FAUCI AND 915 NIH SCIENTISTS CAUGHT RECEIVING (AND CONCEALING) MILLIONS IN ROYALTIES FOR EXPERIMENTAL TREATMENTS – AP

Under 15 U.S. Code § 3710c, federal researchers, whose work was patented and commercialized, receive royalties at the rate of at least 15% of what the US government receives from the licensees, capped at $150,000 per person, per year. NIH and CDC pay their scientists 25% (on amounts over $50,000). These royalties are paid even after the person leaves the government employment and continue after his or her death.

NIH, NIAID, or CDC researcher who contributed to the development of a novel drug or therapy, and was named as one of the inventors on a commercialized patent, may be entitled to $3 million in royalties over the 20-year lifespan of the patent. 

Federal agencies and laboratories, including NIH, NIAID, and CDC, are also encouraged to spread collected royalties among employees “who are not an inventor of such inventions but who substantially increased the technical value of such inventions”.

These royalties directly conflict with the main purposes of the National Institutes of Health and federal medical labs:

 – to have the ability and independence to honestly evaluate drugs developed by private pharma companies

 – to undertake research and development for which the private sector has no incentives.

NIH Scientists Caught Concealing Millions in Royalties for Experimental Treatments

Tue, 11 Jan 2005 / AP (Scrubbed off the Internet, but not entirely)

The Associated Press has uncovered evidence of scientists and administrators at the National Institutes of Health flagrantly disregarding ethical and legal requirements of financial disclosure: “In all, 916 current and former NIH researchers are receiving royalty payments for drugs and other inventions they developed while working for the government.”

According to records obtained by the AP, among the 51 NIH scientists currently involved in testing products for which they secretly receive royalties, are Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases and his deputy, Dr. H. Clifford Lane who “have received tens of thousands of dollars in royalties for an experimental AIDS treatment they invented [interleukin-2]. At the same time, their office has spent millions in tax dollars to test the treatment on patients across the globe.”

According to the AP, the government has licensed the commercial rights to interleukin-2 to Chiron Corp: “Fauci’s division subsequently has spent $36 million in taxpayer money testing the treatment on patients in one experiment alone. Known as the Esprit experiment, it is one of the largest AIDS research projects in NIH history, testing interleukin-2 on patients at more than 200 sites in 18 countries over the last five years.”

Five years ago Donna Shalala, then Secretary of the Health and Human Services, issued federal requirements (2000) of financial disclosure requiring NIH scientists to disclose their financial interest in experimental treatments on informed consent documents reviewed by patients being recruited as test subjects. According to the Associated Press, NIH administrators did not even consider implementing the 5 year old federal requirement until AP filed a Freedom of Information request last week: “Quite frankly, we should have done it more quickly…”

Scientists at the nation’s premier research centers who violate ethical and legal requirements and use underhanded recruitment tactics, pose a very real and present threat to public safety: “hundreds, perhaps thousands, of patients in NIH experiments made decisions to participate in experiments that often carry risks without full knowledge about the researchers’ financial interests.”

The scope of ethical / legal violations and corrupt human recruitment practices by researchers at America’s premier medical research institutions is reaching the proportions of a tzunami. Self-regulation and peer review have proven about as reliable at ensuring ethical and scientific integrity as expecting the Mafia to vouch for the honesty of one of its own…

It will take more than pledges and promises by the director of NIH – it will take more than TALK about “transparency” to restore moral integrity. It will take a law accompanied by specified penalties to fit the crime – like the Sarbanes Oxley law. And most important, it will take an external enforcement mechanism to keep scientists honest. Say, a “corrupt science practice” division at the Department of Justice. It will also require effective whistleblower protection laws.

Profit Motive Hidden From Patients

JANUARY 11, 2005 / 10:05 AM / AP / CBS

Two of the U.S. government’s premier infectious disease researchers are collecting royalties on an AIDS treatment they’re testing on patients using taxpayer money. But patients weren’t told on their consent forms about the financial connection.

