Federal Research: NIH and EPA Need to Improve Conflict of Interest Reviews for Research Arrangements with Private Sector Entities
Published: 2005-02-25T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: An institute at the National Institutes of Health (NIH) and an office in the Environmental Protection Agency (EPA) entered into collaborative arrangements with the American Chemistry Council (ACC) to support research on the health effects of chemical exposures. NIH accepted a gift from ACC to help fund the research. EPA and ACC funded their proposals separately. The arrangements raised concerns about the potential for ACC to influence research that could affect the chemical industry. GAO determined the agencies' legal authorities to enter into the arrangements; the extent to which the agencies evaluated and managed potential conflicts of interest resulting from these arrangements; the extent to which the NIH institute complied with NIH's gift acceptance policy; and the extent to which NIH, EPA, and other agencies have similar arrangements.
section_title: What GAO Found
paragraphs: NIH's National Institute of Environmental Health Sciences (NIEHS) used the authorities granted to NIH's institutes and centers under sections of the Public Health Service Act to enter into its arrangement with ACC. Similarly, EPA's Office of Research and Development (ORD) relied on authorities granted to EPA under sections of the Clean Air Act, the Clean Water Act, and the Solid Waste Disposal Act to enter into its research arrangement. Nothing in these statutes appears to prohibit either agency from entering into research arrangements with nonprofit organizations such as ACC. NIEHS and ORD did not formally evaluate the potential for conflicts of interest with ACC before they entered into the arrangements, but both agencies took steps to manage the potential as the arrangements were implemented. NIH and EPA had no specific policies requiring officials to evaluate or manage potential conflicts of interest when they entered into the ACC arrangements, nor do they currently have such policies. Although no formal evaluation occurred, agency officials managed the arrangements through their existing research management processes. Both agencies believe these actions helped mitigate the potential for undue influence by ACC and adequately protected the integrity of the scientific research conducted under the arrangements. Because the agencies' research management processes were not designed to address conflict of interest issues they are not a substitute for a formal evaluation of such conflicts. Without policies requiring a formal evaluation and management of conflicts, there is no assurance that similar arrangements will be appropriately evaluated and managed for such conflicts in the future. NIEHS officials complied with portions of NIH's gift acceptance policy that guide the acknowledgement and administration of gifts. However, the policy's guidance on evaluating and managing potential conflicts is extremely broad, and it lacks clarity and consistency. As a result, the policy gives officials wide discretion in this area. In addition, the policy does not require the agency to document the basis for its decisions. Consequently, the policy does not provide sufficient assurance that potential conflicts of interest between NIH and donor organizations will be appropriately considered. While some institutes and centers at NIH had arrangements somewhat similar to the ACC arrangements, GAO did not find any similar arrangements at other program offices at EPA or at the Food and Drug Administration and the Federal Aviation Administration--two other agencies with significant research budgets. None of the nine research arrangements GAO found at NIH institutes and centers involve organizations that represent industry in the same direct manner that ACC represents the chemical industry.

section_title: Letter
paragraphs: In fiscal year 2002, the federal government devoted an estimated $45 billion  to research, $35 billion of which funded research conducted by  universities, industry, nonprofit organizations and state and local  governments. Some agencies fund this extramural research through direct  federal grants to or contracts with researchers, which are generally  considered an effective way to encourage federal and nonfederal research  partnerships. Other agencies collaborate with governmental and  nongovernmental organizations to solicit and/or fund extramural research  proposals, and in some cases have the authority to accept money from their  partners to support the research. These collaborative arrangements have  taken the form of cooperative agreements or memorandums of  understanding with external research partners. The American Chemistry  Council (ACC)—a nonprofit organization that represents the chemical  industry—has entered into two such research arrangements; one with the  National Institute of Environmental Health Sciences (NIEHS) in the  National Institutes of Health (NIH), and the other with the Office of  Research and Development (ORD) in the Environmental Protection Agency  (EPA). Since ACC represents chemical companies that are regulated by the  federal government, these arrangements have raised concerns that ACC or its members could potentially influence, or appear to influence, the  scientific results that may be used to make future regulatory decisions.
In 2001, ACC entered into an arrangement with NIEHS to solicit and fund  research on the effects of environmental chemicals on human reproduction  and development. Under the arrangement, NIEHS, which has authority to  accept gifts from external organizations, accepted funds from ACC to  support the research. In 2003, ACC entered into a similar arrangement  with ORD to solicit and fund research; under this arrangement the first  solicitation for research proposals focused on novel approaches to  analyzing existing data on human exposure to chemicals. In the absence of  authority allowing EPA to accept gifts, ORD and ACC solicited proposals  jointly but funded selected research proposals separately. A goal of both  research arrangements is to provide scientific tools or knowledge that will  ultimately help improve the effectiveness of human health and ecological  risk assessments.
