[Federal Register Volume 76, Number 165 (Thursday, August 25, 2011)]
[Rules and Regulations]
[Pages 53256-53293]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-21633]



[[Page 53255]]

Vol. 76

Thursday,

No. 165

August 25, 2011

Part IV





Department of Health and Human Services





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42 CFR Part 50

45 CFR Part 94





Responsibility of Applicants for Promoting Objectivity in Research for 
Which Public Health Service Funding Is Sought and Responsible 
Prospective Contractors; Final Rule

  Federal Register / Vol. 76, No. 165 / Thursday, August 25, 2011 / 
Rules and Regulations  

[[Page 53256]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

42 CFR Part 50

45 CFR Part 94

[Docket Number NIH-2010-0001]
RIN 0925-AA53


Responsibility of Applicants for Promoting Objectivity in 
Research for which Public Health Service Funding is Sought and 
Responsible Prospective Contractors

AGENCY: Department of Health and Human Services.

ACTION: Final rule.

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SUMMARY: This final rule implements changes to the regulations on the 
Responsibility of Applicants for Promoting Objectivity in Research for 
which Public Health Service Funding is Sought and Responsible 
Prospective Contractors. Since the promulgation of the regulations in 
1995, biomedical and behavioral research and the resulting interactions 
among government, research Institutions, and the private sector have 
become increasingly complex. This complexity, as well as a need to 
strengthen accountability, led to changes that expand and add 
transparency to Investigators' disclosure of Significant Financial 
Interests (SFIs), enhance regulatory compliance and effective 
institutional oversight and management of Investigators' financial 
conflicts of interests, as well as increase the Department of Health 
and Human Services' (HHS) compliance oversight.

DATES: Effective Date: This final rule is effective as of September 26, 
2011.
    Compliance Date: An Institution applying for or receiving PHS 
funding from a grant, cooperative agreement, or contract that is 
covered by this rule must be in full compliance with all of the 
regulatory requirements herein:
     No later than August 24, 2012; and
     Immediately upon making its institutional Financial 
Conflict of Interest (FCOI) policy publicly accessible as described 
herein.
    In the interim, Institutions should continue to comply with the 
1995 regulations and report Investigator FCOIs to the Public Health 
Service (PHS) Awarding Component as required in the 1995 regulations.

FOR FURTHER INFORMATION CONTACT: Jerry Moore, NIH Regulations Officer, 
Office of Management Assessment, National Institutes of Health, 6011 
Executive Boulevard, Suite 601, MSC 7669, Rockville, MD 20852-7669, 
telephone 301-496-4607, fax 301-402-0169, e-mail [email protected], 
concerning questions about the rulemaking process; and Dr. Sally 
Rockey, NIH Deputy Director for Extramural Research, concerning 
substantive questions about the rule, e-mail 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    In 1995, the PHS and the Office of the Secretary of HHS published 
regulations at 42 CFR part 50, subpart F and 45 CFR part 94 (the 1995 
regulations), that are designed to promote objectivity in PHS-funded 
research. The 1995 regulations cover Institutions that apply for or 
seek PHS funding for research (except for Small Business Innovation 
Research (SBIR)/Small Business Technology Transfer Research (STTR) 
Phase I applications) and, through implementation of the regulations by 
these Institutions, to each Investigator participating in the research.
    Generally, under the 1995 regulations:
     The Institution \1\ is responsible for complying with the 
regulations, including maintaining a written and enforced FCOI policy; 
managing, reducing, or eliminating identified conflicts; and reporting 
identified conflicts to the PHS Awarding Component. The reports denote 
the existence of an FCOI and the Institution's assurance that it has 
been managed, reduced, or eliminated.
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    \1\ ``Institution'' was defined under 42 CFR part 50, subpart F, 
as any domestic or foreign, public or private, entity or 
organization (excluding a Federal agency), and under 45 CFR part 94 
as any public or private entity or organization (excluding a Federal 
agency) (1) that submits a proposal for a research contract whether 
in response to a solicitation from the PHS or otherwise, or (2) that 
assumes the legal obligation to carry out the research required 
under the contract. 42 CFR 50.603; 45 CFR 94.3.
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     Investigators \2\ are responsible for complying with their 
Institution's written FCOI policy and for disclosing their SFIs \3\ to 
the Institution.
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    \2\ ``Investigator'' was defined under the 1995 regulations as 
the Principal Investigator and any other person who is responsible 
for the design, conduct, or reporting of research (or, in the case 
of PHS contracts, a research project) funded by PHS, or proposed for 
such funding. For purposes of the regulatory requirements relating 
to financial interests, the term ``Investigator'' includes the 
Investigator's spouse and dependent children. 42 CFR 50.603; 45 CFR 
94.3.
    \3\ ``Significant Financial Interest'' was defined under the 
1995 regulations as anything of monetary value, including but not 
limited to, salary or other payments for services (e.g., consulting 
fees or honoraria); equity interests (e.g., stocks, stock options or 
other ownership interests); and intellectual property rights (e.g., 
patents, copyrights and royalties from such rights). The term does 
not include: (1) Salary, royalties, or other remuneration from the 
applicant Institution; (2) any ownership interests in the 
Institution, if the Institution is an applicant under the SBIR/STTR 
programs; (3) income from seminars, lectures, or teaching 
engagements sponsored by public or nonprofit entities; (4) income 
from service on advisory committees or review panels for public or 
nonprofit entities; (5) an equity interest that when aggregated for 
the Investigator and the Investigator's spouse and dependent 
children meets both of the following tests: does not exceed $10,000 
in value as determined through reference to public prices or other 
reasonable measures of fair market value, and does not represent 
more than a five percent ownership interest in any single entity; or 
(6) salary, royalties, or other payments that when aggregated for 
the Investigator and the Investigator's spouse and dependent 
children over the next twelve months, are not expected (or, in the 
case of PHS contracts, are not reasonably expected) to exceed 
$10,000. 42 CFR 50.603; 45 CFR 94.3.
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     Maintaining objectivity in research requires a commitment 
from Institutions and their Investigators to completely disclose, 
appropriately review, and robustly manage identified conflicts.
     The PHS Awarding Components \4\ are responsible for 
overseeing institutional compliance with the regulations.
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    \4\ ``PHS Awarding Component'' was defined as an organizational 
unit of the PHS that funds research that is subject to these 
regulations. 42 CFR 50.603, 45 CFR 94.3.
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    The purpose of the 1995 regulations was to ensure that there is no 
reasonable expectation that the design, conduct, or reporting of PHS-
funded research will be biased by any Investigator FCOI. Since the 
publication of the 1995 regulations, the pace by which new discoveries 
are translated from the research bench into effective treatment of 
patients has accelerated significantly, and the biomedical and 
behavioral research enterprise in the United States has grown in size 
and complexity. For example, an analysis of financial support of 
biomedical research from 1994 to 2004 \5\ showed that funding increased 
from $37.1 billion in 1994 to $94.3 billion in 2003. Fifty seven 
percent of the funding in 2003 came from industry sources. At the same 
time, relationships between individual academic researchers and 
industry have also increased from 28% in a 1996 survey \6\ to 52.8% in 
a survey conducted in 2007.\7\ Researchers frequently work in 
multidisciplinary teams to develop new strategies and approaches for 
translating basic research into clinical application, thus hastening 
discovery and advancing human health. In addition, these newer 
translational strategies often involve complex collaborations between 
Investigators and the private sector.
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    \5\ Moses H et al., JAMA; 2005;294:1333-1342.
    \6\ Blumenthal D et al., N Engl J Med; 1996; 335:1734-9.
    \7\ Zinner DE et al., Health Aff; 2009;28:1814-25.
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    Recent studies from several sources have also highlighted the 
increasing complexity of the financial relationships

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between biomedical researchers and industry and the possible 
ramifications of those relationships. For example, a 2008 report by the 
Association of American Medical Colleges and the Association of 
American Universities (AAMC/AAU) \8\ states: ``The promises of 
translational research, the challenges of technology transfer, and 
intense expectations at all levels of government that universities and 
their academic medical centers function as engines of socio-economic 
development generate new pressures on institutions and their faculty 
members to expand their relationships and deepen their engagement with 
industry. These relationships, now encouraged in many forms, may 
involve financial linkages that are entirely benign but will in other 
cases carry the potential to create serious conflicts of interest. 
Moreover, these financial ties are occurring in a context of 
dramatically increased public sensitivity to and concern with 
allegations of financial conflicts of interest more broadly in 
university business transactions and across diverse sectors of 
industry.'' A recent study of the Institute of Medicine (IOM) on 
Conflict of Interest in Medical Research, Education, and Practice 
states: ``Physicians and researchers must exercise judgment in complex 
situations that are fraught with uncertainty. Colleagues, patients, 
students, and the public need to trust that these judgments are not 
compromised by physicians' or researchers' financial ties to 
pharmaceutical, medical device, and biotechnology companies. Ties with 
industry are common in medicine. Some have produced important benefits, 
particularly through research collaborations that improve individual 
and public health. At the same time, widespread relationships with 
industry have created significant risks that individual and 
institutional financial interests may unduly influence professionals' 
judgments about the primary interests or goals of medicine. Such 
conflicts of interest threaten the integrity of scientific 
investigations, the objectivity of medical education, and the quality 
of patient care. They may also jeopardize public trust in medicine.'' 
\9\ A 2009 report from the HHS Office of Inspector General (OIG) stated 
``Vulnerabilities exist at grantee institutions regarding conflicts.'' 
\10\
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    \8\ Protecting Patients, Preserving Integrity, Advancing Health: 
Accelerating the Implementation of COI Policies in Human Subjects 
Research, A Report of the AAMC-AAU Advisory Committee on Financial 
Conflicts of Interest in Human Subjects Research, February 2008 p1.
    \9\ Lo, B & Field, M.J. (Eds.). (2009) Conflict of interest in 
medical research, education, and practice. Washington, DC: National 
Academies Press. p2.
    \10\ HHS OIG report OEI-03-07-00700 ``How Grantees Manage 
Financial Conflicts of Interest in Research Funded by the National 
Institutes of Health'', November 2009 p12.
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    The growing complexity of biomedical and behavioral research; the 
increased interaction among Government, research Institutions, and the 
private sector in attaining common public health goals while meeting 
public expectations for research integrity; as well as increased public 
scrutiny, all have raised questions as to whether a more rigorous 
approach to Investigator disclosure, institutional management of 
financial conflicts, and Federal oversight is required. HHS decided to 
explore the need for revisions to the 1995 regulations by publishing an 
Advance Notice of Proposed Rulemaking on May 8, 2009 (74 FR 21610, 
hereafter ``the ANPRM'').
    After analyzing public comments, HHS published a Notice of Proposed 
Rulemaking (75 FR 28688, hereafter ``the NPRM'') on May 21, 2010, to 
amend the 1995 regulations by expanding and adding transparency to 
Investigators' disclosure of SFIs, enhancing regulatory compliance and 
effective institutional oversight and management of Investigators' 
financial conflicts of interests, as well as HHS' compliance oversight.
    Major changes to the 1995 regulations proposed in the NPRM 
included:
     Expanding the scope of the regulations to include SBIR/
STTR Phase I applications.
     Amending the definition of SFI to include a de minimis 
threshold of $5,000 for disclosure that generally applies to payments 
and/or equity interests as well as any equity interest in non-publicly 
traded entities.
     Excluding income from government agencies or Institutions 
of higher education for seminars, lectures, teaching, or service on 
advisory or review panels.
     Expanding Investigator disclosure requirements to include 
SFIs that are related to an Investigator's institutional 
responsibilities, with Institutions responsible for determining whether 
a disclosed SFI relates to the research for which PHS funding is sought 
and constitutes an FCOI.
     Enhancing the information on an FCOI reported by the 
Institution to the PHS Awarding Component to include the information 
required under the 1995 regulations plus the value of the financial 
interest or a statement that a value cannot be readily determined, the 
nature of the FCOI, a description of how the FCOI relates to PHS-funded 
research, and key elements of the Institution's management plan.
     Requiring that before spending funds for PHS-supported 
research, an Institution shall post on a publicly accessible Web site 
information on SFIs of senior/key personnel that the Institution 
determines are related to the PHS-funded research and constitute an 
FCOI.
    In addition to these major proposed changes, the NPRM incorporated 
minor proposed changes that reflect technical updates from the 1995 
regulations (e.g., in the reference to authority for the regulations, 
42 U.S.C. 299c-4 replaces 42 U.S.C. 299c-3, and, for the regulations 
for grants and cooperative agreements, we added section 219, Title II, 
Division D of Public Law 111-117, the Consolidated Appropriations Act 
2010), or that reflect efforts to improve the overall clarity and 
accuracy of the regulations (e.g., the title of the regulations for 
grants and cooperative agreements was changed to ``Promoting 
Objectivity in Research,'' to reinforce the ongoing nature of the 
obligations under this subpart). The final rule also incorporates such 
changes.
    On July 21, 2010, HHS published a Notice (75 FR 42362, hereafter 
``the Extension Notice'') extending the 60 day comment period for the 
NPRM by another 30 days and seeking comment on whether HHS should 
clarify its authority to enforce compliance with the regulations by 
Institutions and Investigators, and whether HHS should clarify how the 
regulations apply in circumstances in which an Investigator or a PHS-
funded research project transfers from one Institution to another.

II. Discussion of General Public Comments

    During the 90 day comment period that ended on August 19, 2010, we 
received 136 unique comments on the NPRM and the Extension Notice. Many 
respondents were generally supportive of the overall goal of promoting 
objectivity in biomedical research. A few cited the importance of such 
objectivity in maintaining the public's and particularly patients' 
trust in treatments, drugs and devices that result from PHS-funded 
biomedical research. Responses to comments in this section are of a 
general nature while comments on specific provisions of the NPRM are 
addressed in the next section.

Balancing the Benefits of Relationships With Industry and Possible 
Conflicts of Interest

    As stated by several respondents, it is important to emphasize that 
translating

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basic research into clinical application is critical for advancing 
human health, and this process requires fruitful collaborations among 
government, academia, and industry. Some respondents were concerned 
that the revisions to the regulations will have a negative effect on 
these collaborations and on the translation of research into cures. We 
want to emphasize that the revisions are not designed to prevent or 
hinder relationships among government, academia, and industry. Rather, 
the revisions are aimed at facilitating such relationships by 
increasing transparency and accountability so that the resulting 
research is considered objective and in the interest of the public.
    Some respondents were concerned that there has not been sufficient 
research to document an adverse impact of FCOI on the integrity of PHS-
funded research, which makes it difficult to substantiate the 
effectiveness of the proposed measures, and in particular, one 
commenter questioned the citation of a specific article in the NPRM 
(``the Wazana paper'') in that regard. While we did not cite a paper by 
that author in the NPRM, we understand the limitations of the research 
on this topic. The 1995 regulations were aimed at preventing bias in 
PHS-funded research, and as such, were intended to be proactive rather 
than reactive to specific evidence of bias. Nonetheless, over the past 
few years, there have been several specific allegations of bias among 
PHS-funded researchers reported in the press. This has led to increased 
public concern, as evidenced by statements and correspondence from 
members of Congress and the language in the Department of Health and 
Human Services Appropriations Act, 2010, to amend the 1995 regulations 
``for the purpose of strengthening Federal and institutional oversight 
and identifying enhancements * * *.'' \11\ And as mentioned above, the 
2009 OIG report: How Grantees Manage Financial Conflicts Of Interest in 
Research Funded by the National Institutes of Health found that 
``Vulnerabilities exist in grantee Institutions' identification, 
management, and oversight of financial conflicts of interest.'' It is 
vital that the public have confidence in the objectivity of PHS-funded 
research. The revised regulations, with their emphasis on increasing 
transparency and accountability, as well as providing additional 
information to the PHS Awarding Component, are aimed at doing just 
that.
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    \11\ Sec. 219, Tit. II, Div. D, Pub. L. 111-117
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    Other respondents requested that, given the complexity of the 
issues related to management of Investigator FCOI, HHS fund research to 
address issues related to the implementation of these regulations. As 
part of our oversight activities, NIH has developed and conducted a 
number of initiatives and site visits to evaluate institutional FCOI 
policies for compliance with the Federal regulations and has publicized 
on-line ``Lessons Learned.'' NIH found that the most common compliance 
issues center around the appropriate definition of ``Investigator'' and 
Institutional reporting requirements. NIH observed that there was some 
confusion about receiving disclosures from Investigators who join a 
project after it has begun, and identifying and reporting FCOI during 
the project period. Site visits also reaffirmed that education is key 
in ensuring that Investigators comply with the FCOI requirements by 
understanding their responsibilities in the process. Therefore, in 
light of these observations, the definition of ``Investigator'' has 
been revised in the final rule to emphasize that Institutions should 
consider the roles of those involved in research and the degree of 
independence with which those individuals work.
    In addition, the final rule includes a new requirement for 
Institutions to require each Investigator to complete training related 
to the FCOI and/or other FCOI-related requirements at least every four 
years or immediately under designated circumstances. Information and 
other resources developed by NIH, which will be updated as appropriate, 
are available as resources for the new regulatory training requirement 
and can be accessed through the NIH Web site's Financial Conflict of 
Interest page at http://grants.nih.gov/grants/policy/coi/.
    Several respondents requested that the revised regulations apply 
only to new or competing PHS awards and newly identified FCOIs. We note 
that many PHS grants, cooperative agreements, and contracts continue 
for several years and, particularly in the case of grants and 
cooperative agreements, a new award can be made every year. Therefore, 
the revised regulations will apply to each grant or cooperative 
agreement with an issue date of the Notice of Award that is subsequent 
to the compliance dates of the final rule (including noncompeting 
continuations) and to solicitations issued and contracts awarded 
subsequent to the compliance dates of the final rule that are for 
research. Through their policies, Institutions may choose to apply the 
revised regulations to all active PHS awards. For example, Institutions 
may choose, in their FCOI policy, to implement the regulations on a 
single date on all PHS-funded awards rather than implementing the 
regulations sequentially on the specific award date of each individual 
project.

