NIH Ethics Program

1
NIH Ethics Program

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

2
What is a Substantially Affected Organization?

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

3
Why must the HHS-716 be filed?

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

4
Who must file the HHS-716?

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

5
What are the limits for holdings?

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

6
What is a conflict of interest?

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

7
Conflict Examples

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

8
Conflict Examples, cont.

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

9
How do I review the HHS-716?

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

10
Employees Section of the Form

• Part III, Box 1

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Supervisory Review, cont.

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

12
Example of Party vs. Non-Party

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

13
Supervisory Review, cont.

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

14
Supervisory Review, cont.

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

15
Supervisory Review, cont.

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

16
Supervisory Review, cont.

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

17
Supervisory Review, cont.

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

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Summary of What You Do

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

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Finalize Your Review

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

20
What Happens Next?

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

21
Conflict Resolution, cont.

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

22
Ethics Staff Responsibilities

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

23
Is further reporting required?

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

24
Is help available?

• Yes. You may contact your IC Ethics Office staff
  for assistance in identifying conflicts. Names
  and contact information are available on the NIH
  Ethics Program web site
• Deputy Ethics Counselors http//ethics.od.nih.gov
  /decs.htm
• Ethics Specialists http//ethics.od.nih.gov/coor
  d.htm

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Additional Assistance

• Detailed procedures for reviewing the HHS-716 are
  available on the NIH Ethics Program Website at
• http//ethics.od.nih.gov/topics/finandisc-oct05.h
  tm
• You may contact an Ethics Specialist in the NIH
  Ethics Office by calling 301-402-6628

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Certificate

• You have now finished the Supervisors
  Training for Reviewing the HHS-716. Print this
  certificate and send it to your IC Ethics Office.
  Click on File, then Print. Chose Print
  Current Slide to print just this page.
• Full Name _______________________________
• IC________ Division/Branch/Office___________