Policies and Procedures for Handling Conflicts of Interest with FDA Advisory Committee Members, Consultants, and Experts
This portion of the document provides background information on Federal conflict of interest statutes and regulations, provides principles and criteria for determining whether a conflict of interest exists and whether a waiver may be appropriate, and provides a description of Agency procedures for handling conflict of interest issues.
- FDA's Use of Outside Experts
The Food and Drug Administration (FDA) is a science-based regulatory agency with responsibility for approximately 25 percent of the gross national product. FDA oversees foods, drugs, biologics, and medical devices that the American public uses every day. To carry out its mission, FDA's decisions need to be based on the highest scientific standards. As science becomes more specialized, it becomes more difficult for general scientists to keep up with the scientific advances in the many areas that FDA regulates. To a large extent, the critical science base exists at the major research institutions in the private sector.
To provide this critical science base, FDA has over 900 outside experts who provide FDA with essential expertise in highly specialized areas. Many of these experts serve as members of FDA advisory committees. Others consult with FDA on individual tasks.
- The Potential for Conflict of Interest
While FDA has a great need for outside scientific advice, it is critical that the advice be free from conflict of interest and potential bias. If the advice FDA receives is biased or is seen as biased, it is of little value to the Agency.
The outside experts who serve FDA are often pre-eminent scientists in their field. They are typically active researchers on the cutting edge of science. As such, they and their organizations are often sought out by regulated industry to assist in product development. Indeed, studies have shown that academic biomedical research in the United States increasingly is supported by industry. For that reason, FDA's outside experts and the research centers where they work frequently have research grants from, and contracts with, regulated industry. This situation can give rise to potential conflicts of interest or appearances of a lack of impartiality.
- Minimizing Concern About Conflict of Interest
Federal statutes enacted by Congress create conflict of interest rules applicable to all Federal employees, including special Government employees (SGEs) serving on advisory committees. Regulations issued by the Office of Government Ethics (OGE) and the Department of Health and Human Services (HHS) create additional standards of ethical conduct and provide interpretive guidance concerning the Federal conflict of interest statutes. The Designated Agency Ethics Official (DAEO) of HHS has been designated by the Secretary of HHS to coordinate and manage the Department's ethics program. The DAEO, and the DAEO's staff in the Office of the General Counsel/Ethics Division, provide legal guidance concerning the Federal conflict of interest statues and regulations and provide guidance, as needed, regarding the application of those legal authorities in specific cases. The DAEO has delegated to the FDA Deputy Ethics Counselor and the FDA Ethics Staff authority to perform many of the functions of administering the FDA ethics program. Within FDA, the Commissioner of Food and Drugs has the final authority, subject to legal review by the DAEO for HHS, to make determinations in matters, such as the issuing of conflict of interest waivers, where Federal law accords the agency authority to exercise discretion regarding and employee's participation in official matters.
FDA has authority to allow an advisory committee member or outside expert to participate in the review of a new therapy notwithstanding an otherwise disqualifying financial interest provided that FDA complies with applicable legal standards. FDA may provide for this participation by granting a conflict of interest waiver for the expert. The decision to grant a waiver is subject to scrutiny and review by different parties: (1) the FDA Division or Office responsible for deciding on the safety and efficacy of the therapy, (2) the Center component that oversees the relevant advisory committee, and (3) FDA's Ethics Staff. These three evaluations occur before the request reaches the deciding official in FDA. In some situations, legal counsel in the OGC Ethics Division of the Department of Health and Human Services and the Office of Government Ethics is sought prior to a decision.
Decisions on ethical issues associated with the use of outside experts are made in accordance with appropriate legal advice and vetted by at least four (and as many as six) levels. These multiple, independent and sometimes redundant reviews, taken together, ensure FDA, the medical community, industry, consumer and patient groups and the American public that advisory committee recommendations are based on the best possible science and are free from bias. Further, advisory committee members provide scientific advice in a public forum where their advice is open to public scrutiny and is balanced by advice from other knowledgeable experts.
III. HISTORICAL OVERVIEW
For years, the Federal Government has attempted to balance the need for outside expertise in advisory committees with protecting against potential conflicts of interest. Federal criminal law prohibits a Federal employee from participating personally and substantively in an official capacity in any particular matter in which he has a direct or imputed financial interest if the particular matter will have a direct and predictable effect on that interest (18 U.S.C. 208(a)). The impact of this prohibition on advisory committees became an issue that the Federal government sought to resolve in the late1980's.