In the context of these two arrangements, you asked us to determine the  (1) legal authority NIEHS and ORD used to enter into the arrangements  with ACC; (2) extent to which NIEHS and ORD evaluated and managed the  possibility that conflicts of interest could result from their arrangements  with ACC; (3) extent to which NIEHS complied with NIH’s gift acceptance  policy when accepting ACC’s funds; and (4) extent to which similar  research arrangements exist within other offices and programs of NIH and  EPA, as well as other regulatory agencies.
To identify the legal authority each agency used to enter into collaborative  research arrangements with ACC, we reviewed the authorities cited in each  agency’s arrangement, as well as the related legislative histories and  policies at NIH and EPA. We also interviewed program and legal staff at the  agencies. To ascertain the extent to which NIEHS and ORD evaluated and  managed the potential that conflicts of interest could result from their  research arrangements with ACC, we reviewed agency policy and  documents relevant to the ACC arrangements and interviewed senior  officials. To determine the extent to which NIEHS complied with the NIH  gift acceptance policy, we reviewed the policy and related documentation  and interviewed senior NIEHS officials and NIH legal advisors. To  determine the prevalence of similar research arrangements, we  interviewed officials within NIH and EPA. In addition, we contacted  officials at the Food and Drug Administration (FDA) and the Federal  Aviation Administration (FAA), both of which, like EPA, are regulatory  agencies that have significant extramural research budgets. We interviewed  officials responsible for 96 percent or more of each agency’s extramural  research dollars and reviewed research arrangements that have been  signed since January 1999. We conducted our review from March 2004  through February 2005 in accordance with generally accepted government  auditing standards. The details of our scope and methods can be found in  appendix I.
subsections: section_title: Background
paragraphs: Many federal agencies fund research to serve their goals and objectives.  For example, NIH, the largest source of federal support for nondefense  research, is the federal focal point for medical and behavioral research to  help extend healthy life and reduce illness and disability. Each of the 27  institutes and centers that constitute NIH has an explicit mission focused  on a particular disease, organ system, stage of development, or a cross- cutting mission, such as developing research tools. Other agencies, such as  EPA, FDA, and FAA, support research, in part, to further scientific  understanding that may in the future better inform their regulatory  decisions. Nineteen offices within EPA conduct and/or support research to  help carry out the regulatory aspect of the agency’s mission to protect  human health and the environment and to implement environmental laws.  Similarly, FDA relies on research to help identify and assess risks and to  serve as the basis for regulatory decisions about such issues as human and  veterinary drugs, medical devices, and the nation’s food supply. Finally,  FAA, which enforces regulations and standards for the manufacture,  operation, and maintenance of aircraft, conducts research to help ensure a  safe and efficient system of air navigation and air traffic control.
Federal research can be conducted by scientists in government  laboratories—called intramural research—or by scientists at universities,  in industry, or at nonprofit organizations—called extramural research. In  fiscal year 2002, NIH, EPA, FDA, and FAA devoted a total of about $23  billion to intramural and extramural research. (See fig. 1.) Together, these  four agencies accounted for about 50 percent of the federal funds devoted  to research.
Federal laws have created an environment conducive to a full range of joint  ventures between government and industry, or between industry and  universities, as well as among companies. Specifically, through  collaboration, federal and nonfederal partners attempt to share the costs,  risks, facilities, and expertise needed for research and to promote the  movement of ideas and technologies between the public and private  sectors. This cooperation between federal and private sector researchers  may take many forms. Through informal cooperation, for example, federal  agencies and industry may coordinate and share research agendas to  prevent duplication of effort, or agency and private sector scientists may  consult one another. Through formal cooperation, federal and nonfederal  partners use written agreements, such as contracts or memorandums of  understanding, to define the roles and responsibilities of each party.  However, each type of arrangement differs in the extent of federal  involvement in the research conducted under the agreement. Generally,  work conducted under contracts is directed and overseen by federal  agencies that do not participate in the work. In contrast, memorandums of  understanding allow great flexibility in terms of participation by federal  agencies and may also allow for sharing of resources or the funding of  research by nonfederal partners.
Congress may provide federal agencies the authority to accept gifts from  external sources. For example, under the Public Health Service Act, certain  agencies, such as NIH, may accept funds or nonmonetary gifts to support  their research efforts or other agency functions. Under the act, donors may  stipulate how agencies may use their gifts, for example, to only support  research on a specific disease or condition, or they may allow the agency to  use the gift for the benefit of any effort without stipulations. An agency’s  statutory authority to accept donations is called its “gift acceptance  authority.”
