claims Act, 

program exclusion, and civil monetary penalty cases. In connection with these cases, OCIG 

also negotiates and monitors corporate integrity agreements. OCIG renders advisory 

opinions, issues compliance program guidance, publishes fraud alerts, and provides other 

guidance to the health care industry concerning the anti-kickback statute and other OIG 

enforcement authorities.