Beyond Financial Conflicts of Interest

    A few respondents suggested that the regulations should also 
address non-financial conflicts of interest. While we acknowledge that 
non-financial conflicts of interest can influence the scientific 
process, we chose to retain the focus of these regulations on FCOIs 
because we believe this is a discrete area in which there is a 
heightened need to strengthen management and oversight. In addition, 
legal authority for the regulations references FCOI specifically, e.g. 
42 U.S.C. 289b-1.
    One respondent suggested that the regulations be revised to 
restrict recipients of PHS-funded research from entering into 
agreements that contain a provision restricting the Investigator's 
ability to speak, publish, or otherwise undertake activities contrary 
to a company's commercial interest. Although we believe this action 
would go beyond the scope of these regulations, we note that as stated 
in the HHS and NIH Grants Policy Statements (http://www.ihs.gov/nonMedicalPrograms/gogp/documents/HHS%20Grants%20Policy%20Statement.pdf 
and http://grants.nih.gov/grants/policy/nihgps_2010/nihgps_ch8.htm#_Toc271264951, respectively), we believe that sharing final research 
data and other research tools produced or developed by Investigators 
under PHS-funded grants, such as cell lines, certain types of animals 
(e.g., transgenic mice), and computer programs, is essential for 
expedited translation of research results into knowledge, products, and 
procedures to improve human health. We endorse the sharing of final 
research data and research tools to serve these and other important 
scientific goals, and we support the timely release and sharing of 
final research data and research tools from PHS-supported studies for 
use by other researchers.

General Comments on Contracts

    One respondent was concerned that by revising the regulations, it 
appears that HHS is modifying the Public Health Service Act. We want to 
clarify that, through this final rule, HHS has revised regulations 
promulgated under the Public Health Service Act, not modified the 
Public Health Service Act itself. The same respondent also believed 
that ``the PHS Acquisition Regulations were abolished and contents 
(PHSAR 380--care of lab animals, human subjects and Indian self 
determination) were folded into HHSAR (approx 1998),'' leading the

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respondent to question whether the regulations set forth in 45 CFR part 
94 remain ``in force.'' This concern is unfounded; the regulations at 
45 CFR part 94 remain in effect in addition to, and not in conflict 
with, the HHS Acquisition Regulation (HHSAR) codified at 48 CFR part 
301 et seq. Additionally, the respondent questioned the authority of 
NIH/PHS/HHS ``to set HHS acquisition policy.'' As noted in the final 
rule promulgating the 1995 regulations, published on July 11, 1995 (60 
FR 132), the PHS and the Office of the Secretary are acting in 
accordance with the legislative directive in 42 U.S.C. 289b-1(a). We 
have also declined this respondent's suggestion to place the revisions 
to the regulations at 45 CFR part 94 in the HHSAR; the revisions 
expressly pertain to the regulations at 45 CFR part 94 and not to 48 
CFR part 301 et seq.
    Another respondent suggested that there is a need to develop a 
specific HHSAR provision and/or standard language in the Request for 
Proposals (RFP) regarding the requirement of certification by the 
contractor in the regulations. We disagree; 45 CFR 94.4(k) provides 
standard language that is appropriate for each contract proposal 
subject to these regulations.
    Another respondent suggested that contractors should be exempt from 
the regulatory requirements to disclose or report FCOIs, because the 
respondent believes that contractors are acting as independent vendors 
and the Institution has no effective means of monitoring their 
compliance with the policy. We disagree with this comment. All Federal 
contractors are required to have an effective means of complying with 
the terms and conditions of their contract, including regulatory 
obligations designed to promote objectivity in PHS-funded research. The 
regulation specifically provides for enforcement of these obligations, 
stating at 94.6(b) that ``* * * the PHS Awarding Component may decide 
that a particular financial conflict of interest will bias the 
objectivity of the PHS-funded research to such an extent that further 
corrective action is needed or that the Institution has not managed the 
financial conflict of interest in accordance with this part. The PHS 
Awarding Component may determine that issuance of a Stop Work Order by 
the Contracting Officer or other enforcement action is necessary until 
the matter is resolved.''
    One respondent stated that the language under 45 CFR part 94 is 
confusing because it refers to ``applications for research,'' and 
``awarding component'' which seem more like grant terms than contract 
terms; additionally, the respondent noted that the language is 
inconsistent with HHS regulations which refer to OPDIVs or Agencies. We 
appreciate the opportunity to clarify that the regulations at 45 CFR 
part 94 apply to Institutions that solicit or receive PHS research 
funding by means of a contract for research, as distinguished from the 
regulations at 42 CFR part 50 subpart F which are applicable to 
Institutions that apply for or receive PHS research funding by means of 
a grant or cooperative agreement. The revised regulations under 45 CFR 
part 94 do not include any references to (grant) applications, but 
rather to contract proposals. Furthermore, the references to ``awarding 
component'' in 45 CFR part 94 are appropriate in the context of 
research contracts, and such references are not inconsistent with 
references to ``OPDIVs or Agencies'' in the HHSAR. These terms have a 
similar meaning, though the HHSAR applies to all operating divisions 
within HHS, whereas 45 CFR part 94 only applies to the Public Health 
Service of HHS.
    Another respondent expressed concern about inconsistency between 
the requirements under 45 CFR part 94 and the treatment of 
organizational conflicts of interest (OCIs) by the Federal Acquisition 
Regulation (FAR), Subpart 9.5. We are not aware of any direct 
conflict(s) between the two sets of regulations at this time; 45 CFR 
part 94 focuses on financial conflicts of interest of Investigators, 
whereas Subpart 9.5 of the FAR focuses on organizational conflicts of 
interest. In response to a related question by the same respondent, we 
note that neither 45 CFR part 94 nor Subpart 9.5 of the FAR require 
coordination with legal counsel on conflict of interest issues. The FAR 
provides only in Part 9.504(b) that ``Contracting officers should 
obtain the advice of counsel'' in consideration of OCIs. The use of the 
word ``should'' suggests that this step is a matter of policy, and not 
a legal requirement. To address a final concern by the same respondent, 
we note that the de minimis reporting level of $5,000 does not imply 
that no conflict under that amount exists; as discussed further below, 
that amount is used only as a monetary threshold for the definition of 
reportable SFIs under 45 CFR part 94.

General Comments on Cost and Burden

    Several respondents suggested that the analysis of the impact of 
the proposed revisions in the NPRM underestimated the burden and cost 
of implementation, particularly regarding the potential number of 
Investigators, SFI disclosures, and FCOI reports. By publishing both an 
ANPRM and an NPRM, we have endeavored to involve the community and 
carefully consider the public's concerns. This final rule incorporates 
our best efforts to balance the increased burden that results from any 
regulatory action with the need to respond to demands for greater 
transparency and accountability from the public and Congress, including 
a legislative mandate [Pub. L. 111-117, Div. D, Tit. II, sec. 219, 123 
Stat. 3034 (2009)]. We will evaluate the effect of provisions of the 
regulations such as the de minimis and the public accessibility 
requirement within three years after implementation of the final rule.
    Our burden estimates were based on the current pool of PHS-funded 
Investigators as well as our experience with FCOI reports under the 
1995 regulations. We note that the revised definition of Investigator 
is not significantly different from that in the 1995 regulations; 
therefore, the number of Investigators should not change substantially. 
We recognize that the scope of Investigator SFI disclosures, if not the 
actual numbers, will increase under the revised regulations, and that 
the number of FCOI reports may increase as well. We made a good faith 
estimate in the NPRM as to the extent of these increases. Nonetheless, 
we have taken these comments into consideration as we revised the 
Regulatory Impact Analysis in section V to accommodate the content of 
this final rule. Specifically, we have increased the estimated time for 
Institutions to adapt NIH training materials to incorporate their 
policies, the time for Investigator disclosures and updates, and the 
time for reviewing disclosures. We also added an estimated time for 
completing a retrospective review, and clarified that the time 
estimated for Institutions to monitor Investigator compliance with a 
management plan in the NPRM was calculated on a monthly rather than 
annual basis.
    In addition, several respondents objected to the statement in the 
NPRM that the cost of implementing the amended regulations is an 
allowable cost eligible for reimbursement as a Facilities and 
Administrative cost on PHS-supported grants, cooperative agreements, 
and contracts, citing limitations in these reimbursements. We recognize 
that in some instances current cost principles may limit an 
Institution's ability to recover costs under the Facilities and 
Administrative cost mechanism. However, this does not render those 
costs ineligible for recovery.

[[Page 53260]]

General Comments on Implementation

    Several respondents suggested that HHS provide assistance to 
Institutions for the implementation of new policies and procedures to 
comply with the revised regulations. HHS recognizes the need to support 
implementation and is developing implementation guidance, which may 
include, for example, Frequently Asked Questions and other updates to 
NIH's Financial Conflicts of Interest Web site, http://grants.nih.gov/grants/policy/coi/. General inquires about the FCOI regulations, and 
requests to consider additional assistance efforts, may be directed to: 
[email protected].
    Many respondents requested that the implementation of the revised 
regulations be staggered and proposed time periods ranging from one to 
five years. In particular, respondents suggested that the 
implementation of the public accessibility requirement in 42 CFR 
50.605(a)(5) and 45 CFR 94.5(a)(5) should be postponed to October 2013 
to coincide with the disclosure provisions under Title VI, Section 
6002, of the recently enacted Patient Protection and Affordable Care 
Act, Public Law 111-148 (hereafter, Affordable Care Act \12\). We agree 
that it is important to balance the desire to implement the revised 
regulations as soon as possible with the need to provide sufficient 
time for Institutions and Investigators to comply. We have done so by 
providing a compliance date of up to 365 days from publication of this 
final rule, as described in the Dates section above. We considered a 
staggered approach but thought this would create added burden for 
Institutions and Investigators, and confusion for the public.
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    \12\ The Patient Protection and Affordable Care Act (the 
Affordable Care Act), Public Law 111-148, was enacted on March 23, 
2010; the Health Care and Education Reconciliation Act (the 
Reconciliation Act), Public Law 111-152, was enacted on March 30, 
2010. The Affordable Care Act and the Reconciliation Act reorganize, 
amend, and add to the provisions of part A of title XXVII of the 
Public Health Service Act.
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    One respondent suggested that we assemble an advisory board of 
administrators at Institutions to assist in our deliberations in 
drafting the final rule. We encouraged all stakeholders including 
Institutions to submit comments to the ANPRM and to the NPRM; such 
comments have been instrumental to our deliberations. Additionally, we 
convened a committee of NIH/HHS staff with expertise in different types 
of research funded by the PHS to consider the comments to the NPRM and 
the ANPRM.
    A few respondents suggested that we postpone revising the 
regulations and conduct additional discussion with the research 
community. Again, we note that by publishing both an ANPRM and an NPRM, 
and by encouraging public comment through public outreach initiatives, 
we have involved the community throughout this process, and we have 
carefully considered the comments that have been raised.

III. Discussion of Public Comments Related to Specific Provisions of 
the Revised Regulations

    Public comments regarding revisions to specific provisions of the 
1995 regulations are summarized below, along with a description of HHS' 
deliberations and any change made to the final rule in response to the 
comments.

Purpose (42 CFR 50.601; 45 CFR 94.1)

    As proposed in the NPRM,\13\ we have made minor revisions to this 
section to improve internal consistency with regard to the use of 
various terms and phrases throughout the regulations. One respondent 
questioned the removal of the words ``to ensure'' in the reference to 
standards that provide a reasonable expectation that the design, 
conduct, and reporting of research funded under PHS grants or 
cooperative agreements is free from bias resulting from Investigator 
FCOI. We have implemented our proposed language, which focuses on the 
phrase ``reasonable expectation,'' because we believe it sets a more 
accurate and realistic objective for the regulations; as another 
respondent noted, it can be perceived as unrealistic from an 
enforcement perspective to ``ensure'' the elimination of bias. The 
respondent also suggested replacing the phrase ``design, conduct, or 
reporting of research'' with ``design, conduct, analysis, management, 
administration, reporting, and distribution of research'' throughout 
the rule. We have not made this change, because we believe that 
``design, conduct or reporting'' covers the major responsibilities 
related to the PHS-funded research and that the term ``conduct'' 
encompasses many of the additional terms suggested by the respondent.
---------------------------------------------------------------------------

    \13\ 75 FR 28689 (May 21, 2010).
---------------------------------------------------------------------------

Applicability (42 CFR 50.602, 45 CFR 94.2)

    The 1995 regulations were applicable to each Institution that seeks 
or receives PHS funding for research and, through implementation of the 
regulations by each Institution, to each Investigator participating in 
such research.\14\ However, the 1995 regulations excluded SBIR/STTR 
Phase I applications because of the expectation that such applications 
``are for limited amounts.'' \15\ As we discussed in the NPRM, since 
1995 the size of these awards has increased, such that the amounts 
constitute a significant expenditure of public funds. For example, the 
median amount of an NIH Phase I award increased from approximately 
$99,000 in 1995 to approximately $182,000 in 2009. Therefore, we 
proposed in the NPRM to include SBIR/STTR Phase I applications in the 
revised regulations.
---------------------------------------------------------------------------

    \14\ Consistent with the 1995 regulations, in those few cases 
where an individual, rather than an Institution, is an applicant for 
PHS grants or cooperative agreements for research, PHS Awarding 
Components will make case-by-case determinations on the steps to be 
taken to ensure that the design, conduct, and reporting of the 
research will not be biased by any conflicting financial interest of 
the individual.
    \15\ 60 FR 35814 (July 11, 1995).
---------------------------------------------------------------------------

    We only received a small number of comments on this component of 
the proposal. While a few respondents agreed that including these 
applications is reasonable, one respondent suggested that including 
these applicants in the final rule ``could present difficulties for 
start-up and emerging companies forced to adhere to the rule's 
extensive requirements for reporting and managing conflicts of interest 
requirements--the same rules with which large research institutions 
with substantially more resources will be complying.''
    We have taken this comment into account in our reevaluation of the 
proposed inclusion of the SBIR/STTR Phase I program and we ultimately 
determined that this change from the 1995 regulations could indeed 
create an undue burden. In particular, SBIR/STTR companies are small in 
size (eligible companies must have fewer than 500 employees, but, for 
example, the average NIH SBIR/STTR company has approximately 20 
employees and many have only 1-3 employees), and these companies tend 
to be limited in resources. Accordingly, we found the argument to be 
compelling that the investment required to comply with the regulations 
could create a disproportionate burden on small businesses. Moreover, 
approximately 56% of Phase I awardees will apply for Phase II funding, 
at which point they will be covered by the regulations. Therefore, the 
regulations will still capture the benefits of compliance from a 
significant number of these companies without imposing an undue burden 
that could create a disincentive to applicants

[[Page 53261]]

from the small business community, an important part of the biomedical 
research enterprise. For these reasons, the final rule retains the 
exemption of Phase I SBIR/STTR applications from the 1995 regulations.
    We have also implemented the NPRM's proposal to add language in 
this section clarifying that the regulations continue to apply once the 
PHS-funded research is underway (i.e., after the application process).