In 2001 and 2003, NIEHS and ORD, respectively, entered into research  arrangements with ACC to solicit and fund extramural research proposals.  These arrangements specified how research proposals would be solicited,  reviewed, funded, and overseen. Specifically, under the NIEHS-ACC  arrangement, ACC and NIEHS agreed to support a 3-year research program  to study the effects on reproduction and development of exposure to  chemicals in the environment. ACC provided a gift of $1.05 million to  NIEHS to fund this research, and NIEHS contributed $3.75 million to the  project. Using the combined funds, NIEHS awarded a total of 17 research  proposals from among the 52 it received. The program ended in 2004.  Under the ORD-ACC arrangement, ACC and ORD agreed to support and  fund research, with the first solicitation for research proposals focusing on  novel approaches to analyzing existing human exposure data. In response  to this first announcement of funding availability, issued in July 2003, 36  research proposals were submitted. ORD funded four research proposals,  for a total of about $1.7 million, and ACC funded two proposals, for a total  of about $1 million. ORD and ACC separately funded the research  proposals that each had selected under this arrangement because EPA does  not have the authority to accept contributions from outside sources.  Researchers could specify whether they wanted their proposals considered  for funding solely by ORD or by either ORD or ACC.
ACC is a nonprofit trade organization representing most major U.S.  chemical companies. It represents the chemical industry on public policy  issues, coordinates the industry’s research and testing programs, and leads  the industry’s initiative to improve participating companies’ environmental,  health, and safety performance. In 1999, ACC launched a $100 million  research initiative to study the potential impacts of chemicals on human  health and the environment and to help improve screening and testing  methods. A primary goal of the initiative is to focus on projects or  programs that might take advantage of work planned or conducted by EPA,  NIEHS, and other laboratories to stimulate collaboration and/or to prevent  unnecessary duplication.
Individuals or organizations can have conflicts of interest that arise from  their business or financial relationships. Typically, federal conflict-of- interest laws and regulations govern the actions of individual federal  employees, including their financial interests in, and business or other  relationships with, nonfederal organizations. Conflict-of-interest concerns  about individual federal employees typically arise when employees receive  compensation from outside organizations; such arrangements often require  prior approval from the federal employer. When a federal agency enters  into a relationship with, or accepts a gift from, a regulated company or  industry, concerns may arise about the agency’s ability to fulfill its  responsibilities impartially.
section_title: NIEHS and ORD Used Broad Legal Authority to Support Their Arrangements with ACC
paragraphs: The statutory provisions that NIEHS and ORD relied upon to enter into  their arrangements with ACC grant the agencies broad authority to  collaborate with external organizations in support of research. Nothing in  these statutes appears to prohibit either agency from entering into research  arrangements with nonprofit organizations such as ACC.
NIEHS used the authorities granted to NIH’s institutes and centers under  sections of the Public Health Service Act, as amended, to enter into its  arrangement with ACC (sections 301 and 405). The act authorizes NIH and  its institutes and centers to cooperate, assist, and promote the coordination  of research into the causes, diagnosis, treatment, control, and prevention of  physical and mental diseases. In its research arrangement with ACC,  NIEHS cited sections of the act as the authority it relied on to enter into the  arrangement. These sections enumerate the general powers and duties of  the Secretary of Health and Human Services and the directors of the  institutes and centers in broad terms, including the authority to encourage  and support studies through grants, contracts, and cooperative  agreements.
Similarly, ORD relied on broad authorities granted to EPA under sections of  the Clean Air Act, as amended; the Clean Water Act, as amended; and the  Solid Waste Disposal Act, as amended, to enter into its research  arrangement with ACC (sections 103, 104, and 8001, respectively). These  sections authorize EPA to promote the coordination and acceleration of  research relating to the causes, effects, extent, prevention, reduction, and  elimination of pollution in the air and water, and from solid waste. These  sections authorize the EPA Administrator and other EPA officials to  cooperate with appropriate public and private agencies, institutions,  organizations, and industry to conduct research and studies.
section_title: NIEHS and ORD Did Not Formally Evaluate, but Took Steps to Manage, the Potential for Conflicts of Interest in Their Arrangements with ACC
paragraphs: NIEHS and ORD did not formally evaluate the possibility that  organizational conflicts of interest could result from their research  arrangements with ACC because neither agency had policies requiring such  evaluations. However, officials at both agencies took steps to manage  potential conflicts that might arise during implementation of the  arrangements.
subsections: section_title: NIEHS and ORD Did Not Formally Evaluate Potential Conflicts of Interest that Could Result from Research Arrangements with ACC
paragraphs: In 2001 and 2003, when they entered into arrangements with ACC, neither  NIH nor EPA had specific policies requiring officials to formally evaluate  potential conflicts of interest that could result from entering into such  collaborative arrangements. As a result, neither NIEHS nor ORD conducted  such evaluations. During negotiations with ACC on their research  arrangements, NIEHS and ORD officials recognized the potential for  organizational conflicts of interest, or at least the appearance of such  conflicts. However, in light of the lack of policies on this issue, neither  agency formally evaluated the potential for conflicts before finalizing their  arrangements with ACC. Instead, officials told us, they informally  evaluated the potential for conflicts of interest and intended to manage  potential conflicts that might arise during implementation. To date, neither  agency has developed any such policy guidance.
