Enormous growth in government and private biomedical research funding and in financial relationships between government-funded investigators and private industry has increased the potential for financial conflicts of interest to occur that could compromise research integrity and the safety of participants. HHS has regulations on individual investigator financial interests in federally funded or regulated research. The academic and professional communities also have developed policies and guidelines on conflicts of interest and have recently devoted resources to study this issue in more depth. The budget of NIH, the principal federal agency that funds biomedical research, grew from a little over $3 billion in fiscal year 1980 to more than $20 billion in fiscal year 2001. Most NIH grants and contracts are awarded through universities and medical centers to investigators conducting research at these institutions. Private industry funding grew even more rapidly—funding by drug companies alone rose from $1.5 billion in 1980 to $22.4 billion in 2000. Industry sponsors of biomedical research either conduct the research themselves or provide the funding to university investigators, other research institutions, contract research organizations, or private medical practices. Collaborations between government-funded research investigators and private industry also have increased, in part because of the Bayh-Dole Act. The act gave universities, nonprofit corporations, and small businesses the ability to retain patents and commercialize their federally funded inventions in order to facilitate the commercialization of new technologies. University-generated patents rose from about 250 per year before 1980 to more than 4,800 in 1998. As the boundary between academia and industry has become less distinct, concerns have been raised about the potential for financial conflicts of interest in investigators’ as well as institutions’ relationships with private industry. Investigators’ financial relationships with outside interests can include working, contracting, or consulting for a company; holding a management position or board membership or having other fiduciary relationships; or owning stock or other securities. A conflict of interest occurs when these relationships compromise, or appear to compromise, an investigator’s professional judgment and independence in the design, conduct, or publication of his or her research. For example, financial conflicts of interest may affect the recruitment of human research subjects such that inappropriate participants are enrolled. These conflicts also may influence the informed consent process—by which the risks and benefits of a study are communicated to the participants—resulting in participants who are not fully informed about a study’s potential harm to them. Furthermore, an investigator’s financial stake in a product may bias the development and reporting of research results or make the investigator reluctant to share information with other investigators in order to maintain his or her competitive edge. Financial conflicts of interest could bias the publication of research findings. For example, a corporate sponsor of research with a vested financial interest in the study outcome may try to ensure that only findings favorable to the sponsor’s product are published. Institutional financial conflicts of interest may arise because of an institution’s desire to participate in technology transfer activities and its need to remain financially sound. While companies may invest in universities by supporting positions such as endowed chairs or facilities such as research laboratories, universities also may invest financial resources in companies that sponsor research at the institution. Such investments would include owning stock in a pharmaceutical company or investing in a small start-up company formed by entrepreneurial faculty who have invented products and want to market them commercially. Start- up companies are generally nonpublicly traded enterprises. An investor’s financial stake in a start-up may result in future financial gain. Sometimes, however, an institution’s economic goals may conflict with its goals of fostering objective, unbiased research. Financial interests may color its review, approval, or monitoring of research conducted under its auspices or its allocation of equipment, facilities, and staff for research. For example, in a case that came to light in the late 1980s, the president of one large university provided venture capital equal to one-fifth of the university’s endowment (funds that support the university) to invest in a biotechnology start-up company that used technologies the university developed, with the university consequently holding more than 70 percent of the company’s equity. The company also had university officials on its board of directors and conducted research through the university. Because of these ties, university decisions about research were inappropriately commingled with financial decisions about the start-up company. Within HHS, responsibility for the oversight of federally funded or regulated biomedical research rests primarily with three entities: NIH, FDA, and OHRP. NIH is charged with ensuring that the research it funds complies with applicable HHS regulations, including a PHS regulation on individual investigators’ financial interests. This regulation, promulgated in 1995, requires PHS-funded organizations or institutions (which include all NIH-funded organizations) to maintain and enforce written policies on financial conflicts of interest; inform their investigators of these policies; and require investigators to disclose any “significant financial interests” in entities whose financial interests may be affected by the research. While the PHS regulation uses the phrase “conflict of