Definitions (42 CFR 50.603, 45 CFR 94.3)

    In the NPRM we proposed to add several new definitions, revise some 
of the existing definitions, and remove one definition. Comments and 
responses regarding the implementation of those proposed changes in the 
final rule follow:
    1. Contractor. We have implemented the NPRM's proposal to revise 
the definition of ``Contractor,'' to clarify that the term applies to 
an entity that provides property or services ``under contract'' for the 
direct benefit or use of the Federal government.
    2. Disclosure of significant financial interests. This definition 
was not included in the 1995 regulations but was proposed in the NPRM 
to mean an Investigator's disclosure of SFIs to an Institution. We have 
included this definition in the final rule--along with the definition 
of ``FCOI report'' below--because of the confusion that can result from 
the use of the terms ``disclosure'' and (FCOI) ``report.'' We intend 
for the term ``disclosure'' to capture communication from an 
Investigator to an Institution regarding SFIs, whereas the term 
``report'' captures communication from an Institution to the PHS 
Awarding Component regarding FCOI. A few respondents requested that we 
switch this definition with the one stated below (i.e., FCOI report) in 
order to align the terminology with a recent report by the AAMC/
AAU.\16\ We have not made that change because we want to minimize 
public confusion by keeping our terminology consistent with that used 
in the 1995 regulations, to the extent possible.
---------------------------------------------------------------------------

    \16\ Protecting Patients, Preserving Integrity, Advancing 
Health: Accelerating the Implementation of COI Policies in Human 
Subjects Research, A Report of the AAMC-AAU Advisory Committee on 
Financial Conflicts of Interest in Human Subjects Research, February 
2008.
---------------------------------------------------------------------------

    3. Financial conflict of interest (FCOI). We proposed this 
definition in the NPRM to mean an SFI that could directly and 
significantly affect the design, conduct, or reporting of PHS-funded 
research. Although this definition was not listed in the Definitions 
sections of the 1995 regulations, it is consistent with language 
contained in other provisions of the 1995 regulations.\17\ One 
respondent suggested that the definition be revised to mean an SFI that 
could directly or indirectly affect the design, conduct, or reporting 
of PHS-funded research. We have considered this suggestion and believe 
that including the term ``indirectly'' could create ambiguity and 
extend the definition beyond the scope of the regulations. The term 
``significantly'' in this context means that the financial interest 
would have a material effect on the research, which we believe 
appropriately fulfills the intent of the regulations, i.e., to maintain 
objectivity in PHS-funded research.
---------------------------------------------------------------------------

    \17\ 42 CFR 50.605(a) and 45 CFR 94.5(a).
---------------------------------------------------------------------------

    Some respondents requested the inclusion of specific examples to 
illustrate SFIs that could be considered FCOIs. Because conflicts of 
interest can vary according to the specific context and Institutional 
policy, we are concerned that providing examples could create public 
confusion, so we have not made that change to the final rule. Other 
respondents suggested that Institutions should consider specific 
criteria, including the stage of the research and its commercial 
potential, the proximity to possible U.S. Food and Drug Administration 
(FDA) review, and the magnitude of the potential risk, when determining 
whether an SFI is an FCOI. Although we disagree that this suggestion 
should be implemented in the regulations, we note that Institutions may 
include a variety of criteria in the review of Investigators' SFIs and 
the determination of whether they constitute an FCOI with the PHS-
funded research, including those suggested by respondents.
    4. Financial Conflict of Interest (FCOI) report. This definition 
was not included in the 1995 regulations but was proposed in the NPRM 
to mean an Institution's report of an FCOI to a PHS Awarding Component. 
We have included this definition in the final rule for the same reasons 
we have included the ``disclosure of SFIs'' definition discussed above.
    5. Financial interest. We proposed this definition in the NPRM, as 
a companion to the revision of the ``SFI'' definition, described below, 
to mean anything of monetary value or potential monetary value. Some 
respondents agreed with this definition, while others suggested that 
the phrase ``or potential monetary value'' is too broad and suggested 
the stated purpose could be achieved by the phrase: ``anything of 
monetary value, whether or not the value is readily ascertainable.'' We 
agree and have changed the language in the final rule accordingly. 
Another respondent asked if anything of ``potential monetary value'' 
would include patents or patent applications. As discussed below in the 
definition of SFI, patents and patent applications are included in the 
definition.
    6. Institution. Consistent with our proposal in the NPRM, we have 
revised the definition of ``Institution'' to refer specifically to an 
Institution that is applying for, or that receives, PHS research 
funding. A few respondents questioned whether Federal agencies should 
be excluded from this definition, as this would exclude Federal 
researchers such as NIH scientists. One requested that HHS evaluate the 
revised regulations after a period of time to assess whether Federal 
researchers (``intramural investigators'') should be included. Federal 
agencies and their employees are subject to conflicts of interest 
requirements, including disclosure by employees and review by agencies, 
pursuant to Federal criminal statutes, the Ethics in Government Act as 
amended, and supplemental agency regulations. Accordingly, we have 
retained the exclusion of Federal agencies in this definition.
    7. Institutional responsibilities. We proposed this definition in 
the NPRM to mean an Investigator's professional responsibilities on 
behalf of the Institution including, but not limited to, activities 
such as research, research consultation, teaching, professional 
practice, institutional committee memberships, and service on panels 
such as Institutional Review Boards or Data and Safety Monitoring 
Boards. Some respondents requested that this definition be clarified to 
specify that the Investigator's responsibilities are defined by the 
Institution. We agree and have modified the definition accordingly to 
make clear that the Institution defines the Investigator's 
responsibilities in its policy on financial conflicts of interests. One 
respondent suggested that the list of examples should be expanded. In 
light of the change to the regulatory text noted above, and because the 
definition indicates that the list is not exhaustive, we have not made 
further changes.
    8. Investigator. Consistent with our proposal in the NPRM, we have 
revised the definition of ``Investigator'' to clarify that it means the 
Project Director/Principal Investigator (PD/PI) as well as any other 
person, regardless of title or position, who is responsible for the 
design, conduct, or reporting of research funded by the PHS, or 
proposed for

[[Page 53262]]

such funding, which may include, for example, collaborators or 
consultants.. Several respondents suggested that this definition is 
overly broad and will result in disclosures from people who are only 
peripherally associated with the PHS-funded research. We note that the 
definition is not substantially different from the definition in the 
1995 regulations \18\ and is consistent with regulatory guidance that 
NIH has issued (e.g., see ``Investigator-Specific Questions'' section 
of NIH's ``Frequently Asked Questions'' resource at http://grants.nih.gov/grants/policy/coifaq.htm). In response to questions 
about whether this definition includes unfunded collaborators, we note 
that the definition refers to the function of the individual on the 
PHS-funded project; i.e., his/her responsibility for the design, 
conduct, or reporting of the PHS-funded research, and not to his/her 
title or the amount or source of remuneration.
---------------------------------------------------------------------------

    \18\ 42 CFR 50.603 and 45 CFR 94.3.
---------------------------------------------------------------------------

    Other respondents suggested the definition should be expanded to 
include other types of activities, or to include people in a position 
to influence the design, conduct, or reporting of the research. We have 
retained the focus of the definition on Investigators who are 
responsible for the design, conduct, or reporting of research for the 
reasons discussed above.
    Consistent with our proposal in the NPRM, we have also eliminated 
the reference to the Investigator's spouse and dependent children in 
this definition, as we believe that such reference is more appropriate 
to include in the SFI definition, below.
    9. Key personnel. In parallel to the use of the term ``senior/key 
personnel'' in making FCOI information publicly accessible for research 
grants and cooperative agreements under 42 CFR 50.605, the term ``key 
personnel'' is used for research contracts under 45 CFR 94.5. 
Therefore, we thought it would be useful to include a separate 
definition for this term in the final rule, to clarify the exact 
meaning: the PD/PI and any other personnel considered to be essential 
to work performance in accordance with HHSAR subpart 352.242-70 and 
identified as key personnel in the contract proposal and contract.
    10. Manage. We proposed this definition in the NPRM to mean taking 
action to address an FCOI, which includes reducing or eliminating the 
FCOI, to ensure that the design, conduct, and reporting of research 
will be free from bias or the appearance of bias. Consistent with our 
discussion in the NPRM, we have included a modified version of this 
definition in the final rule as part of a wider reconsideration of the 
concepts of managing, reducing, and eliminating an FCOI. In the 1995 
regulations, these concepts were typically listed separately; \19\ 
suggesting that reducing or eliminating an FCOI may not be the same as 
managing an FCOI. We believe that it is more appropriate to consider 
the reduction or elimination of an FCOI as alternate means of managing 
an FCOI, depending on the circumstances.
---------------------------------------------------------------------------

    \19\ 42 CFR 50.605(a) and 45 CFR 94.5(a).
---------------------------------------------------------------------------

    This revision is not intended, as suggested by one respondent, to 
imply that reduction or elimination is the only acceptable means of 
managing an FCOI. To address this concern, we have changed the 
definition in the final rule to read ``* * * to take action to address 
a financial conflict of interest, which can include reducing or 
eliminating the financial conflict of interest * * *'' Another 
respondent agreed with the definition, while a third thought it should 
be expanded to include activities beyond the design, conduct, or 
reporting of research and to state that the ultimate goal is 
elimination. Another respondent thought that certain types of SFIs 
should be specified as requiring elimination or reduction. In response 
to these related comments, we want to clarify that we do not intend to 
imply that every FCOI must be eliminated; the goal of the regulations 
is to ensure appropriate management so as to maintain objectivity of 
the research. Additionally, as discussed above, we believe ``design, 
conduct, or reporting'' covers the major responsibilities related to 
the PHS-funded research, so we have not expanded the scope of the 
definition. One respondent suggested that ``ensure'' is impossible to 
enforce. To address this concern, we have included the phrase ``to the 
extent possible'' in the definition. Finally, respondents suggested the 
deletion of the phrase ``appearance of bias.'' We have made this 
change, as we agree that this phrase can be interpreted as overly broad 
and ambiguous.
    11. PD/PI. We proposed this definition in the NPRM to mean a 
Project Director or Principal Investigator of a PHS-funded research 
project. In the final rule, to improve clarity, we have noted that the 
PD/PI is included in the definition of senior/key personnel in 42 CFR 
50.603, and in the definition of key personnel in 45 CFR 94.3.
    12. PHS. Consistent with our proposal in the NPRM, we have revised 
the definition of ``PHS'' to include a specific reference to NIH in 
order to clarify that Institutions applying for, or receiving, research 
funding from NIH are subject to the regulations. This language remains 
unchanged from that proposed in the NPRM; however, as a technical 
correction to improve clarity and accuracy, we have deleted the 
reference to ``an operating division.''
    13. Research. Consistent with our proposal in the NPRM, we have 
revised the definition of ``research'' to include a non-exhaustive list 
of examples of different types of PHS funding mechanisms to which the 
definition applies. As revised, the definition under 42 CFR 50.603 
includes any activity for which research funding is available from a 
PHS Awarding Component through a grant or cooperative agreement, 
whether authorized under the PHS Act or other statutory authority, such 
as a research grant, career development award, center grant, individual 
fellowship award, infrastructure award, institutional training grant, 
program project, or research resources award. The definition under 45 
CFR 94.3 includes any activity for which research funding is available 
from a PHS Awarding Component through a contract, whether authorized 
under the PHS Act or other statutory authority. We also added the terms 
``study or experiment'' to enhance clarity. A few respondents requested 
that the definition exclude certain types of grants such as those for 
educational activities, training, or construction. We note that PHS 
funds a wide variety of award types and there may be some research 
components within award types that are not specifically labeled 
``research'' awards. It is important that the information on SFI 
related to such activities be provided to the Institution for 
evaluation of the relatedness to PHS-funded research and the 
possibility of an FCOI. Therefore, we believe it would not be prudent 
to limit the types of PHS-funded research activities that are subject 
to these regulations and we did not make this change.
    One respondent suggested the addition of examples for the term 
``product development'' in the definition. We agree that this is useful 
and have added the examples of product development (a diagnostic test 
or drug) and of products of basic and applied research (a published 
article, book, or book chapter). Another respondent suggested that 
reference to the regulations be included in specific Requests for 
Applications or Requests for Proposals to clarify exactly when the 
regulations are applicable. We believe this comment is addressed by the 
general provision of Web links to and citations of applicable policy

[[Page 53263]]

requirements and terms and conditions of awards on Notices of Award for 
all PHS funded grants and cooperative agreements and in all contracts 
awarded by the PHS that are for research.
    14. Senior/key personnel. The NPRM uses this term in the proposal 
and discussion of the management and posting of FCOI under 42 CFR 
50.605. Therefore, we thought it would be useful to include a separate 
definition for this term in the final rule, to clarify the exact 
meaning: the PD/PI and any other person who the Institution identifies 
as senior/key personnel in the grant application progress report, and 
any other report submitted to the PHS by the Institution under this 
subpart. This definition is in parallel to that of the term ``key 
personnel'' used in making FCOI information publicly accessible for 
research contracts under 45 CFR 94.5.
    15. Significant Financial Interest. In the NPRM, we proposed to 
revise substantially the SFI definition,\20\ incorporating the proposed 
definitions of ``financial interest'' and ``institutional 
responsibilities'' described above. Below is a discussion of public 
comments related to the implementation of these changes, using the 
categories referenced in the NPRM to highlight differences from the 
1995 regulations.\21\
---------------------------------------------------------------------------

    \20\ 75 FR 28705 (May 21, 2010).
    \21\ Under the 1995 regulations, an SFI means anything of 
monetary value, including but not limited to, salary or other 
payments for services (e.g., consulting fees or honoraria); equity 
interests (e.g., stocks, stock options or other ownership 
interests); and intellectual property rights (e.g., patents, 
copyrights and royalties from such rights). The term does not 
include: (1) Salary, royalties, or other remuneration from the 
applicant Institution; (2) any ownership interests in the 
Institution, if the Institution is an applicant under the SBIR/STTR 
programs; (3) income from seminars, lectures, or teaching 
engagements sponsored by public or nonprofit entities; (4) income 
from service on advisory committees or review panels for public or 
nonprofit entities; (5) an equity interest that when aggregated for 
the Investigator and the Investigator's spouse and dependent 
children meets both of the following tests: does not exceed $10,000 
in value as determined through reference to public prices or other 
reasonable measures of fair market value, and does not represent 
more than a five percent ownership interest in any single entity; or 
(6) salary, royalties, or other payments that when aggregated for 
the Investigator and the Investigator's spouse and dependent 
children over the next 12 months, are not expected (or, in the case 
of PHS contracts, are not reasonably expected) to exceed $10,000.
---------------------------------------------------------------------------

    Institutional responsibilities: Some respondents suggested that the 
disclosure requirement in the 1995 regulations,\22\ i.e., SFIs that 
Investigators deem related to the PHS-funded research, is sufficient. 
We note that the NPRM's proposal to expand the definition of SFI was 
influenced by the suggestions of many respondents to the ANPRM who 
supported this change. A few respondents agreed that expanding SFIs 
subject to disclosure by an Investigator to an Institution to include 
those that reasonably appear to be related to the Investigator's 
``institutional responsibilities'' is warranted. Many others, however, 
suggested that the SFIs to be disclosed should be limited to those that 
reasonably appear to be related to the Investigator's ``research 
responsibilities.'' We have considered this suggestion and believe that 
since the definition of ``research responsibilities'' is not clear-cut, 
this change would once again place the responsibility on the 
Investigator for deciding which SFIs should be disclosed to the 
Institution (similar to the 1995 regulations) and may not provide the 
Institutions with the full complement of information needed to evaluate 
the potential for FCOI. For example, an Investigator is on the board of 
a pharmaceutical company and believes that this service draws on the 
Investigator's clinical expertise rather than research knowledge. If 
the SFI definition is confined to ``research responsibilities'', the 
Investigator may not disclose the income from this activity to the 
Investigator's Institution. Such income definitely would fall under 
``institutional responsibilities'', however, as the Investigator is on 
the clinical faculty of the Institution.
---------------------------------------------------------------------------

    \22\ 42 CFR 50.604(c)(1) and 45 CFR 94.4(c)(1)
---------------------------------------------------------------------------

    Moreover, we note that the scope of activities that need to be 
disclosed by the Investigator is limited by the fact that the SFI 
definition excludes income from seminars, lectures, or teaching 
engagements sponsored by a Federal, state, or local government agency, 
an Institution of higher education as defined at 20 U.S.C. 1001(a), an 
academic teaching hospital, a medical center, or a research institute 
that is affiliated with an Institution of higher education; or income 
from service on advisory committees or review panels for a Federal, 
state, or local government agency, an Institution of higher education 
as defined at 20 U.S.C. 1001(a), an academic teaching hospital, a 
medical center, or a research institute that is affiliated with an 
Institution of higher education.
    One respondent proposed that the regulations specify particular 
relationships and types of interests that should be disclosed. We have 
considered this suggestion and believe that limiting the scope of SFIs 
that an Investigator is required to disclose to his or her Institution 
may exclude SFIs in activities that have the potential to affect the 
objectivity of PHS-funded research. Therefore, we have retained the 
language proposed in the NPRM.
    One respondent suggested that PHS funding could change an 
Investigator's institutional responsibilities and suggested that SFI 
disclosures should be based on the anticipated responsibilities if 
funding is awarded. We have not changed the regulations in this regard, 
because we believe this concern would be addressed by the Institution's 
FCOI policy; i.e., any time there is a significant change in an 
Investigator's institutional responsibilities (whether in relation to 
PHS funding or not), Institutions should consider whether this would 
require the Investigator to update his or her SFI disclosures.
    Other respondents questioned whether specific types of income, such 
as clinical work within private or university practice or teaching a 
craft, would need to be disclosed. Income from any activity that is 
related to the Investigator's institutional responsibilities as defined 
by the Institution that meets the monetary threshold must be disclosed. 
Another suggested that payment related to the accrual of patients to 
clinical trials should be included in the definition. If the individual 
receiving the payment meets the definition of ``Investigator'' under 
the regulations, such payment would be included in the SFI definition 
and should be disclosed.\23\
---------------------------------------------------------------------------

    \23\ Alternatively, if the commenter is concerned about 
(improper) payment to an Institution under these circumstances, we 
note that institutional conflicts of interest are addressed in 
section IV of this final rule.
---------------------------------------------------------------------------

    Monetary threshold: Respondents submitted a wide range of comments 
on the monetary threshold proposed in the NPRM. Some supported the 
$5,000 threshold; others suggested that the threshold of $10,000 in the 
1995 regulations should be retained; and many suggested that the 
threshold be lowered even further to $100 or zero. We have considered 
all the comments and we believe that the $5,000 threshold proposed in 
the NPRM provides the appropriate balance between the administrative 
burden associated with disclosure and review of SFIs and the intended 
benefit in promoting objectivity in research.
    Some respondents requested that the disclosure thresholds be 
harmonized with those of other Federal agencies such as the FDA and the 
National Science Foundation or with the disclosure provisions of the 
Affordable Care Act. While there may be some similarity in intent, the 
numerous disclosure requirements of other Federal laws, regulations, or 
policies are not necessarily comparable to those

[[Page 53264]]

specified in these regulations. For example, Title VI, Section 6002 of 
the Affordable Care Act requires disclosure by the entities providing 
the payment. FDA, for purposes of financial disclosure by clinical 
investigators, has defined significant payment of other sorts as 
payments made by the sponsor of a covered study to the investigator or 
the institution to support activities of the investigator that have a 
monetary value of more than $25,000, exclusive of the costs of 
conducting the clinical study or other clinical studies.\24\ Due to the 
extent of potential differences in the nature, scope, and applicability 
of Federal disclosure requirements, we do not agree that it is feasible 
to harmonize all requirements at this time, although we believe these 
regulations could serve as a basis for ongoing collaboration and 
coordination regarding the topic of conflicts of interest.
---------------------------------------------------------------------------

    \24\ 21 CFR 54.2(f).
---------------------------------------------------------------------------

    Other respondents suggested that different disclosure thresholds 
should be instituted for research depending on whether it involves 
human participants, drugs, or devices. As discussed in the NPRM, we 
posed a number of questions in the ANPRM on the issue of whether the 
regulations should be amended to require specific approaches related to 
certain types of research or alternatively, specific types of financial 
interests or FCOI.\25\ The majority of the respondents to the ANPRM 
thought that this approach would not account for the full range of 
research projects as well as the large variation in circumstances in 
which FCOI may arise. We agree and note that the monetary threshold is 
the same regardless of the type of research, financial interest, or 
identified FCOI at issue.
---------------------------------------------------------------------------