section_title: NIEHS and ORD Relied on Existing Research Management Processes to Help Mitigate Potential Conflicts of Interest
paragraphs: In implementing their arrangements with ACC, NIEHS and ORD used their  general research management processes to help manage potential conflicts  of interest. These processes are designed to help ensure the integrity of  scientific research undertaken by these agencies. According to agency  officials, these processes helped guard against undue influence of ACC by  limiting ACC’s participation in the selection, review, and oversight of  agency-funded research conducted under the arrangements. For example:  Developing research topics. Research priorities at both NIEHS and ORD  were identified through routine agency planning processes that involved  significant input from a range of stakeholders before the arrangements  with ACC were finalized. In addition, NIEHS included research topics  suggested by the National Research Council, a congressionally  chartered scientific advisory body. Both NIEHS and ORD then worked  with ACC to select the specific scientific topics that would become the  focus of the research conducted under the arrangements. According to  NIEHS and ORD officials, their arrangements with ACC did not change  or influence the agencies’ research priorities. Because the research  conducted under these arrangements supported the agencies’ existing  research agendas, officials believe that the ACC arrangements helped  them effectively leverage federal research dollars.
Advisory council consultation. Both agencies have advisory panels that  they routinely consult on matters related to the conduct and support of  research, among other things. These consultations include public  sessions that allow interested individuals, in addition to the panel  members, to provide comments on the topics discussed. NIEHS  obtained approval from its National Advisory Environmental Health  Sciences Council before entering into the arrangement with ACC. ORD  did not specifically consult its Board of Scientific Counselors regarding  the agency’s arrangement with ACC, but did seek input from the Board  regarding the research priorities covered by the arrangement. Both  advisory bodies were established under the Federal Advisory  Committee Act and must comply with the requirements of the act as  well as related regulations.
Publicly announcing the availability of funds. Both NIEHS and ORD,  in 2001 and 2003, respectively, announced the opportunity to apply for  grant funds available under the arrangements with ACC throughout the  scientific community. Both agencies announced the availability of  funding on their Web sites and included detailed information on the  research programs and how to apply for funds. Both agencies also  posted announcements in publications that are commonly used to  advertise the availability of federal funding. Specifically, NIEHS  published an announcement in the NIH Guide to Grants and Contracts,  and ORD published its announcement in the Catalog of Federal  Domestic Assistance. In addition, both agencies sent announcements to  relevant scientific and professional organizations and to interested  scientists who had signed up for electronic notice of funding  opportunities. ORD also published a notice in the Federal Register. By  widely announcing the availability of funds, the agencies hoped to  ensure the participation of many qualified researchers and to avoid the  appearance of preferential treatment for specific researchers. Moreover,  widely publicizing the availability of funds would help ensure the  openness of the agencies’ research processes. However, the agencies  differed in the clarity of their instructions regarding how information  would be shared with ACC. For example, in the portion of the  announcement labeled “special requirements,” NIEHS’s announcement  stated that applicants “should,” among other things, submit a letter  allowing NIEHS to share their proposals with ACC. According to NIEHS  this wording was not intended to be interpreted as a requirement but  instead was intended to be a request. We believe that the language could  have confused potential applicants about whether sharing information  with ACC was required and could have dissuaded some qualified  applicants from submitting proposals. In contrast, under the ORD-ACC  arrangement, researchers were clearly advised that they could elect to  have their proposals considered for funding by either ORD or ACC or  solely by ORD. Applicants who did not want to share their proposals  with ACC could elect to have their applications reviewed and  considered solely by ORD.
Determining completeness and responsiveness. Initially, NIEHS and  ORD reviewed all submitted research proposals for compliance with  administrative requirements. ACC did not participate in these reviews.  At both agencies, research proposals judged incomplete were to receive  no further consideration. NIEHS and ORD also had similar approaches  for determining the responsiveness of the applications to the goals of  the research program. At ORD, responsiveness was determined as part  of the agency’s completeness review and did not involve ACC. Similarly,  at NIEHS, responsiveness was determined solely by agency officials.  Although NIEHS’s announcement stated that ACC would participate in  the responsiveness review, NIEHS and ACC officials told us that ACC  did not take part in this review.
Peer review of research proposals. At both NIEHS and ORD, complete  and responsive research proposals were independently peer reviewed  for technical and scientific merit. According to officials, each agency  followed its standard procedures for selecting experts to serve as peer  reviewers and excluded representatives of ACC from serving as  reviewers. At both agencies, only meritorious research proposals  qualified for funding decisions. Both agencies also subjected these  proposals to additional independent review. NIEHS’s National Advisory  Environmental Health Sciences Council reviewed qualified proposals,  and ORD required other EPA staff to review research proposals that  were judged “excellent” or “very good” to help ensure a balanced  research portfolio responsive to the agency’s existing research agenda.
ACC convened its own technical panels to review qualified research  proposals to ensure the relevancy of the proposals to the industry’s  research needs and to ensure that the proposals balanced its research  portfolio.