interest” without defining it, the regulation defines a “significant financial interest” as including income of an investigator or investigator’s spouse or dependent child expected to exceed $10,000 over 12 months, or equity interests exceeding $10,000 or 5 percent ownership of a company. It is left to institutional officials to determine which significant financial interests constitute conflicts of interest. Institutions must report a financial conflict of interest to the PHS awarding component and explain whether the conflict has been “managed, reduced, or eliminated.” The PHS regulation does not define these terms but provides several examples of strategies to be used. In practice, the management of a financial conflict of interest includes strategies to monitor any effects as well as to reduce or eliminate the financial interest. FDA is responsible for ensuring that the financial interests and arrangements of clinical investigators do not interfere with the reliability of data submitted to FDA in support of marketing applications for drugs, biological products, or medical devices. Under FDA’s financial interest regulation, effective in 1999, sponsors submitting marketing applications must certify that investigators did not have certain financial interests and arrangements, or must disclose them. FDA uses this information in conjunction with information submitted on the design and purpose of the study, and information obtained through on-site inspections, to assess data reliability. In contrast to PHS, FDA’s thresholds for financial interests requiring disclosure include payments made by the sponsor of a study to the investigator or his or her institution exceeding $25,000 (beyond the costs incurred in conducting the study) or any equity interest an investigator has in a publicly held company sponsoring the research that exceeds $50,000. OHRP oversees all research conducted or funded by HHS that involves human research subjects and enforces the HHS regulations regarding the protection of human subjects. HHS’ human subjects protection regulations do not address directly the disclosure and management of investigators’ financial conflicts of interest. However, the regulations do require a university’s IRB, which reviews research proposals involving human research subjects, to weigh a study’s risks and benefits to participants, and review the study’s participant consent form, as part of its review of the research. Because financial conflicts of interest may affect the risk-benefit analysis, the purpose of the IRB review implies consideration of them. While the actual IRB review of a research proposal may not explicitly consider financial conflicts of interest, IRBs have the right to request and review information about investigators’ financial interests that might pose risks to subjects, and they may require an investigator to disclose significant financial interests to the research subjects in the consent form. The human subjects protection regulations also state that an IRB member may not participate in the initial or continuing review of any project in which he or she has a conflicting interest, except to provide information requested by the IRB. Unless biomedical research is federally funded or involves research or products that need federal approval, it is not necessarily subject to the HHS regulations and oversight pertaining to financial interests and human subjects protection. A significant and growing amount of privately funded biomedical research exists that is not under the purview of HHS regulations and oversight. The academic community and professional associations have demonstrated concern about financial conflicts of interest in biomedical research for a number of years and have taken steps to address this issue. In 1990, the Association of American Medical Colleges (AAMC) issued a document that in part defined institutional and individual responsibilities for dealing with conflicts of interest in research and provided guidance to institutions in developing policies and procedures to meet their unique situations and local requirements. In 1993, the Association of American Universities (AAU) developed a framework for managing investigators’ financial conflicts of interest. Also in 1993, the Association of Academic Health Centers convened a task force to study institutional financial conflicts of interest and their management. Although this task force produced a report, it did not develop specific guidelines on institutional financial conflicts of interest. More activity has occurred recently, partly because of concerns about reports that financial conflicts of interest were associated with harm to research participants. In April 2000, the American Society of Gene Therapy adopted a policy strongly encouraging that its members have no equity, stock options, or comparable arrangements in companies sponsoring a clinical trial. Also in 2000, AAU formed the Task Force on Research Accountability, which issued a report in June on improving the management of human subjects protection systems. In October 2001, the Task Force issued a report on the management of individual and institutional financial conflicts of interest, with specific guidelines and recommendations. In 2001, AAMC convened a task force of clinical investigators; patient representatives; medical school, teaching hospital, and university leaders; and representatives from industry, the legal community, and the media to study the issue of conflicts of interest, update AAMC’s 1990 guidelines, and develop new principles for addressing institutional financial conflicts of interest. Editors of the major medical journals also have expressed concern about the competitive economic environment in which some clinical research is conceived, study subjects are recruited, and data are analyzed and reported.