    \25\ 74 FR 21612 (May 8, 2009).
---------------------------------------------------------------------------

    Timing: The NPRM proposed to change the timing for determining 
whether remuneration represents an SFI. The 1995 regulations excluded 
aggregated payments (including salary and royalties) that are ``not 
expected to exceed'' (or, in the case of PHS contracts, are ``not 
reasonably expected to exceed'') the monetary threshold ``over the next 
12 months.'' Under the revised definition proposed in the NPRM, at 
issue is remuneration (including salary and any payment for services 
not otherwise identified as salary) received from an entity ``in the 12 
months preceding the disclosure.'' We have included this change in the 
final rule; we believe it will help Institutions and Investigators to 
determine more accurately whether or not a financial interest 
represents an SFI because the payments have already occurred and are 
likely to have been documented. Moreover, to the extent an Investigator 
receives additional remuneration from an entity after completing an 
initial SFI disclosure, such remuneration would be subject to the 
Investigator's ongoing disclosure obligations assuming the monetary 
threshold was met or exceeded.
    Several respondents suggested that the 1995 regulations' disclosure 
period is more consistent with the aim of maintaining objectivity in 
research. Some suggested that the time period for disclosure include 
both the preceding and the next 12 months, and one suggested that the 
period cover the duration of the award. We do not agree with these 
suggestions. In addition to disclosing SFIs received in the 12 months 
preceding the disclosure, Investigators are required to disclose new 
SFIs to the Institution within 30 days, and if payments received after 
the initial disclosure give rise to an SFI that is determined to be an 
FCOI by the institutional official(s), the Institution is required to 
submit an FCOI report to the PHS Awarding Component. Consistent with 
our proposal in the NPRM, the final rule also includes a requirement 
for annual updates. We believe this combination of provisions provides 
reasonable coverage of an Investigator's SFIs related to the PHS-funded 
research project, and allows a more accurate listing of SFIs by 
Investigators. Institutions are free to expand upon these requirements 
in their institutional policies and when considering whether an SFI is 
an FCOI with regard to the PHS-funded research.
    Some respondents inquired how a payment or reimbursement that 
occurred before a PHS award should be reviewed in relation to the PHS-
funded research. Although such considerations are dependent on the 
context of the SFI, the regulations do not prevent Institutions from 
taking into account whether the Investigator has an ongoing financial 
relationship with the entity providing the payment or reimbursement or 
whether the payment or reimbursement was limited in duration.
    One respondent suggested that different disclosure periods should 
be instituted for different types of research. As discussed in the NPRM 
and above, we posed a number of questions in the ANPRM on the issue of 
whether the regulations should be amended to require specific 
approaches related to certain types of research or alternatively, 
specific types of financial interests or FCOI. The majority of the 
respondents to the ANPRM thought that this approach would not account 
for the full range of research projects as well as the large variation 
in circumstances in which FCOI may arise. As a result, the regulations 
impose uniform requirements, regardless of the type of research, 
financial interest, or identified FCOI at issue.
    Examples of payment for services: The definition of SFI under the 
1995 regulations referenced as examples of payments for services, 
receipt of consulting fees, or honoraria. In the NPRM, we proposed to 
add ``paid authorship'' and ``travel reimbursement'' as additional 
examples.\26\
---------------------------------------------------------------------------

    \26\ 75 FR 28705 (May 21, 2010).
---------------------------------------------------------------------------

    With regard to ``paid authorship,'' although it should be clear 
that receipt of payment from an entity in exchange for drafting a 
publication constitutes payment for services, we believe it is 
important to reference this form of payment specifically in the 
regulations. We are particularly concerned about situations in which 
Investigators may have accepted payment from private entities, in 
return for allowing their names to be used as authors on publications 
for which they had very limited input. This practice has come under 
increasing scrutiny in recent years and we wish to make it clear to 
Institutions and Investigators that such activity may be subject to the 
disclosure and reporting requirements depending on the circumstances of 
a given case, such as the amount of payment. One respondent noted that 
remuneration from authorship of textbooks is not considered an FCOI at 
their Institution. We note that the regulations only require disclosure 
of such SFI by the Investigator to his or her Institution. The 
Institution makes the determination as to whether the SFI constitutes 
an FCOI, based on its review of the specific circumstances. Another 
respondent suggested that payments to faculty authors from publishers 
should be excluded from the SFI definition while payments from 
companies not engaged primarily in publishing should be included. We do 
not agree with this suggestion, because we believe that it may be 
difficult to draw a distinction between companies engaged primarily in 
publishing (i.e., ``publishers'') and those that are not, leading to 
inconsistent disclosures. Therefore, we retained the ``paid 
authorship'' example in the definition, as proposed in the NPRM.
    With regard to ``travel reimbursement,'' while one respondent 
agreed that this should be included in the SFI definition, many 
objected to its inclusion on the grounds that such

[[Page 53265]]

payments do not constitute income to the Investigator and requiring 
their disclosure would constitute a burden, as in many cases the 
Investigator is not aware of the value of the reimbursement. We have 
considered these comments carefully and appreciate that for 
Investigators, travel to scientific meetings and to present his/her 
research to colleagues and other interested parties is an integral part 
of the scientific research enterprise and affords many important 
opportunities for forging relationships and collaborations among 
researchers. The provisions in the revised regulations are not intended 
to discourage this type of travel. We also appreciate that requiring 
Investigators to disclose the value of travel reimbursements could be 
difficult, particularly in the case of sponsored travel, which is paid 
on behalf of the Investigator and not reimbursed to the Investigator, 
so that the exact monetary value may not be readily available. 
Nonetheless, depending on the source of funding and other circumstances 
(e.g., destination, duration) of specific travel, the Institution may 
consider whether that sponsored travel could affect the design, 
conduct, or reporting of PHS-funded research. In order to minimize the 
burden on the Investigator while providing the Institution with the 
appropriate level of information, we have added another category 
(paragraph 2) to the SFI definition that addresses the disclosure of 
reimbursed and sponsored travel. The Institution's FCOI policy will 
specify the details of this disclosure, which will include, at a 
minimum, the purpose of the trip, the identity of the sponsor/
organizer, the destination, and the duration. Although the regulations 
do not require disclosure of the monetary value of the sponsored or 
reimbursed travel, in accordance with the Institution's FCOI policy, 
the Institutional official(s) can determine if further information is 
needed, including a determination or disclosure of monetary value, in 
order to establish whether the travel constitutes an FCOI with the PHS-
funded research. In addition, travel that is reimbursed or sponsored by 
a Federal, state, or local government agency, an Institution of higher 
education as defined at 20 U.S.C. 1001(a), an academic teaching 
hospital, a medical center, or a research institute that is affiliated 
with an Institution of higher education is not subject to this 
disclosure requirement.
    We considered the alternative of revising the rule to exclude 
``reasonable and customary'' travel. We did not revise the rule in this 
manner because we believe that this puts the responsibility for 
defining ``reasonable and customary'' onto the Investigator, which may 
lead to inconsistency in disclosure.
    Royalties & Intellectual Property: Under the 1995 regulations, 
royalties are included among the ``payments'' subject to the $10,000 
threshold. Under the revisions proposed in the NPRM, which we have 
implemented, the $5,000 threshold would apply to equity interests and 
``payment for services,'' which would include salary but not royalties. 
Royalties nevertheless are potentially subject to disclosure, as are 
other interests related to intellectual property. Specifically, the 
revised definition applies to any of the following: intellectual 
property rights (e.g., patents, copyrights), royalties from such 
rights, and agreements to share in royalties related to intellectual 
property rights. As discussed further below, however, royalties 
received by the Investigator from the Institution would still be 
excluded from the SFI definition if the Investigator is currently 
employed or otherwise appointed by the Institution.
    One respondent inquired whether Investigators should disclose 
intellectual property interests when a patent application is submitted 
or only when the patent is granted. Since income related to an 
intellectual property interest may be received before a patent is 
issued we would expect institutional policies to require disclosure 
upon the filing of a patent application or the receipt of income 
related to the intellectual property interest, whichever is earlier. We 
have also clarified our intent that the disclosure requirements include 
intellectual property interests by adding a specific reference to 
``interests'' to the existing reference to ``rights.''
    Many respondents requested further clarification as to the 
thresholds associated with these intellectual property interests. The 
threshold of $5,000 applies to licensed intellectual property rights 
(e.g., patents, copyrights), royalties from such rights, and agreements 
to share in royalties related to licensed intellectual property rights. 
Several respondents suggested that in the rare cases when unlicensed 
intellectual property is held by the Investigator instead of flowing 
through the Institution, it should be excluded from the definition as 
it is difficult to determine the value of such interests. We agree that 
it is difficult to determine the value of such interests, and have 
revised the SFI definition to include intellectual property rights and 
interests (e.g., patents, copyrights) upon receipt of income related to 
such rights and interests. Therefore unlicensed intellectual property 
that does not generate income is excluded. Nonetheless, such interests 
have the potential to become significant and generate income, at which 
point they would become subject to the regulations.
    Exclusions: Consistent with the NPRM, we have modified the types of 
interests that are specifically excluded from the SFI definition. For 
example, the NPRM definition only excludes income from seminars, 
lectures, and teaching engagements, if sponsored by a Federal, state, 
or local government agency, or an Institution of higher education as 
defined at 20 U.S.C. 1001(a). Similarly, in the NPRM we proposed that 
income from service on advisory committees or review panels would only 
be excluded if from a Federal, state, or local government agency, or an 
Institution of higher education as defined at 20 U.S.C. 1001(a). We 
proposed this change due to the growth of non-profit entities that 
sponsor such activities since the 1995 regulations were promulgated. 
Some of these non-profit entities receive funding from for-profit 
entities that may have an interest in the outcome of the Investigators' 
research (e.g., foundations supported by pharmaceutical companies). One 
respondent suggested that all income should be included in the SFI 
definition. We believe that the final rule strikes an appropriate 
balance regarding the income that must be disclosed as an SFI. On the 
other hand, we received many suggestions for additional types of non-
profit Institutions for which income from seminars, lectures, or 
teaching engagements and from service on advisory committees or review 
panels could be excluded, e.g., professional or engineering societies, 
Institutions that provide competitive research grants, academic medical 
centers, and Institutions that meet the standards of the Accreditation 
Council for Continuing Medical Education. Other respondents suggested 
that disclosure be limited to income from non-profit organizations that 
are primarily supported by for-profit companies. Another suggested the 
definition exclude activities that primarily support higher education. 
We have not adopted all these suggestions because we believe that 
difficulties in identifying the funding sources of many non-profit 
organizations would pose a greater obstacle to Investigators when 
deciding which SFI to disclose to their Institution than they would to 
the Institution when

[[Page 53266]]

evaluating such SFI. Therefore, it would seem preferable for the 
Institution to receive and evaluate the information.
    Nonetheless, we agree with respondents that limiting exclusions 
from disclosure to income from Federal, state, or local government 
agencies, and Institutions of higher education as defined at 20 U.S.C. 
1001(a) is unnecessarily narrow. Therefore, we have revised the SFI 
definition in the final rule to exclude salary, royalties, or other 
remuneration paid by the Institution to the Investigator if the 
Investigator is currently employed or otherwise appointed by the 
Institution; any ownership interest in the Institution held by the 
Investigator, if the Institution is a commercial or for-profit 
organization; income from seminars, lectures, or teaching engagements 
sponsored by a Federal, state, or local government agency, an 
Institution of higher education as defined at 20 U.S.C. 1001(a), an 
academic teaching hospital, a medical center, or a research institute 
that is affiliated with an Institution of higher education; or income 
from service on advisory committees or review panels for a Federal, 
state, or local government agency, an Institution of higher education 
as defined at 20 U.S.C. 1001(a), an academic teaching hospital, a 
medical center, or a research institute that is affiliated with an 
Institution of higher education.
    One respondent inquired whether income received from seminars, 
lectures, or teaching engagements sponsored by a Federal, state, or 
local government agency; or income from service on advisory committees 
or review panels for a Federal, state, or local government agency, but 
paid by a private contract organization acting for that government 
agency, is excluded from the SFI definition. If a private organization 
is acting as a contractor to the Federal, state, or local government 
agency, for the purposes of these regulations, such income is excluded 
from the definition.
    The 1995 regulations excluded from the SFI definition any ownership 
interests in the Institution, if the Institution is an applicant under 
the SBIR Program. As proposed in the NPRM, we have broadened the 
exclusion to cover any ownership interests in the Institution if the 
Institution is a commercial or for-profit organization (whether or not 
the Institution is an applicant under the SBIR Program). A few 
respondents requested further clarification, of situations in which an 
Investigator is employed by an Institution and also has equity in a 
for-profit company. In those cases, his or her equity would only be 
excluded from disclosure requirements when the for-profit company is 
the Institution that is applying for, or that receives, the PHS 
research funding in which the Investigator is participating.
    As proposed in the NPRM, we have also limited the exclusion in the 
1995 regulations for salary, royalties, or other remuneration paid by 
the Institution to the Investigator to circumstances in which the 
Investigator is currently employed or otherwise appointed by the 
Institution. In response to questions from a number of respondents, we 
have also clarified that intellectual property rights assigned to the 
Institution and agreements to share in royalties related to such rights 
are also excluded from the SFI definition. Other respondents suggested 
that royalties and intellectual property rights that are provided by 
the Institution should not be excluded from the definition as they 
could affect the objectivity of the PHS-funded research. We do not 
believe it would be useful to increase the disclosure burden on the 
Investigator by requiring disclosure to the Institution of information 
the Institution already has available. However, we note that 
Institutions have the flexibility to require such disclosures in their 
own policies. One respondent suggested that such royalties continue to 
be excluded from the SFI definition if an Investigator transfers to 
another Institution. In that case, however, the new Institution is not 
the source of the royalties and the exclusion would not apply; 
therefore such royalties would be included in the SFI definition.
    Many respondents requested that income from mutual funds and 
retirement accounts be explicitly excluded from Investigator disclosure 
requirements, to the extent that Investigators do not control the 
investment decisions made in these vehicles. We have provided guidance 
in the form of Frequently Asked Questions on the NIH Web site 
recognizing that interests in a pooled fund such as a diversified 
mutual fund may be sufficiently remote that it would not reasonably be 
expected to create a conflict of interest for a PHS-funded 
Investigator.\27\ We have revised the regulations in accordance with 
this guidance to exclude income from investment vehicles, such as 
mutual funds and retirement accounts, as long as the Investigator does 
not directly control the investment decisions made in these vehicles.
---------------------------------------------------------------------------

    \27\ http://grants.nih.gov/grants/policy/coifaq.htm#427.
    Am I required to disclose interests in mutual funds?
    Please refer to your Institution's policy. An interest in a 
pooled fund such as a diversified mutual fund may be sufficiently 
remote that it would not reasonably be expected to create a conflict 
of interest for an Investigator funded by the NIH.
---------------------------------------------------------------------------

    One respondent requested that the definition cover any 
``security,'' as defined by reference to the Securities Act of 1933, as 
amended, and suggested that there is no reason to exclude debt 
instruments. Although we have not implemented this suggestion in the 
final rule, we note that our definition addresses stock, a specific 
element of the definition of ``security'' under the Securities Act of 
1933, 15 U.S.C. 77a et seq., and that the regulations do not expressly 
exclude debt instruments. A few respondents suggested that the 
definition should go beyond the Investigator's spouse and dependent 
children to include interests held by more distant family members and/
or friends. We have not made this change, because we believe that it 
would expand the scope of the regulations unnecessarily and create 
ambiguity. Some respondents suggested that the SFI definition include 
payments from individuals, as well as entities. We have not made this 
change because we typically would expect individual payors to be acting 
on behalf of or in connection to entities, and because the source of 
payment is not the primary focus of the SFI definition.
    Several respondents requested that we revise the SFI definition to 
include ``domestic partners.'' Although we appreciate the interest in 
identifying individuals who share assets with, or control assets on 
behalf of, the Investigator through civil unions, powers of attorney, 
or other arrangements, we have not made that specific change to the 
final rule because we believe it is beyond the scope of these 
regulations to define the term ``domestic partners.'' However, we note 
that Institutions have the flexibility to incorporate this suggestion 
into their policies.
    Finally, as a technical correction to the language proposed in the 
NPRM, we have deleted the reference to ``except as otherwise specified 
in this definition,'' to improve the overall clarity of the SFI 
definition.
    16. Small Business Innovation Research (SBIR) Program. In the NPRM 
we removed the definition in the 1995 regulations for the SBIR Program 
since, in the proposed regulations this program was no longer excluded, 
and we had not separately defined other HHS research programs that were 
subject to the proposed regulations. As the SBIR Phase I applications 
are excluded from the final rule (see

[[Page 53267]]

discussion above), we are including the definition in the final rule.