Making results available to the public. NIEHS and ORD required— without input from ACC—the results of the research funded under the  arrangements to be made public. For example, according to agency  officials, NIEHS and ORD required researchers to discuss their  preliminary findings in periodic public meetings, and, once their  projects were completed, both agencies required researchers to submit  their results for publication in peer-reviewed scientific journals. In  addition, NIEHS strongly encouraged researchers to present their  results at professional conferences and workshops. Officials from both  agencies agreed that publicizing the results of research conducted under  the arrangements helped ensure that agency-sponsored research  adhered to accepted analytic standards and was unbiased.
section_title: ORD Took Additional Steps that Officials Believe Helped Manage Potential Conflicts of Interest
paragraphs: In addition to the routine research management processes, discussed in  the previous section, officials at ORD took further steps that they believe  helped them manage the potential for conflicts of interest in their  collaboration with ACC. Specifically:  Research arrangement developed with public input. ORD publicly  announced that it might collaborate with ACC and invited public  comment on the terms and conditions of the proposed partnership. In  addition, ORD invited public comment on the draft announcement of the  opportunity to apply for funding. ORD officials told us that they believed  an open and public process to define the terms of ORD’s collaboration  with ACC could help guard against real or perceived conflicts of  interest.
Membership of review panels. In addition to prohibiting ACC  representatives from serving as expert reviewers, ORD did not allow  employees of ACC member companies to serve on the peer review  panels that evaluated research proposals for technical and scientific  merit. ORD officials said this step helped minimize the perception that  ACC or its members could play a role in evaluating the scientific merit of  research proposals.
section_title: NIEHS Generally Complied with NIH’s Gift Acceptance Policy, but the Policy Cannot Provide Assurance that Conflicts of Interest Are Evaluated and Managed
paragraphs: When accepting funds from ACC under the research arrangement, NIEHS  officials complied with those sections of NIH’s policy that guide the  acknowledgement and administration of gifts. However, the policy’s  guidance on evaluating and managing potential conflicts is extremely  broad, lacking clarity and consistency. Consequently, officials have wide  discretion in deciding how to fulfill their responsibilities under the gift  acceptance policy. Further, the policy does not require officials to  document the basis of their decisions. As a result, the gift policy does not  provide the public sufficient assurance that potential conflicts of interest  between NIH and donor organizations will be appropriately considered.
Specifically, NIH’s gift acceptance policy outlines several steps that  officials must take to acknowledge and administer gifts. NIEHS officials  generally complied with these policy sections when accepting the gift from  ACC. For example, NIEHS officials acknowledged the acceptance of ACC’s  gift in a timely manner, deposited the funds in government accounts, and  used the gift only for the purposes stipulated by ACC. As the policy also  requires, NIEHS obtained ACC’s written agreement that any remaining  funds could be used to further NIH’s goals without additional stipulation.
However, other policy sections are inconsistent or unclear about what  actions officials must take to evaluate conflicts of interest when accepting  gifts—thereby affording officials wide discretion in carrying out their  responsibilities. For example, one part of the policy in effect at that time  and in subsequent revisions requires the approving official to use two  assessment tools to evaluate conflicts of interest before accepting a gift,  but another part of the policy states that the use of these tools is  recommended rather than required. The Director of NIEHS, who had  authority to accept the gift, said he was acutely aware that accepting the  ACC money could pose the potential for real or apparent conflicts of  interest. In light of his concerns, he spoke informally with the Acting NIH  Director, senior NIEHS officials, NIH legal advisers, and senior officials  from two external groups. Through these discussions and using his  professional judgment, the NIEHS Director determined that accepting the  ACC funds would not present a conflict of interest for NIEHS. When he  decided to accept the ACC gift, the Director said that he was unaware of  the assessment tools recommended by NIH’s policy. However, he believes  the steps he and other NIEHS officials took in accepting ACC’s gift satisfied  the gift acceptance policy regarding conflicts of interest. Given the lack of  consistency in the policy sections that relate to conflicts of interest and the  use of the assessment tools, it is difficult for us to determine whether the  actions the director took complied with the NIH policy. Moreover, without  documentation of his actions, we could not determine whether the steps he  took were adequate to evaluate the potential for conflicts of interest.
Furthermore, the policy in effect at that time and in subsequent revisions  does not provide clear guidance on what type of coordination should occur  between NIH offices in evaluating the potential for conflicts of interest  when accepting a gift. For example, several NIEHS staff were concerned  that the proposed ACC gift could result in an apparent conflict of interest  and, consistent with NIH’s gift policy, forwarded the written agreement to  the NIH Legal Advisor’s Office for review. However, the gift policy does not  require staff to identify their concerns when seeking legal advice.  According to these officials, in referring the agreement to NIH attorneys for  review, they did not specifically request a determination of whether the gift  would constitute a conflict of interest. As a result, the NIH attorneys  conducted a general legal review of the gift and the proposed research  arrangement, focusing primarily on the agency’s legal authority to enter  into the arrangement. NIH legal staff told us that they could have provided  assistance on conflict-of-interest issues had they been notified that the  program staff had such concerns, or if in their view, the gift or written  agreement had contained clauses that were obviously illegal or contrary to  NIH policy. If the policy had been clearer about how conflict of interest  concerns are to be communicated to NIH attorneys, we believe the legal  staff would have conducted a conflict-of-interest review.