Drs. Anthony Fauci and H. Clifford Lane, who helped invent the experimental interleukin-2 treatment being tested around the globe, even tried to alert patients about their royalties but were rebuffed by their own agency.

They’re hardly alone.

More than 900 current and former scientists at the National Institutes of Health legally collected $8.9 million in such royalties last year for drugs and inventions they discovered while working for the government, according to information obtained by The Associated Press.

But until last week, none was required to tell patients about their royalties despite the government’s promise in May 2000 that all scientists’ financial stakes would be disclosed to patients.

That’s because NIH didn’t get around to enacting a policy requiring the disclosure until after AP requested the royalty payments and disclosure policies under the Freedom of Information Act in December. The policy was formally distributed last week.

The nearly five-year delay means hundreds, perhaps thousands, of patients in NIH experiments made decisions to participate in experiments that often carry risks without full knowledge about the researchers’ financial interests.

“Quite frankly, we should have done it more quickly. But as soon as Director (Elias A.) Zerhouni found out about it, he ordered it done immediately,” NIH spokesman John Burklow said.

Ethics experts said the delay ran contrary to a basic premise of government ethics — open and full disclosure.

“It’s hard for patients to make an informed decision when they don’t have all the information,” said Bill Allison of the Center for Public Integrity, which monitors the ethics of government employees.

“When a doctor says, ‘Here, try this experiment, it is safe, or it will help,’ and the patient isn’t aware he has a financial interest in the outcome of that treatment, it in essence is taking advantage of someone by not letting them have all the information,” Allison said.

In all, 916 current and former NIH researchers are receiving royalty payments for drugs and other inventions they developed while working for the government. They can collect up to $150,000 each a year, but the average is about $9,700, officials said.

In 2004, these researchers collected a total of $8.9 million. Only a dozen received the legal maximum.

The government owns the patents and the scientists are listed as inventors so they can share in licensing deals struck with private manufacturers. In addition to the inventors’ take, the government received $55.9 million in royalties for the same inventions and put that money back into research.

Fauci and Lane have each received $45,072.82 in royalties since 1997 when the government licensed the treatment they invented to drug maker Chiron Corp.

Both doctors said they, too, were concerned about the appearance of a conflict of interest since the NIH division they oversee has been spending $36 million to test interleukin-2 on patients.

As a result, they took steps on their own to address the problem while NIH delayed in enacting a policy. For instance, the National Cancer Institute was brought in to independently review and approve the research in advance.

And Fauci tried to give back the royalty money he got from the interleukin-2 treatment and to disclose the payments on his public ethics forms. Both times he was rebuffed by his own agency, which declared he could do neither under the law.

So his only option was to donate all the money he has received since 1997 to charity. “I’m going to give every penny of it to charity … no matter what the yearly amount is,” Fauci said in an interview.

Lane is keeping his royalties, but said he pressed for years for a disclosure policy and occasionally gave interleukin-2 patients scientific journal articles that mentioned he was the inventor on the treatment’s patent.

“I believe patients should know everything that might influence their desire to be participants in research,” Lane said.

Both acknowledged they were unwilling to tell interleukin-2 patients about the royalties on consent forms until NIH developed its policy. Both will do so from now on.

“We were reluctant to make a formal policy until the broad policy came down from the department and NIH,” Fauci explained.

Their case illustrates the gulf between what the government promised nearly five years ago in the midst of controversy and what actually has been done.

Then-Health and Human Services Secretary Donna Shalala pledged in May 2000 that the government would develop policies to require “that any researchers’ financial interest in a clinical trial be disclosed to potential participants.”

Congress, concerned by reports of conflicts of interest and researchers’ conduct in several high-profile experiments, was told the changes would happen. The government first published guidance for the disclosure in January 2001.

Current HHS Secretary Tommy Thompson issued new guidance in May 2004 that again clearly cited “compensation that may be affected by the study outcome” and “proprietary interests in the products, including patents, trademarks, copyrights or licensing arrangements.”

NIH, however, didn’t order the disclosure until last week’s policy.

By JOHN SOLOMON

First published on January 11, 2005 / 10:05 AM

© 2005 The Associated Press.

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