Responsibilities of Institutions Regarding Investigator Financial 
Conflicts of Interest (42 CFR 50.604, 45 CFR 94.4)

    Consistent with the NPRM, we have substantially revised the 
responsibilities of Institutions regarding Investigator FCOI.
    The 1995 regulations provided that each Institution must maintain 
an appropriate written, enforced policy on conflicts of interest that 
complies with the regulations.\28\ In the NPRM we proposed revising 
this provision to require an Institution not only to maintain an up-to-
date, written, enforced FCOI policy that complies with the regulations, 
but also to make such policy available via a publicly accessible Web 
site. We have included this requirement in the revised regulations at 
42 CFR 50.604(a) and 45 CFR 94.4(a), because we believe that it fosters 
greater transparency and accountability with regard to institutional 
policies. Moreover, we have clarified that if an Institution does not 
have a current presence on a publicly accessible Web site (and only in 
those cases), the Institution may make the information available in 
writing within five business days of any request. If, however, the 
Institution acquires a presence on a publicly accessible Web site 
during the time of the PHS award, the requirement to post the 
information on that Web site will apply within 30 calendar days.
---------------------------------------------------------------------------

    \28\ 42 CFR 50.604(a) and 45 CFR 94.4(a).
---------------------------------------------------------------------------

    One respondent suggested that Institutions' policies should be 
filed with the PHS. We believe the requirement to make the policies 
publicly available renders this suggestion unnecessary. One respondent 
suggested that Institutions should be required to ``prominently'' post 
their FCOI policy on the Institution's Web site so that it would be 
easily accessible. We have not revised the regulations to include this 
requirement, because we understand that term could create ambiguity. We 
have used the term ``publicly accessible'' to communicate our intention 
that the public can readily obtain the information required under these 
regulations. In the event of any questions, we encourage members of the 
public to contact Institutions for instructions as to the location of 
their policy, and to report any enforcement concerns to the PHS 
Awarding Component. One respondent inquired as to whether this 
provision applies to subrecipients. We note that subrecipients that 
rely on their own policies would be subject to this requirement. 
However, if the subrecipient is relying on the policies of the awardee 
Institution, that Institution would be responsible for posting the 
policy.
    Consistent with the NPRM, we have also revised this section to 
clarify that if an Institution's policy on FCOI includes standards that 
are more stringent than the regulations, the Institution shall adhere 
to its policy and shall provide FCOI reports regarding identified FCOI 
to the PHS Awarding Component in accordance with the Institution's own 
standards within the time periods required in the regulations. Many 
respondents indicated that this provision would provide a substantial 
disincentive to Institutions to adopt more stringent standards than 
those set forth in the regulations, and could lead to a lack of 
consistency in reporting and increased confusion.
    We appreciate the concerns raised and discussed them carefully 
before making the final decision to retain this language in the final 
rule because of several mitigating factors. For example, the 1995 
regulations indicated that the regulations constituted a minimum 
standard; i.e., the Institution retained flexibility to add 
requirements to those in the regulations, as long as such requirements 
are consistent with the regulations. Specifically, 42 CFR 50.605 and 45 
CFR 94.5 state: ``In addition to the types of conflicting financial 
interests described in this paragraph that must be managed, reduced, or 
eliminated, an Institution may require the management of other 
conflicting financial interests in its policy on financial conflicts of 
interest, as the Institution deems appropriate.'' Moreover, in 
regulatory guidance on this issue with regard to grants and cooperative 
agreements, NIH stated that Institutions could impose more stringent 
requirements than those in the regulation as long as the Institution's 
policies meet the minimum requirements of the regulation and each 
Investigator is informed of the Institution's policies; of the 
Investigator's disclosure responsibilities; and of the regulation.\29\ 
In addition, the principle that an Institution must follow its own 
policies, even if they go beyond--but as long as they are consistent 
with--Federal policies and regulations, is an established standard of 
NIH grants policies and applies to the implementation of all terms and 
conditions of award for grants and cooperative agreements. Finally, we 
weighed the possible inconsistency in reporting resulting from 
implementation of this provision against the possible ramifications of 
the PHS Awarding Component being unaware of an FCOI related to PHS-
funded research that was identified by the Institution. We concluded 
that full reporting of all Institution-identified FCOIs related to PHS-
funded research is necessary for appropriate accountability by the 
Institution and for robust oversight by the PHS Awarding Component. 
Although the regulations do not specify a standardized Federal 
reporting form, as suggested by one respondent, the regulations 
identify necessary elements of the report (e.g., 42 CFR 50.605(b)(3) 
and 45 CFR 94.5(b)(3)), and NIH provides a framework for reporting 
those elements through its online reporting system.
---------------------------------------------------------------------------

    \29\ NIH ``Frequently Asked Question'' B.4 at http://grants.nih.gov/grants/policy/coifaq.htm.
---------------------------------------------------------------------------

    Also consistent with the NPRM, we are incorporating the requirement 
in the 1995 regulations that each Institution must inform each 
Investigator of its policy on conflicts of interest, of the 
Investigator's disclosure responsibilities, and of these regulations. 
This requirement is addressed as a new paragraph (b), and, as proposed 
in the NPRM, it includes an Investigator training requirement. However, 
we have modified the training requirement to accommodate suggestions 
raised in public comments. Specifically, the NPRM proposed that 
Institutions require Investigators to complete training regarding the 
Institution's FCOI policy, the Investigator's responsibilities 
regarding disclosure of SFI, and the regulations, prior to engaging in 
PHS-funded research and, thereafter, at least once every two years.
    Although some respondents agreed with the training requirements as 
proposed, many other respondents raised reasonable alternatives. For 
example, most of the respondents on this topic agreed with the 
requirement for initial training of Investigators prior to engaging in 
PHS-funded research but thought that the Institution should determine 
the training frequency thereafter or that a period longer than two 
years should be specified. We considered the comments carefully and 
agree that every two years may be too frequent; however, we believe it 
is important to ensure that Investigators receive training beyond the 
initial period in order to maintain objectivity in PHS-funded research 
over the long term. Therefore, we have revised the provision in 42 CFR 
50.604(b) and 45 CFR 94.4(b) to require Institutions to

[[Page 53268]]

train Investigators prior to engaging in research related to any PHS-
funded grant or contract, and at least every four years (a typical 
period of a PHS-funded research grant), and immediately when any of the 
following circumstances apply: (1) The Institution revises its 
financial conflicts of interest policies or procedures in any manner 
that affects the requirements of Investigators; (2) an Investigator 
moves to a new Institution; or (3) an Institution finds that an 
Investigator is not in compliance with the regulations or with the 
Institution's financial conflicts of interest policy or management 
plan.
    One respondent proposed that training be required only of those 
PHS-funded Investigators who have FCOIs. We disagree with this 
suggestion, as this change would not fulfill the purpose of the 
training requirement, which is to inform all Investigators conducting 
PHS-funded research of the Institution's FCOI policy, their 
responsibilities regarding disclosure of SFI, and the regulations. A 
few respondents suggested that the mandated training include a 
discussion of ethical issues surrounding FCOI. We note that as long as 
the training covers the Institution's FCOI policy, the Investigator's 
responsibilities regarding disclosure of SFI, and the regulations, 
Institutions are free to adopt this suggestion, and to include any 
other issues they deem essential to accomplishing the stated objective 
of the training. One respondent suggested that the Institution's 
training materials be submitted to the PHS Awarding Component and that 
Investigators be required to certify completion of training to the PHS 
Awarding Component. We believe that this suggestion is addressed by the 
existing HHS requirement that institutional officials are responsible 
for ensuring compliance with all applicable Federal laws and 
regulations, including required certifications and assurances; such 
officials must provide a certification regarding compliance with the 
regulation--including the training requirement--with each application 
for funding.
    Finally, several respondents requested that HHS provide training 
materials that Institutions can use to fulfill this requirement, as 
well as seminars or workshops that address implementation of the 
revised regulations. As in the past, NIH/HHS will continue to engage in 
outreach activities to promote compliance with the regulations, and 
will make resources available online, including guidance on policy 
development and a regulatory training module for Institutions and 
Investigators. Institutions should adapt these resources to incorporate 
information related to their specific policies and procedures, as 
needed.
    Consistent with the NPRM, we have also implemented clarifications 
to the requirement in the 1995 regulations that, if the Institution 
carries out the PHS-funded research through subrecipients (e.g., 
subcontractors or consortium members), the Institution must take 
reasonable steps to ensure that Investigators working for subrecipients 
comply with the regulations, either by requiring those Investigators to 
comply with the Institution's policy or by requiring the subrecipients 
to provide assurances to the Institution that will enable the 
Institution to comply with the regulations. As proposed in the NPRM, we 
are addressing these changes in a new subsection (c), though we are 
implementing minor changes to the proposed language to improve overall 
clarity as follows: An Institution that carries out the PHS-funded 
research through a subrecipient must incorporate as part of a written 
agreement with the subrecipient terms that establish whether the FCOI 
policy of the awardee Institution or that of the subrecipient will 
apply to the subrecipient's Investigators. If the subrecipient's 
Investigator must comply with the subrecipient's FCOI policy, the 
subrecipient shall certify as part of the agreement referenced above 
that its policy complies with the regulations. If the subrecipient 
cannot provide such certification, the agreement shall state that 
subrecipient Investigators are subject to the FCOI policy of the 
awardee Institution for significant financial interests that are 
directly related to the subrecipient's work for the awardee 
Institution.
    Additionally, if the subrecipient's Investigators must comply with 
the subrecipient's FCOI policy, the agreement referenced above shall 
specify time period(s) for the subrecipient to report all identified 
FCOI to the awardee Institution. Such time period(s) shall be 
sufficient to enable the awardee Institution to provide timely FCOI 
reports, as necessary, to the PHS as required by the regulations. 
Alternatively, if the subrecipient's Investigators must comply with the 
awardee Institution's FCOI policy, the agreement referenced above shall 
specify time period(s) for the subrecipient to submit all Investigator 
disclosures of SFIs to the awardee Institution. Such time period(s) 
shall be sufficient to enable the awardee Institution to comply timely 
with its review, management, and reporting obligations under the 
regulations. Subsection (c) also requires that the Institution provide 
FCOI reports to the PHS regarding all FCOIs of all subrecipient 
Investigators consistent with the regulations. We believe these changes 
will clarify for Institutions and their subrecipients the requirements 
of both parties, which will promote greater compliance with the 
regulations.
    Many respondents were concerned that these provisions would be 
difficult to operationalize as written in the NPRM, particularly in the 
case of foreign organizations. They suggested that awardee Institutions 
would not reasonably be able to evaluate the FCOI policies of the 
subrecipient Institution. We believe that this concern is alleviated by 
the requirement of a written agreement to reinforce a clear 
understanding of the expectations of the subrecipient and awardee 
Institution,\30\ depending on whose policy will apply. To address a 
concern raised by another respondent, we have also added language to 
limit the SFI reported to the awardee Institution to those that are 
directly related to the subrecipient's work for the awardee 
Institution.
---------------------------------------------------------------------------

    \30\ The term ``awardee Institution'' is used here to 
distinguish it from the subrecipient Institution.
---------------------------------------------------------------------------

    Some respondents suggested that the subrecipients report FCOIs 
identified for their Investigators directly to the PHS Awarding 
Component. Others proposed that subrecipients that are the direct 
recipients of other awards from the PHS Awarding Component be exempt 
from the certification process. We disagree with both suggestions. The 
PHS Awarding Component has a direct relationship only with the awardee 
Institution. Therefore, the awardee Institution is responsible for 
providing FCOI reports to the PHS regarding all financial conflicts of 
interest of all subrecipient Investigators, consistent with the 
regulations. These expectations apply whether or not the subrecipient 
serves as an awardee Institution to the PHS Awarding Component on other 
awards, as each award is considered separately for purposes of 
compliance with the regulations.
    One respondent noted that there is no timeline specified for 
Institutions to provide the PHS all FCOI reports of all subrecipient 
Investigators. We have clarified our expectation that Institutions 
report subrecipient-identified FCOIs prior to the expenditure of funds 
and within 60 days of any subsequently identified FCOI by adding this 
language to subsection (c)(2).
    One respondent proposed that the agreement between the awardee and

[[Page 53269]]

subrecipient Institutions, and the subrecipients' FCOI policies should 
be filed with the PHS. We believe that the submission of this 
information is not necessary unless specifically requested by the PHS 
Awarding Component since applicable HHS policy requires Institutions to 
certify compliance with the requirements of this and other regulations 
in each application or solicitation for funding. An Institution's 
failure to comply with the terms and conditions of award, including 
this regulation, may cause HHS to take one or more enforcement actions, 
depending on the severity and duration of the noncompliance.
    Paragraph (d) of the NPRM required that an Institution designate an 
institutional official(s) to solicit and review disclosures of SFIs 
from each Investigator who is planning to participate in PHS-funded 
research. A few respondents suggested that the regulations be revised 
to stipulate the requirements for the designated official(s) and how 
the Institution should ensure that the designated official(s) do not 
themselves have conflicts of interest. We have not implemented those 
changes because we believe that the Institution is in the best position 
to determine the qualifications and characteristics of the designated 
official(s) in the Institution's policy.
    The 1995 regulations required that, by the time an application or 
contract proposal is submitted to the PHS, each Investigator who is 
planning to participate in the PHS-funded research has submitted to the 
designated official(s) a listing of his/her known SFIs (and those of 
his/her spouse and dependent children): (i) That would reasonably 
appear to be affected by the research for which PHS funding is sought; 
and (ii) in entities whose financial interests would reasonably appear 
to be affected by the research. All financial disclosures must be 
updated during the period of award, either on an annual basis or as new 
reportable SFIs are obtained. As discussed above, the revised SFI 
definition includes SFIs that reasonably appear related to the 
Investigator's ``institutional responsibilities.'' Therefore, the 
requirement in the 1995 regulations to disclose SFIs, which we have 
adopted in paragraph (e) of the final rule, incorporates this revised 
definition, such that the scope of Investigator disclosures is no 
longer project specific, but rather pertains to the Investigator's 
institutional responsibilities. In response to a suggestion from a 
respondent, we have clarified that Investigators who have not 
previously disclosed their SFIs to the Institution's designated 
official(s) must do so no later than the time of application or date of 
contract proposal submitted for PHS-funded research.
    One respondent suggested that Institutions should establish an 
internal database for disclosures of Investigator SFI which could be 
easily updated. We have not included this requirement because we are 
concerned that it could impose an unnecessary administrative burden and 
expense to Institutions. As long as Institutions have a process in 
place to comply fully with all regulatory requirements, they may 
collect disclosures from Investigators in the manner that is most 
appropriate for their policies and procedures.
    Consistent with our proposal in the NPRM, as part of paragraph (e), 
we have also revised and clarified an Investigator's annual and 
ongoing, including ad hoc, disclosure obligations. Specifically, in 
addition to requiring that each Investigator who is planning to 
participate in the PHS-funded research disclose to the Institution's 
designated official(s) the Investigator's SFIs (and those of the 
Investigator's spouse and dependent children), the Institution must 
also require each Investigator who is participating in the PHS-funded 
research to submit an updated SFI disclosure:
    (1) At least annually during the period of the award, including 
disclosure of any information that was not disclosed initially to the 
Institution or in a subsequent SFI disclosure, and disclosure of 
updated information regarding any previously disclosed SFI (e.g., the 
updated value of a previously disclosed equity interest). A number of 
respondents agreed that annual disclosure by Investigators is necessary 
but suggested that the Institution should be free to determine the 
specific timing. We have revised paragraph (e)(2) to adopt this 
suggestion. Because of this change, we have declined the suggestion of 
another respondent to link the annual disclosure period to the Fiscal 
Year calendar. Another respondent suggested that the disclosure period 
should be event-driven, rather than annual. While we continue to 
believe that annual disclosure is appropriate, we note that the 
requirement for disclosing updated SFIs in subsection (e)(3), as 
described below, should address this concern by providing Institutions 
with information about Investigator SFIs that arise between the annual 
disclosure periods.
    (2) Within 30 days of discovering or acquiring (e.g., through 
purchase, marriage, or inheritance) a new SFI. A few respondents 
suggested that 30 days is too short a period for disclosure of new 
SFIs, and one respondent suggested that this requirement be changed to 
60 days, consistent with the time-period specified in other parts of 
the regulations. After carefully considering the appropriate balance 
between affording Investigators sufficient time to disclose new SFIs as 
they arise and the need to review SFIs related to PHS-funded research 
in a timely manner, we have retained the 30 day period in subsection 
(e)(3).
    A respondent suggested that requiring disclosure when an 
Investigator is planning to participate in PHS-funded research is too 
imprecise and requested that this phrase be revised. We have revised 
subsection (e)(1) to specify that disclosures must occur no later than 
the time of application or date of contract proposal submitted for PHS-
funded research.
    The 1995 regulations required an Institution to provide guidelines 
consistent with the regulations for the designated official(s) to 
identify conflicting interests and take such actions as necessary to 
ensure that such conflicting interests will be managed, reduced, or 
eliminated. Consistent with our proposal in the NPRM, we have 
reorganized and expanded this requirement in a re-designated paragraph 
(f), to clarify an Institution's obligations. First, the guidelines 
must address two related tasks, specifically, determination of whether 
an Investigator's SFI is related to the PHS-funded research and, if so 
related, whether the SFI is an FCOI. Under the 1995 regulations, the 
Investigator bore the responsibility for determining the relatedness of 
an SFI to the PHS-funded research as part of the disclosure process.
    As discussed above, however, we have revised the definition of SFI 
to address ``institutional responsibilities''; consistent with this 
change, we have shifted the responsibility for determining whether an 
Investigator's SFI is related to PHS-funded research to the 
Institution. Specifically, an Investigator's SFI is related to PHS-
funded research when the Institution, through its designated 
official(s), reasonably determines that the SFI: could be affected by 
the PHS-funded research; or is in an entity whose financial interest 
could be affected by the research. Although one respondent suggested 
that this definition is not sufficiently inclusive, we believe it 
encompasses the range of relationships between an Investigator's SFI 
and PHS-funded research. We note that this definition has been in 
effect since the 1995 regulations and remains consistent