Finally, NIH’s policy does not require officials to document how they have  addressed conflict-of-interest concerns. Neither the NIEHS Director nor  other senior NIH officials documented their consideration of potential  conflicts of interest when accepting the ACC gift. The lack of  documentation, coupled with the broad discretion resulting from the  inconsistency and lack of clarity in the policy, allows officials to satisfy  requirements with a wide array of actions, ranging from a formal evaluation  to a highly informal one.
section_title: Research Arrangements Such as Those with the American Chemistry Council Are Not Widely Used
paragraphs: At NIH, we identified nine arrangements that were somewhat comparable  to the ACC research arrangements, but we did not identify any similar  arrangements at ORD, other EPA program offices, FDA, or FAA. None of  the nonprofit partners in the nine research arrangements we found at NIH  represents industry in the same direct manner that ACC represents the  chemical industry. However, some of the nonprofit partners have either  general corporate sponsorship or corporate sponsorship for specific  events. For example, sponsors of the Parkinson’s Unity Walk in 2004  included pharmaceutical companies. The sponsors helped defray operating  expenses to ensure that all proceeds from the walk supported Parkinson’s  research. Likewise, the Juvenile Diabetes Research Foundation received  corporate sponsorship from an airline company, manufacturers of soft  drinks and household products, and others, none of whom had any material  connection to the outcome of the research. One nonprofit partner is a  corporation’s philanthropic foundation.
At NIH, we found a total of 11 institutes and centers—either singly or with  other institutes and centers—that had entered into research arrangements  with one or more nonprofit partners. Under the terms of four of the  arrangements, NIH accepted gift funds from nonprofit partners to support  the research described in the arrangements. In four other arrangements,  when NIH institutes or centers lacked sufficient money to fund all the  research proposals rated highly by peer review panels, they forwarded the  research proposals to their nonprofit partner(s) for possible funding. (See  table 1 for details on the NIH arrangements.)
At EPA, none of the 16 program and regional offices we contacted  identified any arrangements similar to the research arrangement between  ORD and ACC. In addition, we did not identify any partnerships similar to  the ACC research arrangement at FDA or at FAA. FDA officials we  contacted said the agency had no research arrangements similar to the  ACC arrangement with organizations that represent industry. Finally, FAA  officials said that the agency had not entered into any research  arrangements like the arrangements with ACC and generally did not use  this type of collaborative arrangement to conduct extramural research.
section_title: Conclusions
paragraphs: Federally funded research advances scientific understanding and helps  improve regulatory approaches to protecting human health and the  environment. For both regulatory and nonregulatory agencies  collaboration with external organizations is one mechanism to maximize  the financial and intellectual resources available to federal agencies.  However, collaboration, particularly with organizations that directly  represent regulated industries, can raise concerns about conflicts of  interest that could call into question the quality and independence of  federally funded research. As a result, it is imperative that federal agencies  ensure, before they enter into collaborative research arrangements with  nonfederal partners, that they fully consider the potential for conflicts of  interest.
NIEHS and ORD relied on their general research management processes to  minimize any potential conflicts of interest that might arise during  implementation of their respective ACC arrangements. While these  processes were appropriate for managing the arrangements, they were not  specifically designed to address conflict-of-interest concerns and therefore  cannot be considered adequate substitutes for formal conflict-of-interest  evaluations. Consequently, without policies requiring officials at NIH and  EPA to formally evaluate and manage potential conflicts of interest when  they enter into collaborative arrangements such as those with ACC, neither  agency can ensure that similar arrangements in the future will be  systematically evaluated and managed for potential conflicts of interest.
When accepting the gift from ACC, NIEHS officials believed their actions  satisfied the conditions of the NIH gift acceptance policy for conflict of  interest. However, NIH’s policy—both the wide discretion allowed in  deciding on whether and how officials should evaluate conflicts of interest  and the lack of required documentation—provides little assurance of  systematic evaluation of gifts that may present potential conflicts of  interest for the agency. To allay concerns about the potential for conflicts  of interest that may result from accepting gifts, officials should clearly  document both their evaluation of the potential for conflicts of interest and  the basis for their decisions to accept or reject a gift.
section_title: Recommendations for Executive Action
paragraphs: The Director of NIH and the Administrator of EPA should develop formal  policies for evaluating and managing potential conflicts of interest when  entering into research arrangements with nongovernmental organizations,  particularly those that represent regulated industry.
The Director of NIH should further revise the NIH gift acceptance policy to  require NIH officials to evaluate gifts, particularly from organizations that  represent regulated industry, for potential conflicts of interest and to  document the basis for their decisions, including what, if any, steps are  needed to manage potential conflicts.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided EPA and NIH with a draft of this report for their review and  comment. EPA neither agreed nor disagreed with our recommendation, but  provided technical comments that we have incorporated as appropriate.  (See app. II.)  NIH concurred with our recommendations and stated it  would take steps to implement them. In addition, NIH emphasized that is it  not a regulatory agency and suggested changes to the report to clarify its  role. We have added language to clarify NIH’s relationship with the  regulated industry. NIH also provided technical comments that we have  incorporated as appropriate. NIH’s comments and our response are  included in appendix III.