- The President's Commission on Federal Ethics Law Reform
In 1989, the President's Commission on Federal Ethics Law Reform (the Commission) addressed the conflict of interest issues associated with advisory committee members and published a detailed report of its findings and recommendations. The Commission found that most criminal conflict of interest laws make special allowances for advisory committee members. However, section 208(a) (18 U.S.C. 208(a)) (described above) prohibits taking action affecting a personal financial interest and did not include any exemption for special Government employees (including advisory committee members). The Commission recognized the need for ethical restraints on advisory committee members but believed "the government is needlessly handicapped in obtaining advice and information from individuals with expertise located in the private sector."2
The Commission concluded that the usual remedies for potential conflict of interest fell short of meeting the government's needs. The Commission found that experts in a given area typically may have significant employment and other financial interests related to that very same area. Few experts would choose to divest themselves of assets or jobs to assume temporary, often unpaid positions on an advisory committee. Further, recusal would generally be an unworkable remedy because it would deprive the committee of the conflicted person's expertise. The Commission also found that existing requirements for disqualification or waiver did not solve the problem because they had "the effect of eliminating a class of talented and skilled individuals from providing advice to the government."3
The Commission stated that advisory committees convened under the Federal Advisory Committee Act (FACA) warrant a different approach than the standard conflict of interest treatment in 18 U.S.C. 208. According to the Commission, FACA itself includes alternative safeguards that help protect the public's interest in the integrity of advisory committee deliberations. First, FACA includes a requirement that the membership of advisory committees be fairly balanced with respect to the issues under consideration. Furthermore, FACA requires advisory committees to hold public meetings, except in unusual circumstances. As such, deliberations of a FACA advisory committee are open to the most exacting public scrutiny. Finally, the recommendations of an advisory committee are not, in themselves, binding. Advisory committee recommendations are "presented publicly to another government official who can judge independently the degree to which recommendations" might be influenced by the personal interest of the members.4
Finally, the Commission recommended legislation that would authorize the official who appoints the members of an advisory committee to determine, after a review of financial disclosure forms filed by the prospective member, that the need for the member's expertise outweighs the conflict of interest.4
- The Ethics Reform Act of 1989
After the Commission's final report, Congress enacted the Ethics Reform Act of 1989 (Pub. L. 101-94). The Ethics Reform Act reflected the recommendations of the Commission by including a new conflict of interest provision in 18 U.S.C. 208. Under new section 208(b)(3), a special Government employee may participate in an advisory committee under FACA despite a potential conflict of interest if the official responsible for the employee's appointment, after reviewing the employee's financial disclosure statements, determines that the need for the employee's services outweighs the potential conflict of interest created by the employee's financial interest.
Thus, under the Ethics Reform Act, Agencies must balance the need for scientific expertise with the need to protect against the possibility that the member will be in a position to affect his financial interests.
IV. CURRENT FEDERAL REGULATIONS IMPLEMENTING 18 U.S.C. 208
In December 1996, the Office of Government Ethics (OGE) issued final regulations (5 CFR part 2640) that interpret and implement 18 U.S.C. 208 (61 FR 66829, December 18, 1996). The regulations: (1) provide guidance to agencies on the factors to consider when handling conflicts of interest and granting waivers for all Federal employees (including outside experts), (2) provide interpretive guidance concerning the conflict of interest laws, and (3) authorize certain exemptions to the conflict of interest prohibition.
- General Conflict of Interest Prohibition
As explained in the OGE regulations, unless granted a waiver, a Federal employee may not personally and substantially participate in an official capacity in any particular matter which, to his knowledge, he or any other person (whose interests are imputed to the employee under 18 U.S.C. 208) has a financial interest if the particular matter will have a direct and predictable effect on that interest (5 CFR 2640.103(a)).
The regulations explain several concepts that assist Agencies in implementing the requirements. These include:
- Definition of Financial Interest
Financial interest, a term of art under section 208 and 5 CFR part 2640, is defined in the regulations as the potential for gain or loss as a result of governmental action on the particular matter. The regulation makes clear that the phrase also includes a salary, job offer, indebtedness, and similar interests. (5 CFR 2640.103(b))
- Particular Matters
There are two types of particular matters: particular matters involving specific parties, which typically involve a specific proceeding affecting the legal rights of the parties (e.g., a sponsor presenting a pending application to an advisory committee) (5 CFR 2640.102(l)); and particular matters of general applicability (e.g., FDA seeking advisory committee input on a guidance document) (5 CFR 2640.102(m)).