[[Page 53270]]

with the guidance that NIH/HHS has offered on this issue since that 
time.
    Many respondents agreed that the responsibility for determining 
whether an Investigator's SFI is related to the PHS-funded research 
should ultimately rest with the Institution; however, they were 
concerned that the proposed revisions in the NPRM did not allow 
Institutions to involve the Investigator in this process. They 
suggested that requiring Institutions to make this determination 
without the input of the Investigator would make the decision-making 
process more challenging. Because this was not the intent of the 
proposed language, we have revised paragraph (f) to explicitly state 
that the Institution may involve the Investigator in the designated 
official(s)'s determination of whether an SFI is related to the PHS-
funded research. A few respondents suggested this responsibility should 
remain with the Investigator. We have weighed this suggestion and 
believe that the revised language strikes the appropriate balance 
between the Institution's ultimate responsibility for reviewing 
Investigator disclosures and the Investigator's responsibility to 
disclose all SFIs related to his or her institutional responsibilities.
    In the Extension Notice, we requested comment as to whether the 
regulations should further clarify that, as part of the Institution's 
FCOI determination process, institutional officials must consider 
whether an Investigator's SFI was previously determined to be an FCOI 
at another Institution and subject to a management plan with regard to 
other PHS-funded research project(s). Many respondents suggested that 
requiring institutional officials to consider information on an FCOI 
from another Institution is unnecessary, as information regarding FCOIs 
would be available on a public Web site, as per the proposed revisions 
in the NPRM. They suggested that Institutions should be free to use 
their own policies and procedures to comply with the regulations. We 
have considered these comments and agree. With the expansion of 
Investigator disclosure to include all SFIs related to their 
institutional responsibilities and the requirement to ensure public 
accessibility of information about FCOIs of senior/key personnel for 
research grants and cooperative agreements and key personnel for 
research contracts, the likelihood of an Institution not receiving 
information about a particular SFI or FCOI is minimized.
    One respondent suggested the following alternative approach: in a 
case where an Investigator moves from one Institution to another, the 
PHS Awarding Component would mediate the transfer of information 
related to any identified FCOI from the previous Institution to the new 
one, and the receiving Institution, while not bound by any previous 
management plan, would have to advise the PHS Awarding Component of its 
decision regarding that FCOI. Another suggested that Institutions 
should be required to notify the PHS Awarding Component of the 
imposition of a penalty on Investigators that limits their 
participation in PHS-funded research, and that the PHS Awarding 
Component should create a registry of these Investigators. In light of 
these comments, we have specified that updated disclosures should 
include any FCOI identified on a PHS-funded project that was 
transferred from another Institution. We also note that, as specified 
in 42 CFR 50.606(b) and 45 CFR 94.6(b), the HHS may inquire at any time 
(before, during, or after award) into any Investigator disclosure of 
financial interests and the Institution's review of, and response to, 
such disclosure, whether or not the disclosure resulted in the 
Institution's determination of an FCOI. This would include situations 
in which an Investigator moves from one Institution to another.
    To provide clarification regarding the determination of whether an 
Investigator's SFI is an FCOI, the re-designated paragraph (f) 
incorporates modified language moved from paragraph (a)(1) of the 1995 
regulations, consistent with the NPRM. Specifically, this paragraph 
provides that an FCOI exists when the Institution, through its 
designated official(s), reasonably determines that the SFI could 
directly and significantly affect the design, conduct, or reporting of 
the PHS-funded research. As discussed above, the regulations also 
incorporate a revised definition of FCOI that is based on this 
language.
    Consistent with our proposal in the NPRM, we have included the 
requirement in the 1995 regulations regarding FCOI management 
responsibilities in a separate paragraph (g), in which we clarified 
that the requirement includes management of any financial conflicts of 
a subrecipient Investigator pursuant to paragraph (c) of the revised 
regulations described above. We have also cross-referenced the 
Institution's revised management responsibilities specified in 42 CFR 
50.605(a) and 45 CFR 94.5(a), including the development and 
implementation of a management plan and, if necessary, a retrospective 
review and a mitigation report regarding how any identified bias was 
addressed, as discussed in further detail below. As a related matter, 
we have included a new paragraph (h) that cross-references the 
Institution's revised and expanded reporting requirements in the new 
paragraphs 42 CFR 50.605(b) and 45 CFR 94.5(b).
    Consistent with our proposal in the NPRM, we have retained, but re-
designated, the requirement of paragraph (e) of the 1995 regulations, 
i.e., Institutions must maintain records of all financial disclosures 
and all actions taken by the Institution with respect to each FCOI for 
at least three years from the date of submission of the final 
expenditures report or final payment, or where applicable, for the 
other time periods specified in 45 CFR 74.53(b) or 48 CFR part 4, 
subpart 4.7. Specifically, in paragraph (i) of 42 CFR 50.604 and 45 CFR 
94.4, we have included a responsibility to maintain records relating to 
all Investigator disclosures of financial interests and the 
Institution's review of, and response to, such disclosures (whether or 
not a disclosure resulted in the Institution's determination of an 
FCOI) and actions under the Institution's policy or retrospective 
review, if applicable, for that time period. We believe that this 
revision helps clarify for Institutions our intent for the record 
retention obligation to apply not only in cases in which the 
Institution has identified an FCOI, but to all Investigator SFI 
disclosures, whether or not such disclosure generated a response by the 
Institution.
    One respondent suggested that retaining records for three years is 
insufficient. We disagree; this requirement is not substantially 
different from the requirement in the 1995 regulations, and is 
consistent with the PHS record retention policy. Another suggested 
that, since some awards continue for many years and disclosures now 
relate to the institutional responsibilities of Investigator, all 
records would have to be retained indefinitely. We disagree; as 
described in the NIH grants policy statement (http://grants.nih.gov/grants/policy/nihgps_2010/nihgps_ch8.htm#_Toc271264975), records 
relating to all Investigator disclosures of financial interests and the 
Institution's review of, and response to, such disclosures, do not need 
to be retained indefinitely. Instead, the information must be retained 
for each competitive segment for a period of three years following the 
date the final expenditures report or final invoice is submitted to the 
PHS Awarding Component. In response to another comment, we also note 
that the record retention requirements in this paragraph

[[Page 53271]]

apply to records of all financial disclosures and actions under the 
Institution's policy, even if the policy is more stringent than the 
regulations.
    Additionally, the 1995 regulations required at paragraph (f) that 
Institutions establish adequate enforcement mechanisms and provide for 
sanctions where appropriate. Consistent with our proposal in the NPRM, 
we have revised this obligation in a re-designated paragraph (j) to 
require an Institution not only to establish adequate enforcement 
mechanisms and provide for employee sanctions, but also to provide for 
other administrative actions to ensure Investigator compliance as 
appropriate. One respondent suggested that the choice of enforcement 
mechanisms be left to the discretion of each Institution, and that the 
PHS should not prescribe specific enforcement mechanisms for use in any 
type of situation. We note that the revised language strikes a balance 
between preserving the Institution's discretion in this regard and in 
enabling the PHS Awarding Component to exercise proper oversight; e.g., 
the language does not specify particular actions as ``adequate'' or 
``appropriate,'' implicitly recognizing that the Institution and the 
PHS Awarding Component make those judgments on a case-by-case basis. 
Another respondent suggested that we consider revising the regulations 
to specify that FCOI committees, i.e., institutional official(s), can 
disapprove or suspend PHS funding of Investigators who are not in 
compliance with these regulations. While this example may indeed 
account for appropriate action(s) under this provision and/or under the 
Remedies sections, we have not specified any one action in this 
particular context because of the need for discretion by the 
Institutions and the PHS Awarding Components, to account for the 
specific circumstances at issue. Additionally, providing this example 
in the regulatory text could create confusion between the suspension of 
an Investigator by an Institution under these regulations and the 
suspension or debarment of an Investigator by the PHS Awarding 
Component under 2 CFR part 376.
    One respondent suggested that the PHS/HHS should be given 
enforcement power over any disclosure of significant financial interest 
that, although in technical compliance with the regulations is part of 
a plan or scheme to avoid the disclosure requirements, and referenced 
the Securities Act of 1933, as amended. We have not implemented this 
suggestion because we believe this concern is mitigated by the 
aforementioned revisions to this section and by the ability of the HHS 
to inquire at any time (before, during, or after award) into any 
Investigator disclosure of financial interests and the Institution's 
review of, and response to, such disclosure, whether or not the 
disclosure resulted in the Institution's determination of an FCOI.
    Finally, consistent with the NPRM, we have revised the 
certification requirement that was set forth in paragraph (g) of the 
1995 regulations. Re-designated paragraph (k) requires an Institution 
to certify that the Institution (1) Has in effect at that Institution 
an up-to-date, written, and enforced administrative process to identify 
and manage FCOI with respect to all research projects for which funding 
is sought or received from the PHS; (2) shall promote and enforce 
Investigator compliance with the regulations' requirements including 
those pertaining to disclosure of SFIs; (3) shall manage FCOI and 
provide initial and ongoing FCOI reports to the PHS consistent with the 
regulations; (4) agrees to make information available, promptly upon 
request, to the HHS relating to any Investigator disclosure of 
financial interests and the Institution's review of, and response to, 
such disclosure, whether or not the disclosure resulted in the 
Institution's determination of an FCOI; and (5) shall fully comply with 
the requirements of the regulations. Notably, this revised paragraph 
eliminates much of the certification language in the 1995 regulations 
regarding an Institution's reporting obligations. This change is 
consistent with other critical changes to the regulations that we have 
implemented; specifically, we have substantially revised and expanded 
the reporting requirements, and included a discussion of such 
requirements in the revisions to 42 CFR 50.605(b) and 45 CFR 94.5(b), 
as discussed below.

Management and Reporting of Financial Conflicts of Interest (42 CFR 
50.605, 45 CFR 94.5)

    Consistent with the NPRM, we have revised and expanded 
substantially the provisions of the 1995 regulations regarding 
management of FCOI to address requirements for both management and 
reporting of FCOI.
    The 1995 regulations require at paragraph (a), that an 
Institution's designated official(s) review all financial disclosures 
and determine whether a conflict of interest exists; i.e., the 
designated official(s) reasonably determines that an SFI could directly 
and significantly affect the design, conduct, or reporting of the PHS-
funded research. If a conflict is identified, the official(s) must 
determine what actions should be taken by the Institution to manage, 
reduce, or eliminate it. Paragraph (a) also provides examples of 
conditions or restrictions that might be imposed to manage conflicts of 
interest, specifically public disclosure of SFIs, monitoring of 
research by independent reviewers, modification of the research plan, 
disqualification from participation in all or a portion of the research 
funded by the PHS, divestiture of SFIs, or severance of relationships 
that create actual or potential conflicts.
    Per our proposal in the NPRM, we have revised the above language as 
part of a re-designated paragraph (a)(1) to require that, prior to the 
Institution's expenditure of any funds under a PHS-funded research 
project, the designated official(s) of an Institution shall, consistent 
with paragraph (f) of the preceding section (42 CFR 50.604 or 45 CFR 
94.4): review all Investigator disclosures of SFIs; determine whether 
any SFIs relate to PHS-funded research; determine whether an FCOI 
exists; and, if so, develop and implement a management plan that shall 
specify the actions that have been, and shall be, taken to manage such 
FCOI. As noted in the preceding section, the Institution may involve 
the Investigator in determining whether an SFI is related to PHS-funded 
research.
    One respondent suggested that this provision would require an 
Institution to identify and manage FCOI in advance of the Notice of 
Award and suggested a transition period of 60 days after award for the 
implementation of this provision, with an interim management plan in 
place during that time. In response, we note that this requirement 
refers to actions that need to be taken prior to expenditure of funds, 
not necessarily in advance of the award itself. In addition, 
development and implementation of an interim management plan for all 
identified FCOIs (instead of only those identified after the 
retrospective review discussed below) would seem to place an additional 
burden on the process of managing an identified FCOI, so we have 
declined that suggestion.
    Some respondents suggested that the PHS Awarding Component or some 
other outside agency, but not Institutions, should have the 
responsibility for reviewing Investigator SFIs and identifying and 
managing FCOI, citing possible conflicts of interest of the designated 
institutional official(s), or the Institutions themselves. After 
considering this, we believe that the revisions that we have made to 
the regulations strike the

[[Page 53272]]

appropriate balance between the responsibilities of the Institution for 
determining and managing Investigator FCOI and the oversight 
responsibilities of the PHS Awarding Component. We believe that our 
revisions will strengthen the roles of all involved in this process. 
Additionally, we have included a discussion of institutional conflicts 
of interest in section IV of this final rule.
    The most significant change that we have made to this section is 
the management plan requirement that we introduced in the NPRM. 
Although the 1995 regulations required Institutions to manage FCOI, the 
term ``management plan'' was not used. As we noted in the NPRM, many 
Institutions already have been developing and implementing management 
plans as a means of fulfilling their FCOI management responsibilities; 
explicitly incorporating this requirement in the regulations 
acknowledges the value of this practice as an important means to 
maintain objectivity in PHS-funded research across the research 
community. As indicated in the discussion of paragraph (b) below, the 
expanded reporting requirements include an obligation to report, at a 
minimum, a description of ``key elements'' of the Institution's 
management plan in certain FCOI reports.
    As discussed in the NPRM, and for reasons explained above, we also 
have deleted the sentence in this section from the 1995 regulations 
that describes when an FCOI exists. A modified version of this sentence 
has been moved to the re-designated paragraph (f) of 42 CFR 50.604 and 
45 CFR 94.4, as well as incorporated into a definition of FCOI in 42 
CFR 50.603 and 45 CFR 94.3.
    In the revised paragraph (a)(1), we have also included the 
following updated and expanded list of examples of conditions or 
restrictions that might be imposed to manage an FCOI: public disclosure 
of FCOI (e.g., when presenting or publishing the research); disclosure 
of FCOI directly to participants in research projects involving human 
subjects research; appointment of an independent monitor capable of 
taking measures to protect the design, conduct, or reporting of the 
research against bias resulting from the FCOI; modification of the 
research plan; change of personnel or personnel responsibilities, or 
disqualification of personnel from participation in all or a portion of 
the research; reduction or elimination of a financial interest (e.g., 
sale of an equity interest); or severance of relationships that create 
financial conflicts.
    One respondent suggested that disclosure alone is not sufficient 
for management of FCOI. Others suggested that the regulations should 
define a specific standard for acceptable conduct of research when an 
FCOI with PHS-funded research has been identified (e.g., adopting the 
guidelines for conducting medical research published by AAMC and AAU), 
which could include defining the SFI that would preclude an 
Investigator from being a PD/PI on PHS-funded projects or requiring the 
Institution to consider the interests of patients explicitly. Another 
suggested that the risk of advancing potentially conflicted research 
should be weighed against the risk of not advancing the research. Given 
the wide range of contexts in which a conflict with PHS-funded research 
may arise, we believe that specifying particular standards or specific 
criteria may not cover all types of FCOI. Therefore, we have declined 
these suggestions, though we note that Institutions may choose a 
variety of measures, including those proposed by the respondents, in 
their evaluation of SFIs and in any specific management plan. In 
addition, as discussed in the NPRM and above, we posed a number of 
questions in the ANPRM on the issue of whether the regulations should 
be amended to require specific approaches to management of FCOI related 
to certain types of research or alternatively, specific types of 
financial interests or FCOI. Many of the respondents to the ANPRM 
thought that this approach would not account for the full range of 
research projects as well as the large variation in circumstances in 
which FCOI may arise. Moreover, the regulations do not include specific 
provisions related to the type of research, financial interest, or 
identified FCOI at issue.
    Finally, respondents were concerned that the flexibility afforded 
to Institutions in determining how to manage SFIs that were determined 
to be FCOIs will lead to a lack of consistency across Institutions in 
the evaluation and management of Investigator FCOIs. Given the wide 
variety of contexts in which FCOIs can arise and the differences among 
Institutions, some variation across Institutions is expected. We 
believe that Institutions are in the best position to evaluate the 
circumstances and determine the most appropriate management strategies 
for specific cases.
    Additionally, we have included the two paragraphs that we 
introduced in the NPRM (paragraphs (a)(2) and (a)(3)), with 
modifications, to clarify an Institution's obligations in situations in 
which an Institution becomes aware of an SFI after the PHS-funded 
research is already underway. Specifically, paragraph (a)(2) states 
that whenever, in the course of an ongoing PHS-funded research project, 
a new Investigator participating in the research project discloses an 
SFI or an existing Investigator discloses a new SFI to the Institution, 
the designated official(s) of the Institution shall, within 60 days: 
Review the SFI disclosure; determine whether it is related to PHS-
funded research; determine whether an FCOI exists; and, if so, 
implement, on at least an interim basis, a management plan that shall 
specify the actions that have been, and will be, taken to manage the 
FCOI. Depending on the nature of the SFI, an Institution may determine 
that additional interim measures are necessary with regard to the 
Investigator's participation in the PHS-funded research project between 
the date of disclosure and the completion of the Institution's review.
    Paragraph (a)(3) states that whenever an Institution identifies an 
SFI that was not disclosed timely by an Investigator or, for whatever 
reason, was not previously reviewed by the Institution during an 
ongoing PHS-funded research project (e.g., was not timely reviewed or 
reported by a subrecipient), the designated official(s) shall, within 
60 days: review the SFI; determine whether it is related to PHS-funded 
research; determine whether an FCOI exists; and, if so: (i) Implement, 
on at least an interim basis, a management plan that shall specify the 
actions that have been, and will be, taken to manage such FCOI going 
forward; and (ii) In addition, whenever an FCOI is not identified or 
managed timely including:
     Failure by the Investigator to disclose an SFI that is 
determined by the Institution to constitute an FCOI;
     Failure by the Institution to review or manage such an 
FCOI; or
     Failure by the Investigator to comply with an FCOI 
management plan;

the Institution shall, within 120 days of the Institution's 
determination of noncompliance, complete a retrospective review of the 
Investigator's activities and the PHS-funded research project to 
determine whether any PHS-funded research, or portion thereof, 
conducted during the time period of the noncompliance, was biased in 
the design, conduct, or reporting of such research.
    The Institution is required to document the retrospective review; 
such documentation shall include, but not necessarily be limited to, 
all of the following key elements:

[[Page 53273]]

    1. Project number;
    2. Project title;
    3. PD/PI or contact PD/PI if a multiple PD/PI model is used;
    4. Name of the Investigator with the FCOI;
    5. Entity with which the Investigator has a financial conflict of 
interest;
    6. Reason(s) for the retrospective review;
    7. Detailed methodology used for the retrospective review (e.g., 
methodology of the review process, composition of the review panel, 
documents reviewed);
    8. Findings of the review (i.e., facts and observations); and
    9. Conclusions of the review (i.e., determination and recommended 
actions).
    If bias is found, the Institution is required to notify the PHS 
Awarding Component promptly and submit a mitigation report to the PHS 
Awarding Component. The mitigation report must include, at a minimum, 
the key elements documented in the retrospective review above and a 
description of the impact of the bias on the research project and the 
Institution's plan of action or actions taken to eliminate or mitigate 
the effect of the bias (e.g., impact on the research project; extent of 
harm done, including any qualitative and quantitative data to support 
any actual or future harm; analysis of whether the research project is 
salvageable). Thereafter, the Institution will submit FCOI reports 
annually, as specified elsewhere in the regulations. Depending on the 
nature of the FCOI, an Institution may determine that additional 
interim measures are necessary with regard to the Investigator's 
participation in the PHS-funded research project between the date that 
the FCOI or the Investigator's noncompliance is determined and the 
completion of the Institution's retrospective review.
    As we explained in the NPRM,\31\ these revisions are based, at 
least in part, on our experience working with Institutions and our 
observation that some Institutions may be more diligent about 
addressing potential FCOI at the onset of a PHS-funded research project 
than after the work is already underway. We also believe it is 
important to address in the regulations circumstances in which an 
Institution, for whatever reason, has not timely reviewed an SFI, 
particularly when such SFI is later determined to be an FCOI. In such 
circumstances, it is of course important for an Institution to manage 
the FCOI going forward; however, there is also a critical need to 
review and determine whether any bias was introduced into the research 
during the period of time prior to review and management of the FCOI. 
In the NPRM we proposed to address this need in paragraph (a)(3) by the 
introduction of a ``mitigation plan'' requirement,\32\ which we have 
clarified in the revised regulations as a ``retrospective review'' and 
``mitigation report,'' as provided above.
---------------------------------------------------------------------------

    \31\ 75 FR 28697 (May 21, 2010).
    \32\ 75 FR 28707 (May 21, 2010).
---------------------------------------------------------------------------

    While one respondent agreed with the requirement for a mitigation 
plan in the case of a newly identified SFI that the Institution 
determines is an FCOI, many suggested that the proposed requirement for 
a mitigation plan was unnecessary. They thought that the goal of such a 
plan would be achieved by the review and management plan that 
Institutions are required to implement when they determine that an 
Investigator's SFI constitutes an FCOI, and that determining if there 
was bias in the design, conduct, or reporting of the PHS-funded 
research would be very difficult. Some respondents agreed, however, 
that it seems reasonable to expect the Institution to determine whether 
a mitigation plan is necessary. We have considered the comments and 
agree that the requirement for a mitigation plan may have been stated 
too broadly in the NPRM. Mitigation reports should only be used in 
cases where the Institution determines that a newly identified FCOI has 
resulted in bias in the design, conduct, or reporting of PHS-funded 
research. Respondents also suggested that the elements of the 
mitigation plan in the NPRM were unclear and requested additional 
guidance. To address these comments, we have revised the requirement, 
as provided above.
    Paragraph (a)(4) requires the Institution to monitor Investigator 
compliance with the management plan on an ongoing basis until the 
completion of the PHS-funded research project. This paragraph dovetails 
with the new paragraphs (a)(2) and (a)(3), described above, by ensuring 
that the management actions taken by an Institution at the time an FCOI 
is identified continue to be followed by the Investigator(s) involved 
for the duration of the project.
    In the NPRM we proposed to introduce at paragraph (a)(5) a new 
requirement to help the biomedical and behavioral research community as 
well as the public, Congress, and other interested parties monitor the 
integrity and credibility of PHS-funded research, and underscore our 
commitment to fostering transparency, accountability, and public trust. 
Specifically, we proposed a new requirement that, prior to the 
Institution's expenditure of any funds under a PHS-funded research 
project, the Institution shall make available via a publicly accessible 
Web site information concerning any SFI that meets the following three 
criteria: (A) The SFI was disclosed and is still held by the PD/PI or 
any other Investigator who has been identified by the Institution as 
senior/key personnel for the PHS-funded research project in the grant 
application, contract proposal, contract, progress report, or other 
required report submitted to the PHS; (B) the Institution determines 
that the SFI is related to the PHS-funded research; and (C) the 
Institution determines that the SFI is an FCOI.
    We proposed to require that the information posted include, at a 
minimum, the following:
     The Investigator's name;
     The Investigator's position with respect to the research 
project;
     The nature of the SFI;
     And the approximate dollar value of the SFI (dollar ranges 
would be permissible; less than $20,000; less than $50,000; less than 
$100,000; less than or equal to $250,000; greater than $250,000), or a 
statement that the interest is one whose value cannot be readily 
determined through reference to public prices or other reasonable 
measures of fair market value.
    We proposed a requirement that the Institution update the posted 
information at least annually, and update the Web site within 60 days 
of the Institution's receipt or identification of information 
concerning any additional SFI that was not previously disclosed by the 
senior/key personnel for the PHS-funded research project, or upon the 
disclosure of an SFI by new senior/key personnel, if the Institution 
determines that the SFI is related to the PHS-funded research and is an 
FCOI. We proposed that information concerning the SFIs of an individual 
subject to this requirement shall remain available via the 
Institution's publicly accessible Web site for at least five years from 
the date that the information was most recently updated.
    We received many comments on this proposed requirement. Some 
respondents did not support this requirement, as they were concerned 
about privacy issues. A few respondents suggested that posting 
information about Investigator FCOI without the appropriate context 
would foster a negative perception of FCOI, and a couple of comments 
indicated that the requirements might conflict with state laws. Others 
suggested this requirement is unnecessary, given the disclosure

[[Page 53274]]

provisions required under the recently enacted Affordable Care Act. One 
respondent proposed that this information should be included in 
applications or proposals for PHS-funded research but not posted on a 
publicly accessible Web site. Several suggested that additional 
discussion of this provision is needed and requested that this 
requirement be omitted from the final rule at this time.
    We are strongly committed to the value of transparency to the 
public, and we also appreciate the concerns raised by these 
respondents. In keeping with the increasing number and range of public 
disclosure initiatives, including those in the aforementioned 
Affordable Care Act, we believe it is important to make available to 
the public critical information affecting PHS-funded research. 
Consistent with statutory goals and Executive Order 13563, we believe 
the language that we have finalized in this rule strikes a reasonable 
balance of the public and private interests at issue.
    Some respondents suggested that the information be made available 
upon request, rather than posted on a publicly available Web site. We 
carefully considered this suggestion and agree that making the 
information available upon request is in accordance with the overall 
goal of enhanced transparency. The chosen approach promotes such 
transparency without imposing undue burdens. Therefore, we have revised 
the regulations to state that the Institution must make the information 
publicly accessible and may do so by posting the information on a 
public Web site or by making the information available in writing 
within five business days of any request.
    Several respondents thought that the requirement would constitute a 
substantial burden and cited the necessity of setting up a database 
structure. We note that the final rule does not require the information 
to be provided in a specific format. Therefore, an Institution could 
choose to provide the information as a simple document or spreadsheet.
    A few respondents suggested that all Investigator SFIs or all 
payments from pharmaceutical companies, not only those that were 
determined to constitute an FCOI with PHS-funded research, should be 
provided. We disagree; we continue to believe that providing 
information on only those SFIs determined to be FCOIs with PHS-funded 
research provides the appropriate level of transparency, particularly 
as not all SFIs are determined to relate to PHS-funded research. 
However, Institutions are free to expand upon this requirement by 
providing information on all SFIs of their Investigators. One 
respondent suggested that there should be a grading system to denote 
levels of conflicts of interest. We note that the determination of an 
FCOI by an Institution requires an assessment of how an SFI may cause 
an FCOI with the PHS-funded research, and how any such FCOI must be 
managed. It is at that point the Institution is judging the SFI and its 
potential to create an FCOI; there is no gradient associated with an 
FCOI itself. Additionally, we are concerned that this suggestion would 
undermine the premise that an Investigator's FCOI with PHS-funded 
research is not necessarily negative or prohibitive; the intent of the 
regulations is to ensure the appropriate management of such FCOIs in 
order to protect the objectivity of the research.
    Other respondents supported the requirement for making information 
about Investigator's SFIs that were determined to be FCOIs with PHS-
funded research publicly accessible. Many suggested that the PHS should 
host the information on a central Web site. Although we considered this 
suggestion at length, we continue to believe that Institutions are in a 
better position to provide and maintain this information. For example, 
the Institution will be able to put the information into context, as 
suggested by some respondents, e.g., by relating the information to the 
Institution's FCOI policies or to other information about the 
Investigator, as the Institution deems appropriate.
    Several respondents requested that the regulations provide 
additional guidance as to exactly which Investigators are covered by 
this provision. Consistent with our proposal in the NPRM, we have 
applied the requirement to senior/key personnel for research grants and 
cooperative agreements and key personnel for research contracts. To 
provide further clarity, we also have included a new definition of 
senior/key personnel in 42 CFR 50.603 and of key personnel in 45 CFR 
94.3. Because these definitions of ``senior/key personnel'' and ``key 
personnel'' include the PD/PI, we have limited the references in this 
section to ``senior/key personnel'' or ``key personnel'' to avoid 
confusion and redundancy. Others requested that this provision apply 
only to Investigators and not to their spouse or dependent children, or 
at least that the names of the spouse and dependent children not be 
posted. We note that, consistent with the proposal in the NPRM, the 
information provided must include the name of the Investigator and the 
nature of the SFI. Any SFIs of the Investigator's spouse and dependent 
children will be attributed to the Investigator, such that only the 
Investigator's name would be provided.
    Some respondents suggested that the dollar ranges included in this 
provision be the same as those required in reports of FCOI to the PHS 
Awarding Component. We agree with this suggestion and have revised the 
language accordingly. Although one respondent requested that no dollar 
amounts should be provided, while another suggested that the top range 
of $250,000 is too low, we believe that the revised ranges provide the 
appropriate level of information. Respondents made several suggestions 
as to the length of time the information should remain available, 
ranging from two to three years. We agree with the specific comments 
that it would be useful to align the duration of the requirement for 
providing this information with the PHS records retention policy. 
Accordingly, we have revised the regulations to require that 
information concerning the SFIs that were determined to constitute 
FCOIs shall remain available for at least three years from the date 
that the information was most recently updated.
    One respondent asked for clarification of how the criterion for 
providing information on an SFI that is still held by the Investigator 
would apply to payments or reimbursements. We note that the 
requirements for making information publicly accessible relate to those 
SFIs that were determined to be FCOIs. The regulations do not prevent 
Institutions from taking into account, during that evaluation process, 
whether the Investigator has an ongoing financial relationship with the 
entity providing the payment or reimbursement or whether the payment or 
reimbursement was limited in duration.
    Finally, several respondents suggested that time is needed to allow 
Institutions to set up systems required to comply with the requirements 
in this paragraph. In particular, many suggested that implementation 
should be delayed to October 2013 to coincide with the implementation 
of the disclosure provisions of the Affordable Care Act. As specified 
in the ``Compliance Date'' paragraph in the Dates section above, we 
have provided time for implementation of the revised regulations such 
that 365 days after publication of the final rule, Institutions 
receiving PHS funding will be required to ensure public accessibility 
of information on FCOIs of senior/key personnel on research grants and 
cooperative agreements and of key personnel on research contracts via a 
publicly accessible Web site or by

[[Page 53275]]

making the information available in writing within five business days 
of any request, as required by 42 CFR 50.605 (a)(5) and 45 CFR 94.5 
(a)(5).
    Additionally, as proposed in the NPRM and discussed above, we have 
maintained the requirement of paragraph (b) of the 1995 regulations but 
restated it as follows: ``In addition to the types of conflicting 
financial interests as defined in this subpart that must be managed 
pursuant to this section, an Institution may require the management of 
other financial conflicts of interests in its policy on financial 
conflicts of interest, as the Institution deems appropriate.''
    As we also proposed in the NPRM, we have included a substantial 
revision and expansion of Institutions' existing FCOI reporting 
requirements. Specifically, paragraph (b)(1) discusses the timing of 
initial FCOI reports and references the proposed management plan 
requirements addressed in the above discussion of paragraph (a): Prior 
to the Institution's expenditure of any funds under a PHS-funded 
research project, the Institution shall provide to the PHS Awarding 
Component an FCOI report regarding any Investigator's SFI found by the 
Institution to be an FCOI and ensure that the Institution has 
implemented a management plan in accordance with this subpart. We have 
clarified that, in cases in which the Institution identifies an FCOI 
and eliminates it prior to the expenditure of PHS-awarded funds, the 
Institution shall not submit an FCOI report to the PHS Awarding 
Component.
    Similarly, paragraph (b)(2) discusses the timing of follow-up FCOI 
reports, with examples of when such reports may be required as well as 
references to the proposed management plan and retrospective review 
requirements addressed above in the discussion of paragraph (a): for 
any SFI that the Institution identifies as conflicting subsequent to 
the Institution's initial FCOI report during an ongoing PHS-funded 
research project (e.g., upon the participation of an Investigator who 
is new to the research project), the Institution shall provide to the 
PHS Awarding Component, within 60 days, a report regarding the FCOI and 
ensure that the Institution has implemented a management plan in 
accordance with the regulations. Where such an FCOI report involves an 
SFI that was not disclosed timely by an Investigator or, for whatever 
reason, was not previously reviewed by the Institution (e.g., was not 
timely reviewed or reported by a subrecipient), the Institution also is 
required to complete a retrospective review to determine whether any 
PHS-funded research, or portion thereof, conducted prior to the 
identification and management of the FCOI was biased in the design, 
conduct, or reporting of such research. Additionally, if bias is found, 
the Institution is required to notify the PHS Awarding Component 
promptly and submit a mitigation report to the PHS Awarding Component.
    Consistent with our proposal in the NPRM, paragraph (b)(3) 
discusses information that must be included in the FCOI reports 
required under paragraphs (b)(1) and (b)(2), described above. 
Specifically, such FCOI reports must include sufficient information to 
enable the PHS Awarding Component to understand the nature and extent 
of the financial conflict, and to assess the appropriateness of the 
Institution's management plan. In addition to the minimum specific 
elements of the FCOI report that we proposed in the NPRM,\33\ we have 
included a requirement to name the entity with which the Investigator 
has a financial conflict of interest, to enhance transparency and 
accountability.
---------------------------------------------------------------------------

    \33\ 75 FR 28708 (May 21, 2010).
---------------------------------------------------------------------------

    The majority of respondents supported the requirement that 
Institutions provide this additional information to the PHS Awarding 
Component, although one respondent thought this was unnecessary. 
Another respondent thought that requiring Institutions to report key 
elements of the management plan would include information that 
Investigators might want to keep private. We have retained this 
requirement because we believe that receiving information on specific 
aspects of the management plan is necessary to ensure appropriate 
oversight by the PHS Awarding Component. We note that the regulations 
state under 42 CFR 50.606(b) and 45 CFR 94.6(b) that to the extent 
permitted by law, HHS will maintain the confidentiality of all records 
of financial interests. Another suggested the regulations require 
reporting of the exact dollar amount of the financial interest, rather 
than ranges. We did not make this change; the exact amount of some 
types of financial interests, such as equity, may change frequently, 
which could create ambiguity and intensify the administrative burden.
    One respondent inquired as to whether the rationale for including 
the conflicted Investigator in the research project should include 
application of the ``rebuttable presumption standard as articulated by 
AAMC'' (i.e., ``Institutional policies should establish the rebuttable 
presumption that an individual who holds a significant financial 
interest in research involving human subjects may not conduct such 
research.'' \34\) We note that Institutions have the flexibility to use 
this standard in their evaluations of Investigator SFI, as long as they 
comply with the regulations. Other respondents questioned why the FCOI 
report should contain a rationale for including the conflicted 
Investigator in the research project since the credentials of the 
Investigator are included in the research application or proposal and 
were considered during the peer review process. Although our intent was 
to include the justification for permitting the Investigator with an 
FCOI to remain on the project, as opposed to the scientific rationale 
for the Investigator's involvement in the project, we have removed this 
element from the minimum requirements of the FCOI report to minimize 
confusion.
---------------------------------------------------------------------------

    \34\ AAMC Task Force on Financial Conflicts of Interest in 
Clinical Research: Protecting Subjects, Preserving Trust, Promoting 
Progress--Policy and Guidelines for the Oversight of Individual 
Financial Interests in Human Subjects Research, December 2001 
https://www.aamc.org/download/75302/data/firstreport.pdf.
---------------------------------------------------------------------------

    One respondent suggested it would be more efficient for 
Institutions to describe their monitoring measures annually for all 
FCOI reports rather than on a report-specific basis. We disagree; 
because the monitoring measures may differ depending on the 
requirements of the specific management plan, we believe that retaining 
that element in each report is important. Several respondents 
recommended deleting the requirement for a description of how the 
management plan will safeguard objectivity in the research project, as 
that is inherent in the management plan and should be apparent from the 
other information provided. We believe that documenting this element is 
important to ensure proper oversight; however, to address this comment, 
we have clarified this element to describe how the management plan is 
designed to safeguard objectivity in PHS-funded research.
    One respondent suggested that this requirement be retained only for 
research involving human participants. As discussed in the NPRM and 
above, we posed a number of questions in the ANPRM on the issue of 
whether the regulations should be amended to require specific 
approaches to management of FCOI related to certain types of research 
or alternatively, specific types of financial interests or FCOI. The 
majority of the respondents to the ANPRM thought that this approach 
would not account for the full range of research projects as well as 
the