As agreed with your offices, unless you publicly announce its contents  earlier, we plan no further distribution of this report for 30 days after the  date of this letter. At that time, copies of this report will be sent to the  congressional committees with jurisdiction over the Environmental  Protection Agency and the National Institutes of Health; the Honorable  Stephen L. Johnson, Acting Administrator of EPA; the Honorable Elias A.  Zerhouni, Director of NIH; and the Honorable Joshua B. Bolten, Director of  the Office of Management and Budget. This report will also be available at  no charge on GAO’s home page at http://www.gao.gov.
If you have any questions about this report, please contact me at (202) 512- 3841. Key contributors to this report are listed in appendix IV.
section_title: Objectives, Scope, and Methodology
paragraphs: As requested by the Ranking Member of the Subcommittee on  Environment, Technology and Standards, House Committee on Science,  and the Ranking Member of the Subcommittee on Research, House  Committee on Science, we determined the (1) legal authority the National  Institutes of Health’s (NIH) National Institute of Environmental Health  Sciences (NIEHS) and the Environmental Protection Agency’s (EPA) Office  of Research and Development (ORD) used to enter into arrangements with  the American Chemistry Council (ACC); (2) extent to which NIEHS and  ORD evaluated and managed the possibility that conflicts of interest could  result from their arrangements; (3) extent to which NIEHS complied with  NIH’s gift acceptance policy when accepting ACC’s funds; and (4) extent to  which similar research arrangements exist within other offices and  programs within NIH and EPA, as well as other regulatory agencies.
To determine the legal authorities NIEHS and ORD relied on to enter the  research arrangements with ACC to solicit and fund extramural research,  we reviewed the statutes cited in agency documentation related to the  arrangements. For NIH, these authorities included sections 301 and 405 of  the Public Health Service (PHS) Act, as amended (42 U.S.C. §§ 241 and  284); and gift acceptance statutes contained in sections 231 and  405(b)(1)(H) of the PHS Act as amended (42 U.S.C. §§ 238, 284(b)(1)(H)).  For ORD these authorities included section 103 of the Clean Air Act, as  amended (42 U.S.C. § 7403), section 104 of the Clean Water Act, as  amended (33 U.S.C. §1254), and section 8001 of the Solid Waste Disposal  Act, as amended (42 U.S.C. § 6981). We also reviewed the following related  documentation on delegations of authority:    Memorandum from the Assistant Secretary for Health to Public Health  Service Agency Heads for “Delegation of Authority To Accept Gifts  Under Title XXI of the PHS, Miscellaneous” (July 10, 1995), and   NIH Manual Chapter 1130, Delegations of Authority, Program:  General  #5 Accept Gifts Under Section 231 of the PHS Act, Program: General #10  National Library of Medicine.
We also reviewed relevant legislative histories and Comptroller General  decisions and interviewed attorneys at NIEHS and ORD about their reviews  of the arrangements. Furthermore, we compared each agency’s policies  and both formal arrangements with the authorities cited above.
To determine what measures NIEHS and ORD took to evaluate and manage  the potential that conflicts of interest could result from their arrangements  with ACC, we interviewed program officials on their perceptions of conflict  of interest when the ACC arrangement was being considered, as well as on  the actions they took to develop and implement the arrangements. We also  interviewed budget and legal officials, as appropriate, at each agency on  their involvement in reviewing and completing the arrangements. We  reviewed the research arrangements with ACC, as well as other  documentation related to the arrangements, including correspondence  between agency officials and ACC, interagency memorandums, and  documentation of agency legal and other reviews. We considered statutes  on conflict of interest and ethics guidelines that might address the need for  agencies to consider and manage real or apparent conflicts of interest (18  U.S.C. § 209, and the Ethics in Government Act of 1978, 5 U.S.C. app. 4).  Finally, we interviewed ACC officials to obtain their views on conflicts of  interest and on the role of ACC representatives in developing the  announcement of funding availability, reviewing and funding research  proposals, and administering the grants. We did not test the NIEHS or ORD  internal controls governing the administration of grants awarded under the  arrangements.
To determine whether NIEHS’s acceptance of ACC funds as a gift complied  with NIH policy for accepting gifts, we collected and analyzed NIH’s policy  for gift acceptance and we interviewed legal staff at NIEHS concerning  their review of potential gifts and their assistance to program officials. We  obtained and reviewed the research arrangement and related  documentation on transferring and administering the gift funds. We  interviewed program officials on their actions in accepting the funds and  compared activities and documentation pertaining to NIEHS’s acceptance  of ACC’s gift with the requirements and recommendations outlined in NIH’s  policy.