- Other Persons Who May Present Conflict of Interest Issues
Under 18 U.S.C. 208, the financial interests of other persons and organizations are imputed to the employee and may disqualify an employee to the same extent as the employee's own interests. Such other persons and organizations include: the employee's spouse, minor child, or general partner; an organization or entity for which the employee serves as officer, director, trustee, general partner, or employee; and a person with whom the employee is negotiating for, or has an arrangement concerning, prospective employment.
- Direct and Predictable Effect
Under 18 U.S.C. 208, a conflict of interest arises when the employee participates in an official matter and there is a direct and predictable link between the matters in which the Federal employee participates and the employee's financial interests. The link cannot be contingent and dependent on other events.
- Waivers for Conflict of Interest Under the Implementing Regulations
18 U.S.C. 208(b) permits the government to waive the disqualification requirement of section 208(a) and authorize an employee, under certain circumstances, to participate in particular matters notwithstanding an otherwise disqualifying financial interest. The stature provides for three types of such authorizations: (b)(1) waivers (waivers under 18 U.S.C. 208(b)(1)); (b)(2) exemptions (exemptions under 18 U.S.C. 208(b)(2)); and (b)(3) waivers (waivers under 18 U.S.C. 208(b)(3)).
- (b)(1) Waivers
Under 18 U.S.C. 208 (b)(1), FDA may grant a (b)(1) waiver to any employee appointed by FDA when it determines that the disqualifying financial interest is not so substantial that it is likely to affect the integrity of an employee's services to the government.
The granting official may consider several factors in making this determination, including: the type of interest creating the disqualification; the identity of the person whose financial interest is at issue; the dollar value of the disqualifying financial interest including its value in relationship to the individual's overall assets; the nature and importance of the employee's role in the matter, including the extent to which the employee is called upon to exercise discretion; the sensitivity of the matter; and the need for the employee's services in the particular matter (5 CFR 2640.301(b)).
The OGE regulations (5 CFR 2640.301(a)) describe the procedures for granting a (b)(1) waiver, including:
- The disqualifying interest and the circumstances of the particular matter or matters must be fully disclosed to the government official responsible for appointing the employee to his position (or other official when authority to issue waivers has been delegated).
- The government official (or other authorized official) responsible for the appointment must issue a written waiver before the employee takes any action in the matter(s).
- The written waiver must be based on a determination that the disqualifying financial interest is not so substantial as to be deemed likely to affect the integrity of the employee's services to the Government. The written waiver should describe the disqualifying financial interest, the particular matter or matters to which it applies, the employee's role in the matter or matters, and any limitations on the employee's ability to act in such matters. The waiver may apply to both present and future financial interests, provided the interests are described with sufficient specificity.
- (b)(2) Exemptions
In implementing 18 U.S.C. 208(b)(2), OGE's regulations (5 CFR part 2640, subpart B) provide for exemptions to the general prohibition described in 18 U.S.C. 208(a). These exemptions allow participation without the need for individual conflict of interest waivers in the situations described below.
- Exemptions for Special Government Employees Serving on Advisory Committees
An SGE serving on an advisory committee with a disqualifying financial interest based on his non-Federal employment or prospective employment may participate in any particular matter of general applicability affecting that interest if the matter will not have a special or distinct effect on the employee or his employer, other than as part of a class (5 CFR 2640.203(g)). This exemption does not apply to participation in particular matters involving specific parties (such as drug applications) and it does not apply to any stock ownership the employee may have in his employer or prospective employer.
Under 5 CFR 2640.203(i), an advisory committee member may participate in committee matters concerning medical products if the disqualifying financial interest arises from (a) employment with a hospital or other similar medical facility whose only interest in the medical products is purchase of it for use by, or sale to, its patients; or (b) the use or prescription of medical products for patients.
SGEs serving as nonvoting consumer or industry representatives on FDA advisory committees required by statute to have representative members may participate in any particular matter affecting a financial interest of the class that the employee represents (5 CFR 2640.203(j)).
