University Research:

Controlling Inappropriate Access to Federally Funded Research Results

RCED-92-104: Published: May 4, 1992. Publicly Released: May 26, 1992.

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Pursuant to a congressional request, GAO surveyed the principal universities receiving technology development funding from the National Institutes of Health (NIH) and the National Science Foundation (NSF) to obtain information about the extent to which: (1) universities license federally funded technology; (2) foreign companies participate in universities' industrial liaison programs; and (3) universities' policies and procedures prevent inappropriate access to research that could result from faculty or administrator conflicts of interest.

GAO found that: (1) during fiscal years 1989 and 1990, the 35 surveyed universities granted 197 exclusive licenses and 339 nonexclusive licenses for NIH- or NSF-funded technologies, earning $29.3 million from exclusive licenses and $52.7 million from nonexclusive licenses; (2) most of the universities have substantially expanded their programs to transfer technology to businesses over the last decade; (3) although not necessarily inappropriate, the relationships between licensees and universities are becoming increasingly complex, with scientists owning licensees' stock and industrial liaison program members receiving exclusive licenses; (4) 24 of the 30 universities with industrial liaison programs reported having at least one foreign company member; and (5) industrial liaison program members frequently had advance access to research results. GAO also found that: (1) NIH and NSF rely on funding recipients to establish policies and procedures to resolve and report potential conflicts of interest, and do not review universities' policies and procedures; (2) 14 universities rely on faculty and other university members to voluntarily disclose potential conflicts of interest, while the other 21 universities require faculty to disclose outside interests or the existence of potential conflicts of interest; and (3) both NIH and NSF are considering alternatives to strengthen their guidelines for universities and other funding recipients to better control potential conflicts of interest.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: On June 27, 1994, NIH published in the "Federal Register" a notice of its intent to publish a document that provides funding recipients with a number of issues and points to consider when they review proposed sponsored agreements with commercial organizations. NIH did not address industrial liaison programs or other types of interactions between funding recipients and industry in this document.

    Recommendation: NIH and NSF should develop policies that address the extent to which U.S. and foreign industrial liaison program members can be given advance access to research the agencies have funded.

    Agency Affected: National Science Foundation

  2. Status: Closed - Implemented

    Comments: On June 28, 1994, NSF published a new Investigator Financial Disclosure Policy. The policy establishes procedures and defines terms, such as Significant Financial Interest, as a basis for ensuring that funding recipients adequately address conflict-of-interest issues. However, it does not require that NSF review its funding recipients' policies and procedures.

    Recommendation: NIH and NSF should review their funding recipients' policies and procedures to ensure that they adequately address conflict-of-interest issues.

    Agency Affected: National Science Foundation

  3. Status: Closed - Not Implemented

    Comments: On July 11, 1995, HHS published its final regulation entitled "Objectivity in Research" (42 C.F.R. Part 50). This regulation implements the first part of the recommendation requiring the disclosure of significant financial interests. However, HHS decided that it would not review universities' policies for disclosing and managing potential conflicts of interest. Instead, a funding recipient must make its policies and procedures available for review if HHS requests access.

    Recommendation: NIH and NSF should review their funding recipients' policies and procedures to ensure that they adequately address conflict-of-interest issues.

    Agency Affected: Department of Health and Human Services

  4. Status: Closed - Implemented

    Comments: On July 11, 1995, HHS published its final regulation entitled "Objectivity in Research" (42 C.F.R. Part 50), that implements the recommendation. The HHS regulation establishes standards and procedures to be followed by institutions that apply for research funding to ensure that the design, conduct, or reporting of HHS-funded research will not be biased by any conflicting financial interest of those investigators responsible for the research. Investigators are required to disclose to an official designated by the institution a listing of significant financial interests (and those of his/her spouse and dependent children) that would reasonably appear to be affected by the research proposed for funding by HHS. Investigators also are required to annually update this listing.

    Recommendation: The Secretary of Health and Human Services and the Director, NSF, should require that their grantees have procedures in place to effectively manage potential conflicts of interest. Such procedures should, at a minimum, require disclosure of specified types of outside interests to appropriate university representatives by: (1) investigators and other key personnel as part of the grant award process and annually thereafter for the duration of the grant; and (2) technology licensing personnel and others involved in making licensing decisions for technologies developed in whole or in part with NIH or NSF funding.

    Agency Affected: National Science Foundation

  5. Status: Closed - Implemented

    Comments: On June 28, 1994, NSF published a new Investigator Financial Disclosure Policy. NSF and HHS have used a similar approach for requiring institutions and investigators to disclose and manage actual or potential conflicts of interest. In particular, both NSF and HHS would require institutions and investigators to certify that they have complied with the institution's procedures for disclosing and managing conflicts of interest. In addition, both agencies require that, during the pendency of a funding award, the institutions will either solicit financial disclosures on an annual basis or require updates as investigators obtain new reportable financial interests.

    Recommendation: The Secretary of Health and Human Services and the Director, NSF, should require that their grantees have procedures in place to effectively manage potential conflicts of interest. Such procedures should, at a minimum, require disclosure of specified types of outside interests to appropriate university representatives by: (1) investigators and other key personnel as part of the grant award process and annually thereafter for the duration of the grant; and (2) technology licensing personnel and others involved in making licensing decisions for technologies developed in whole or in part with NIH or NSF funding.

    Agency Affected: National Science Foundation

  6. Status: Closed - Not Implemented

    Comments: NSF recently issued its new Investigator Financial Disclosure Policy. This policy addresses NSF's primary concerns related to potential inappropriate access to research results. NSF does not intend to take any further actions at this time.

    Recommendation: NIH and NSF should develop policies that address the extent to which U.S. and foreign industrial liaison program members can be given advance access to research the agencies have funded.

    Agency Affected: Department of Health and Human Services: Public Health Service: National Institutes of Health

 

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