To determine the extent of similar research arrangements at other federal  agencies, we identified officials responsible for 96 percent or more of the  extramural research budgets at NIH, EPA, and two additional agencies. We  then used a structured guide to determine what, if any, research  arrangements the agencies had with external partners. In addition to  NIEHS and ORD, we selected a nonprobability sample of two additional  agencies on the basis of the magnitude of the research component of their mission and congressional interest. The two agencies selected were the  Food and Drug Administration (FDA) and the Federal Aviation  Administration (FAA) because each agency had a research component to  its mission, a corresponding research budget, and a regulatory role. We  determined that the selection was appropriate for our design and  objectives and that the selection would generate valid and reliable evidence  to support our work.
To determine the extent to which arrangements exist within these four  agencies, we obtained the most current available data on extramural  research budgets from institutes and centers in NIH, program and regional  offices in EPA, and the programs and centers at FAA and FDA. To assess  the reliability of these data, we used a structured guide to interview  officials at each agency responsible for maintaining the databases  containing the data provided. Specifically, we obtained descriptions of the  databases, how data are entered into the databases, quality control checks  on the data, testing conducted on the data, and officials’ views on the  accuracy and completeness of the data. We asked follow-up questions  whenever necessary. FDA officials noted one limitation on the data that  were provided. Specifically, when compiling data on research budgets,  officials must sometimes subjectively interpret the term “research.” The  impact of such interpretation may cause the extramural research figures  for FDA to be slightly overstated. After taking these steps, we determined  that the data were sufficiently reliable for the purposes of this report.
We used these data to rank order the programs and centers and identify  officials in each agency responsible for administering 96 percent or more of  each agency’s extramural research budget. In our interviews with these  officials, we focused on arrangements established since January 1999— specifically, arrangements with characteristics similar to the ACC  arrangements. We looked for and considered arrangements with  nongovernmental, nonacademic partners to sponsor research extramural  to both organizations. We did not collect information or report on the use  of other types of agency research cooperation with external partners such  as cooperative research and development agreements or informal  consultations between agency and external scientists.
At NIH, we used a structured guide to interview officials at the following  institutes or centers, listed in order of greatest to least extramural research  grant-dollar totals, in fiscal year 2002:  National Cancer Institute; National  Heart, Lung, and Blood Institute; National Institute of Allergy and  Infectious Diseases; National Institute of General Medical Sciences;  National Institute of Diabetes and Digestive and Kidney Diseases; National  Institute of Neurological Disorders and Stroke; National Institute of Mental  Health; National Center for Research Resources; National Institute of Child  Health and Human Development; National Institute on Drug Abuse;  National Institute on Aging; National Eye Institute; NIEHS; National  Institute of Arthritis and Musculoskeletal and Skin Diseases; National  Human Genome Research Institute; National Institute on Alcohol Abuse  and Alcoholism; National Institute on Deafness and Other Communication  Disorders; National Institute of Dental and Craniofacial Research; National  Institute of Nursing Research; and National Institute of Biomedical Imaging  and Bioengineering. Together, these institutes and centers accounted for 99  percent of NIH’s total extramural research funds for fiscal year 2002.
At EPA, we used a structured guide to interview program officials from the  following offices and regions (shown in order of greatest to least funding  available for extramural research fiscal year 2003): ORD; Office of Water;  Region 6; Region 9; Office of International Affairs; Region 3; Office of Solid  Waste and Emergency Response; Region 4; Region 5; Region 1; Region 2;  Region 7; Region 10; Region 8; Office of Prevention, Pesticides and Toxic  Substances; and Office of Air and Radiation. Together, these offices  accounted for 99 percent of the EPA’s extramural research funds for fiscal  year 2003.
At FDA, we interviewed the agency official responsible for getting approval  for Memorandums of Agreement from the General Counsel’s Office and  Office of Grants Management and for ensuring that each agreement is  published in the Federal Register. FDA does not accept funds from external  partners under these agreements.
Finally, at FAA, we interviewed officials from the research and  development offices at headquarters as well as the division manager of the  Acquisition, Materiel, and Grants Division of the William J. Hughes  Technical Center. Together, these offices accounted for 96 percent of the  agency’s fiscal year 2003 funds for extramural research.
To independently corroborate the information obtained from agency  officials, to the extent possible, we collected documents on the agreements  we identified at these agencies and reviewed agency Web sites maintained  by the relevant centers and offices, as well as Web sites maintained by  external sources, such as advocacy or trade groups.
We conducted our review from February 2004 through February 2005 in  accordance with generally accepted government auditing standards.
section_title: Comments from the Environmental Protection Agency
section_title: Comments from the National Institutes of Health
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: In addition to the individuals listed above, key contributions to this report  were made by Amy Dingler, Karen Keegan, Judy Pagano, Carol Herrnstadt  Shulman, Barbara Timmerman, Mindi Weisenbloom, and Eugene Wisnoski.  Also contributing to this report were Anne Dievler and Jim Lager.