- Exemptions for all Government Employees6
An employee may participate in any particular matter affecting one or more of the holdings of a diversified mutual fund or a diversified unit trust if the employee's disqualifying financial interest arises because of ownership in the fund or trust (5 CFR 2640.201(a)).
If an employee's disqualifying financial interest arises from ownership in publicly traded securities that could be affected by the matter at issue, he may participate in a particular matter involving specific parties if the aggregate market value of his holdings and those of his spouse and minor children do not exceed $5,000, and may participate in a particular matter of general applicability if the aggregate market value of his holdings and those of his spouse and minor children do not exceed $25,000 in any one entity or $50,000 in all affected entities (5 CFR 2640.202).
An employee may participate in any particular matter affecting one campus of a State institution of higher education if the employee's disqualifying interest is employment in a position with no multi-campus responsibilities at a separate campus of the same institution (5 CFR 2640.203(c)).
- (b)(3) Waivers
As discussed in section III.B, 18 U.S.C. 208(b)(3) was enacted as part of the Ethics Reform Act. Under this provision, a special Government employee serving on an advisory committee under FACA may participate in matters before the committee from which he would otherwise be disqualified if the official responsible for the appointment determines that the need for the employee's services outweighs the potential conflict of interest created by the employee's financial interest.
Under 5 CFR 2640.302(a), FDA may grant a (b)(3) waiver to a special Government employee serving on an advisory committee and to an individual being considered for appointment to an advisory committee. The granting official may consider many factors in determining whether to grant the waiver, including: the type of interest that creates the disqualification, the identity of the person whose financial interests are an issue, the uniqueness of the individual's qualifications, the difficulty of locating a similarly qualified individual without a disqualifying interest to serve on the committee, the dollar value of the disqualifying financial interest including its value in relationship to the individual's overall assets, and the extent to which the financial interest will be affected by the actions of the advisory committee (5 CFR 2640.302(b)).
The OGE regulations (5 CFR 2640.302(a)) also describe procedural requirements for granting a (b)(3) waiver, including:
- The advisory committee must be convened under FACA.
- The government official responsible for appointing the employee to his position (or other authorized official) must issue a written waiver before the employee takes any action in the matter(s).
- The written waiver must include a certification that the need for the individual's services outweighs the potential for a conflict of interest. The waiver should also fully describe the facts upon which the waiver is granted, including the nature of the financial interest and the particular matter(s) to which the waiver applies, and any limitations on the individual's ability to act in the matter(s). The waiver may apply to both present and future financial interests, provided the interests are described with sufficient specificity.
V. IMPACT OF THE FOOD AND DRUG ADMINISTRATION MODERNIZATION ACT OF 1997
Section 120 of the Food and Drug Modernization Act of 1997 (Pub. L. 105-115) includes additional requirements that apply to FDA advisory committees. One such requirement is that a committee member may not vote on any matter regarding the clinical investigation or approval for marketing of a drug or biologic if the member or the member's immediate family could gain financially from the committee's recommendations. Section 120 of the Modernization Act states that FDA may waive this conflict of interest requirement if the member's participation is necessary to afford the committee essential expertise. However, FDA may grant no waiver if the member's own work is involved.
When implemented together, three requirements in section 120 of the Modernization Act present conflict of interest challenges for advisory committees that review clinical investigations or approval for marketing of drugs and biologics.
- FDA may not grant a waiver allowing an advisory committee member to review his own work.
- There must be at least two members on the advisory committee who are knowledgeable about the disease that the product is intended to treat.
- Advisory committee members must be trained before participating in a committee meeting.
Of note, the pool of experts that serve FDA's Advisory Committees are special Government employees (SGE's).
VI. PROCEDURE FOR CONFLICT OF INTEREST CLEARANCE
The process for determining the eligibility of outside experts to participate in advisory committee meetings is a labor-intensive task that involves multiple levels of review. The process may involve as many as 11 steps. These steps are described below.
- Review of Assignment to Assess the Potential for Conflicting Financial Interests
First, the agenda of the advisory committee meeting or individual assignment is assessed in light of the types of matters to be addressed. This assessment is critical because the eligibility and waiver rules (21 CFR part 2640) vary depending on the type of meeting or assignment. In general, there are three types of meetings or assignments: (1) a particular matter involving specific parties, (2) a particular matter of general applicability and (3) other matters such as committee member training or a review of intramural research.
