FDA Ethics Compliance: Essential Information for Prospective Employees
Contact FDA Ethics Officials Before Starting Your Role
As a prospective FDA employee, it's crucial to understand that our agency's regulatory responsibilities create unique ethics obligations that may significantly impact your financial holdings and those of your family. We strongly recommend contacting an FDA ethics official before accepting your position to ensure you fully understand these requirements and can make informed decisions about your employment and investments.
Why Early Contact Matters
Contacting ethics officials before starting your FDA role allows you to:
- Understand exactly which investments you may hold or must divest
- Explore available exemptions or alternatives
- Plan for potential tax implications
- Make informed decisions about accepting your FDA position
- Avoid compliance issues after starting work
Remember: Even if an investment appears permissible under general FDA rules, it may still require divestiture if it substantially conflicts with your specific job duties. Early consultation ensures you have complete information to make the best decisions for your career and financial situation.
Understanding FDA's Unique Ethics Environment
FDA employees participate in regulatory and product approval decisions that substantially affect major sectors of the U.S. economy. Due to this significant regulatory role, FDA employees face broader financial restrictions than most federal agencies, including prohibitions on holding financial interests in companies we regulate.
Who Is Affected By These Restrictions
These ethics rules apply to You as the FDA employee, your spouse, your minor children.
Prohibited Financial Interests
You and your family members cannot hold financial interests in Significantly Regulated Organizations (SROs). This prohibition covers both publicly traded and privately held companies, and all sector funds that concentrate investments in SROs including the following and any other FDA regulated sectors:
- Drug and Biologic industries
- Food production and processing
- Cosmetics
- Medical device manufacturing
- Veterinary Medicine
- Tobacco
Federal Conflict of Interest Law (18 USC 208)
Beyond FDA-specific rules, all federal employees must comply with conflict of interest laws which prohibit employees from participating in particular matters that may affect the employee’s financial interests as well as those of the employee’s spouse, minor children, general partner, or organization in which the employee serves as officer, director, trustee, general partner, or employee. This may require you to:
- Recuse yourself from matters affecting your financial interests.
- Divest certain holdings that conflict with your job duties.
- Avoid participating in policies and Guidance's and regulatory matters affecting companies in which you have a financial interest.
FDA can determine if you can recuse and/or avail yourself of a de minimis exemption to the conflict-of-interest law. Otherwise, you may be directed to divest certain financial interest(s) when you onboard.
Digital Health Technology (DH) Companies
While not prohibited and not classified as SROs, financial interests in technology companies that provide IT/digital health tools and services require careful evaluation for potential conflicts with your specific FDA job duties. Examples of commonly held digital health companies that may pose a conflict of interest (COI) concern for certain employees include:
| Alphabet | Amazon | Apple | Microsoft |
What You Can Generally Own
- Diversified mutual funds and ETFs.
- Sector funds that do not concentrate investments in SROs.
- Bona fide pensions or employee benefits from previous SRO employment (subject to conflict analysis and ability to comply with ethics laws).
Action Steps Before Starting at FDA
Review All Financial Holdings
Examine financial statements for yourself, your spouse, and minor children, including:
- Individual stocks and bonds, including those held in an investment management account
- Mutual funds and ETFs
- Retirement plan investments (401k, IRA, etc.)
- Employee benefits from current/former employers (stock options, restricted stock, RSUs)
- Trust ownership or beneficiary interests
- Investment club or pooled participation
Use FDA Publicly Available Resources
Compare your investments against the SRO List and Prohibited Investment Funds List:
Contact FDA Ethics Officials
You should contact an FDA ethics specialist if you:
- Have questions about any ethics rules, need clarification, do not understand, or would like additional information about these ethics’ rules.
- Hold investments in professionally managed accounts as these restrictions apply even where you have no control over the investment decisions.
- Have a vested interest as a beneficiary of a trust. Depending on your rights in the trust, the trust assets need to be reviewed for SROs or conflicts.
- Own interests in private investment funds (private equity, venture capital, hedge funds).
- Hold investments through investment clubs or pools.
- Own financial interests in digital health companies.
- Need information about a Certificate of Divestiture (CD) for tax deferral if you have significant capital gains tax consequences for investments you have identified as prohibited under the FDA prohibited holding rule or conflict of interest law. Depending on the circumstances, you or your spouse may be eligible for a CD that would allow you to defer (not eliminate) the capital gains taxes for assets held in a non-retirement account.
Outside Activities Requirements
FDA employees must obtain prior approval for outside activities including teaching, writing, speaking, professional, consultative, board positions, and expert witness work. Form HHS 520 must be submitted 60 days before starting any outside activity.
Contact Information for the FDA Ethics Office
- Email: FDAEthics_Advice@fda.hhs.gov
- Ethics Hotline: (240) 402-1111