If the meeting or assignment involves a particular matter involving specific parties, all entities with a financial interest in the meeting or assignment are identified to the extent feasible. For a meeting or assignment related to a product approval, the entities with a financial interest may include the sponsor and firms who will manufacture or market (1) the product being reviewed, (2) products that would be used in conjunction with the one being reviewed, and (3) products that would compete with the one being reviewed.
- Preparation of Confidential Financial Disclosure Statement (Form
It is critical that the FDA's financial disclosure form (FDA
form 3410) be clear and accurate. In preparation for each advisory
committee meeting, FDA's Center specific Advisory Committee Staff send
each special government employee instructions and a summary of his or
her previously reported financial interests in an effort to assist the
SGE in updating his or her relevant information. The FDA staff is available
to answer any related questions.
- Completion of Confidential Financial Disclosure Statement by Outside Expert
The outside experts are expected to fill out the questionnaires to their fullest knowledge. There is no general requirement that they seek out additional information about interests of their employing institutions beyond their own personal knowledge. There is an exception to this provision in the case of Department heads. Department heads are expected to be knowledgeable about all research within their department and to obtain additional details on the research if needed.
- Review of Questionnaire and Initial Determination
The FDA staff reviews the member's responses to the questionnaire and focuses on whether a conflict of interest exists. Based solely on the reported information it is often possible to determine: (1) there is no conflict of interest, (2) there is a conflict of interest that is minimal and a waiver can easily be justified or (3) there is a conflict of interest that is so great, recusal is the only course of action.
When clarification is needed, FDA staff may ask the outside expert to respond to additional questions.
If a conflict of interest exists, the details of the conflict are documented. FDA staff considers the factors described in the section on FDA's Modernization Act and uses the criteria tables in section three of this document in determining whether to recommend a waiver.
- Consultation with Review Division.
Advisory committee meetings are scheduled to provide advice to the FDA official making a decision. Typically, the FDA official is an Office or Division Director. The official is notified of any significant conflicts of interest that are reported to enable a determination of the extent to which the member's expertise is important to the meeting. If the reported interest is significant and the need for the member's services is not great, recusal would be appropriate. If the member's services are important to the meeting because no one else with the expertise can be obtained for the meeting, a waiver may be appropriate. In making this determination, the review office and division must take into account the requirements of the FDA Modernization Act of 1997.
If it is not feasible to obtain other expertise, the review division and advisory committee staff will work together to provide the necessary justification for any waiver. Where the financial interest is relatively large it is essential that the justification be particularly strong.
- Preparation of Waiver and Justification
Waivers are prepared using the standard Agency format. (See Appendix 1)
- Review by FDA's Ethics Staff
The FDA Ethics Staff conducts an independent review of all conflict of interest waivers and makes a recommendation to the approving official concerning the waiver. If questions arise about the justification for the waiver, the Ethics Staff asks the recommending office for additional information. The Ethics Staff may also consult with the Office of General Counsel in the Department or the Office of Government Ethics.
- Final Approval by Appointing Official
A proposed waiver and justification for the waiver receives multiple levels of review before reaching the appointing official for final approval. The official should have confidence in the vetting process and should feel confident in the recommended action.
The appropriate review division staff (including Office and Division Directors), appropriate conflict of interest staff, recommending official for the waiver, and appropriate Ethics Staff member are available to provide additional information and guidance to the appointing official.
If the appointing official does not approve a proposed waiver, the official notifies all affected parties and articulates the reason(s) for disapproval. The requesting official may choose to appeal the decision, may modify the agenda for the meeting, or may take another appropriate action. Every effort is made to resolve the issue expeditiously.
1This guidance document represents the Agency's current thinking on policies and procedures for handling conflicts of interest with FDA advisory committee members, consultants, and experts. It does not create or confer any rights for or on any person and does not operate to bind FDA or the public. An alternative approach may be used if such approach satisfies the requirements of the applicable statute, regulations, or both.
2To Serve with Honor: Report of the President's Commission on Federal Ethics Law Reform (Commission Report), March 1989, p. 29.
3Commission Report, p. 30.
4Commission Report, p. 30.
5Commission Report, pp. 30-31.
6Please note that most full-time FDA employees are subject to a prohibited holdings regulation which prevents the ownership of financial interest in significantly regulated entities, notwithstanding the regulatory exemptions.