[[Page 53276]]

large variation in circumstances in which FCOIs may arise. As a result, 
the regulations, including the provisions in this paragraph, impose 
uniform FCOI management responsibilities, regardless of the type of 
research, financial interest, or identified FCOI at issue. Nonetheless, 
we note that Institutions are free to differentially manage FCOI 
depending on the nature of the research as long as they remain in full 
compliance with the regulations.
    A few respondents requested that the regulations include additional 
examples of appropriate elements of a management plan, such as the use 
of independent monitors or a description of circumstances in which 
eliminating an FCOI is necessary. Given the wide range of circumstances 
in which FCOI may occur and the importance of tailoring institutional 
review and determination to each specific case, we believe that 
including additional examples may be interpreted as prescriptive and 
may be misconstrued as the only means of managing a particular type of 
conflict. Nonetheless, as described above, a list of examples of 
conditions or restrictions that might be imposed to manage an FCOI is 
described in 42 CFR 50.605(a)(1) and 45 CFR 94.5(a)(1). One respondent 
requested that the HHS develop templates for reporting FCOIs to the PHS 
Awarding Component. Because the regulations describe the basic 
information required in these reports, we believe that templates are 
unnecessary.
    One respondent noted that the regulations do not state how the PHS 
Awarding Component will respond to the FCOI reports submitted by 
Institutions and recommended that HHS establish a policy on the 
responsibilities of the PHS Awarding Component, while another requested 
that agency staff receive training in the review of FCOI reports 
submitted to the PHS Awarding Component to ensure consistency. In 
response to these comments, we want to assure stakeholders that we have 
in place procedures and guidance on how staff should respond to FCOI 
reports submitted by Institutions, and we provide training on the 
evaluation of information that we receive from Institutions about FCOIs 
with PHS-funded research. We have taken and are continuing to take 
steps to increase oversight of the FCOI regulations. For example, NIH 
has:
     Conducted a thorough review of its system of oversight and 
compliance with respect to the FCOI regulations with the purpose of 
ensuring that a vigorous and effective oversight system is in place.
     Developed an FCOI Reporting Module as a tool for 
Institutions to electronically manage and submit FCOI reports to NIH. 
This module provides consistent reporting of FCOIs to the NIH. The 
system interfaces with the Web-based reporting tool for NIH staff 
already in use and will provide a full spectrum of tracking and 
oversight capabilities for NIH extramural staff. Mandatory use of the 
FCOI Module went into effect during FY 2009.\35\
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    \35\ OMB No. 0925-0417.
---------------------------------------------------------------------------

     Developed an FCOI review protocol for use by staff in 
evaluating institutional FCOI reports and conducted mandatory training 
for extramural program and grants management staff on the use of the 
protocol and other FCOI issues.
     Routinely conduct in-depth reviews of cases of alleged 
FCOI involving extramural grantees and will continue to do so as new 
allegations arise.
     Evaluate and analyze grantee Institutions' FCOI policies 
and practices on an ongoing basis.
     Formed an FCOI Liaison group consisting of representatives 
from each of the NIH Institutes and/or Centers (IC) to discuss FCOI 
issues and guide FCOI activities in their respective ICs, with 
assistance from the Office of Extramural Research.
     Developed and included new language for NIH's ``Notice of 
Award'' template that highlights FCOI requirements.
     Developed and conducted a number of initiatives and site 
visits to evaluate institutional FCOI policies for compliance with the 
regulation. These initiatives include:
    [cir] NIH Pilot Compliance Program on FCOI.
    [cir] NIH Targeted Site Reviews.
     Following evaluation of the institutional FCOI policies, 
publicized on-line ``Lessons Learned'' to encourage enhanced compliance 
in the grantee community.
     Issued a number of communications to remind extramural 
grant recipients of their FCOI compliance responsibilities. These 
communications include:
    [cir] Articles (NIH OER ``Nexus'' newsletter).
    [cir] NIH Guide Notices.
    [cir] E-mails to Institutional officials.
     Continue to respond to grantee questions directed to the 
OER FCOI mailbox concerning compliance with the Federal regulation.
     Provide education and outreach activities aimed at raising 
awareness of the issues surrounding FCOI at the institutional and 
Investigator levels (e.g., NIH Regional Seminars; presentations at 
professional organizations and meetings).
    These policies and guidance will be updated to incorporate all 
revisions implemented in this final rule, and we will continue to train 
the relevant staff, as necessary.
    As proposed in the NPRM, paragraph (b)(4) includes a requirement to 
provide follow-up reports in cases in which an FCOI has been previously 
identified and reported. Specifically, for any FCOI previously reported 
by the Institution with regard to an ongoing PHS-funded research 
project, the Institution shall provide to the PHS Awarding Component an 
annual FCOI report that addresses the status of the FCOI and any 
changes to the management plan for the duration of the PHS-funded 
research project. The annual FCOI report must specify whether the 
financial conflict is still being managed or explain why the FCOI no 
longer exists. The Institution must provide annual FCOI reports to the 
PHS Awarding Component for the duration of the project period 
(including extensions with or without funds) in the time and manner 
specified by the PHS Awarding Component.
    A few respondents suggested that providing a report annually when 
there has been no change to the FCOI or its management is unnecessary. 
We have considered this suggestion but believe that annual 
notification, even if there are no changes, is necessary to provide 
appropriate assurance to the PHS Awarding Component that an identified 
FCOI continues to be managed throughout the period of the PHS-funded 
research. One respondent suggested that the regulations allow the 
Institution to determine the frequency of reporting on identified 
FCOIs, depending on the type of PHS-funded research and the nature of 
the conflict. As discussed above, the regulations impose uniform FCOI 
management responsibilities, regardless of the type of research, 
financial interest, or identified FCOI at issue to account for the full 
range of circumstances in which FCOI may arise. Finally, while several 
respondents requested that the timing of the annual reports be 
determined by the Institution rather than the PHS Awarding Component, 
we have determined that the reports need to be provided in the time and 
manner specified by the PHS Awarding Component in order to facilitate 
appropriate and efficient oversight.
    Finally, as proposed in the NPRM, paragraph (b)(5) includes 
language with regard to FCOI reporting that is similar to the language 
for FCOI management in the re-designated paragraph (a)(6), described 
above. Namely, in addition to

[[Page 53277]]

the types of financial conflicts of interest that must be reported 
pursuant to this section, an Institution may require the reporting of 
other FCOI in its policy on financial conflicts of interest, as the 
Institution deems appropriate.

Remedies (42 CFR 50.606, 45 CFR 94.6)

    In both the NPRM and the Extension Notice, we welcomed public 
comments regarding the need to further revise and clarify this section, 
with respect to PHS' enforcement authority in the event of 
noncompliance with the regulations. Although we did not receive a high 
volume of comments on this topic, we took all feedback into 
consideration when finalizing the rule. We appreciate this opportunity 
to emphasize our commitment to effective oversight, which requires a 
partnership between the PHS Awarding Components and the Institutions. 
The regulations make clear that Institutions are responsible for 
ensuring Investigator compliance with institutional policies and 
procedures, and it is necessary for Institutions to establish 
appropriate consequences for noncompliance. However, it is equally 
essential that the PHS Awarding Components consider appropriate 
enforcement action. We believe that the revised regulations strike an 
appropriate balance of responsibilities in this regard.
    In general, several respondents supported our proposal to refine 
the discussion of remedies in the 1995 regulations. Although one 
respondent expressed concern that the regulations seem to lack 
meaningful enforcement mechanisms and remedies, we believe that the 
Remedies section supports a range of possible corrective and remedial 
actions for the PHS Awarding Components and the Institutions to 
consider. Additionally, we believe it is important to weigh the 
specific circumstances of each particular case when pursuing such 
action(s) and to retain a full range of available options. For that 
reason, we have declined to incorporate some of the additional 
``penalties'' that a few respondents suggested, such as monetary fines, 
dismissals, or jail times for Investigators; fines for Institutions; 
or, as one respondent suggested, ``referrals to the FDA * * * to bar 
participation by the individual in any clinical study designed to seek 
marketing approval.'' Likewise for that reason, we have not 
incorporated the suggestion of another respondent to include a specific 
requirement that if an Institution takes enforcement action against an 
Investigator, PHS should automatically ``impose penalties directly on 
an Investigator.''
    We did, however, agree with one respondent that it would be helpful 
to clarify, in the grants context in particular, that institutional 
sanctions against an Investigator can travel with the Investigator upon 
his or her transfer to another Institution. Specifically, we have 
revised 42 CFR 50.606, paragraph (a), as follows: ``If the failure of 
an Investigator to comply with an Institution's financial conflicts of 
interest policy or a financial conflict of interest management plan 
appears to have biased the design, conduct, or reporting of the PHS-
funded research, the Institution shall promptly notify the PHS Awarding 
Component of the corrective action taken or to be taken. The PHS 
Awarding Component will consider the situation and, as necessary, take 
appropriate action, or refer the matter to the Institution for further 
action, which may include directions to the Institution on how to 
maintain appropriate objectivity in the PHS-funded research project. 
The PHS may, for example, require Institutions employing such an 
Investigator to enforce any applicable corrective actions prior to a 
PHS award or when the transfer of a PHS grant(s) involves such an 
Investigator.''
    This revision is intended to reference the range of options for the 
PHS Awarding Component to consider, depending on the specific 
circumstances at issue. For example, PHS may decide to initiate 
government-wide suspension or debarment of the Investigator under 2 CFR 
part 376; or to use enforcement measures under 45 CFR 74.62, e.g., 
perhaps to make the approval of a transfer contingent upon the former 
Institution's disclosure of the corrective action--including the 
specific sanctions against the Investigator--to the new Institution; 
and/or to use special award conditions under 45 CFR 74.14, e.g., 
perhaps to make the new Institution agree to take the same or similar 
action against that Investigator or explain to the PHS Awarding 
Component in writing why such action was not taken and what alternative 
measures will be used to ensure compliance.
    One respondent suggested that the regulations include a description 
of a process to resolve differences of opinion between the PHS Awarding 
Component and the Institution regarding evaluation and management of 
FCOIs. We declined that change, as we believe it would be unnecessary 
and overly prescriptive to impose a particular process as a regulatory 
requirement; we will continue to work collaboratively with Institutions 
to resolve any such differences on a case by case basis, taking into 
consideration the specific circumstances of each disagreement. We note, 
however, that the Institution may have an opportunity for a hearing, 
appeal, or other administrative process or proceeding to which it is 
entitled under any applicable statute or regulation, in the event that 
the PHS Awarding Component takes enforcement action against the 
Institution.
    As we proposed in NPRM, we also have revised paragraph (b) to 
clarify that the HHS may inquire at any time (i.e., before, during, or 
after award) into any Investigator disclosure of financial interests 
and the Institution's review of, and response to, such disclosure, 
whether or not the disclosure resulted in the Institution's 
determination of an FCOI. Consistent with the 1995 regulations, an 
Institution must submit, or permit on site review of, all records 
pertinent to compliance with the regulations. One respondent suggested 
that the regulations restrict the period during which HHS may inquire 
to a defined number of years after the end of the award period. We have 
not made this change because the effects of compromising objectivity in 
PHS-funded research may continue for some time after the award period. 
Another suggested that the regulations state that HHS may request 
information not deemed relevant to a finding of FCOI only for the 
purpose of investigating an allegation of noncompliance with these 
rules. Although we agree that an allegation of noncompliance is one 
circumstance that could trigger this provision, we disagree that it 
would be appropriate to limit HHS' oversight authority to this specific 
event.\36\
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    \36\ Among other examples of HHS' oversight authority, we note 
that with regard to grants or cooperative agreements from HHS to 
Institution of higher education, hospitals, other non-profit 
organizations, and commercial organizations, HHS awarding agencies 
have the right of timely and unrestricted access to any books, 
documents, papers, or other records of recipients that are pertinent 
to its awards, to make audits, examinations, excerpts, transcripts 
and copies of such documents. See 45 CFR 74.53(4)(e).
---------------------------------------------------------------------------

    In paragraph (b), we also have retained the statement in the 1995 
regulations that, to the extent permitted by law, HHS will maintain the 
confidentiality of all records of financial interests. In response to a 
question from a respondent, we note that this includes the information 
required under 42 CFR 50.605(b) and 45 CFR 94.5(b).
    As we proposed in the NPRM, we have revised paragraph (c) to add 
that in any case in which the HHS determines that a PHS-funded project 
of clinical research whose purpose is to evaluate the safety or 
effectiveness of a drug,

[[Page 53278]]

medical device, or treatment has been designed, conducted, or reported 
by an Investigator with an FCOI that was not managed or reported by the 
Institution as required by the regulations, the Institution must not 
only require the Investigator involved to disclose the FCOI in each 
public presentation of the results of the research, but also to request 
an addendum to previously published presentations. One respondent 
suggested that this requirement may not achieve the desired aim, as 
Investigators could refrain from publicly presenting their results and 
publishers could refuse to publish the addendum or could publish it in 
an inconspicuous manner. We have implemented the proposed language from 
the NPRM because we believe the disclosure requirements as modified 
further the objective of the regulations to promote objectivity in 
research. Institutions are in the position to identify other actions 
that may be appropriate in such instances, depending on the specific 
case. We also note that the provision regarding public presentations 
has been in place since the 1995 regulations and that the revision 
merely expands the potential venues in which the FCOI must be 
disclosed, which is intended to strengthen transparency and 
accountability.

Other HHS Regulations That Apply (42 CFR 50.607)

    As we proposed in the NPRM, we have revised the list of other HHS 
regulations that apply, to update changes that have been made in the 
CFR location or title of the references in this section since 1995. In 
the NPRM, we asked for comment on whether the regulations should be 
further revised to delete this section. Only one respondent suggested 
deleting this section; we have retained it as a useful point of 
reference.

IV. Institutional Conflict of Interest

    Institutional conflict of interest is a subject that is not 
specifically addressed in the 1995 regulations for reasons stated in 
the 1995 final rule.\37\ Because this is a topic of increasing interest 
to HHS as well as in the research community, we invited comment in the 
ANPRM on the possible revision of the regulations to address 
institutional conflict of interest. In particular, we asked (a) How 
``institutional conflict of interest'' would be defined, and (b) what 
an institutional conflict of interest policy would address in order to 
assure the PHS of objectivity in research.\38\ Consistent with the 
public comments that we received on this topic, we continue to believe 
that further careful consideration is necessary before PHS regulations 
could be formulated that would address the subject of institutional 
conflict of interest in the same comprehensive manner as the 1995 
regulations address Investigator FCOI. Because we believe it is 
important to revise the 1995 regulations in a timely manner, specific 
revisions that we proposed in the NPRM were limited to the subject of 
Investigator FCOI.
---------------------------------------------------------------------------

    \37\ 60 FR 35813 (July 11, 1995).
    \38\ 74 FR 21612 (May 8, 2009).
---------------------------------------------------------------------------

    In the NPRM, we asked for public comments on whether the 
regulations should be further revised to require Institutions, at a 
minimum, to adopt some type of policy on institutional conflict of 
interest, even if the scope and elements of the policy remain undefined 
in the regulations. We received a wide range of responses to this 
question, with some respondents stating that the regulations should 
include a basic provision requiring Institutions to have a policy on 
institutional conflict of interest without specifying the nature or 
scope of such a policy, and others suggesting that it would be 
premature to include such a provision in the regulations. Respondents 
in both groups urged HHS to engage the biomedical research community in 
discussions on the definition of institutional conflict of interest and 
how it should be addressed. One respondent suggested that the 
regulations should include a definition of institutional conflict of 
interest and specific provisions for policies addressing the issue.
    We have considered all the comments and believe that requiring 
Institutions to have a policy on institutional conflict of interest 
without providing additional guidance as to the nature and scope of 
that policy would lead to confusion and inconsistencies across 
Institutions. We also believe that substantial additional information 
and deliberations are needed to formulate such guidance. Therefore, we 
have limited the final rule to Investigator conflict of interest. HHS 
will continue to consider the issue of institutional conflict of 
interest together with the biomedical research community, including the 
question of whether it is appropriate to propose specific regulations 
to address this subject.

V. Regulatory Impact Analyses (RIA)

    The following is provided as public information.

Analysis of Impacts

    We have examined the impacts of the amendments to 42 CFR part 50 
subpart F and 45 CFR part 94 under Executive Order 12866, Executive 
Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the 
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 
13563 and 12866 direct agencies to assess all costs and benefits of 
available regulatory alternatives and, if regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts, and equity). Executive Order 13563 emphasizes the 
importance of quantifying both costs and benefits, of reducing costs, 
of harmonizing rules, and of promoting flexibility. This rule has been 
designated a ``significant regulatory action'' although not 
economically significant, under section 3(f) of Executive Order 12866. 
Accordingly, the rule has been reviewed by the Office of Management and 
Budget.
    The Regulatory Flexibility Act requires agencies to analyze 
regulatory options that would minimize any significant impact of the 
rule on small entities. For the purposes of this analysis, small 
entities include small business concerns as defined by the SBA, usually 
businesses with fewer than 500 employees. Approximately 2,800 such 
organizations \39\ apply to NIH for research funding annually, of which 
approximately 1,300 Institutions \40\ are awarded funds. These 
regulations do not cover SBIR/STTR Program Phase I applications or 
awards. Therefore, the provisions of the regulations apply to the 
approximately 800 applicants to the SBIR/STTR Phase II program 
annually, of which approximately 300 Institutions receive funding. 
There is no change to the 1995 regulations that pertain specifically to 
applicant organizations. Rather, all changes to the regulations apply 
only to the approximately 300 small business concerns that receive 
Phase II SBIR/STTR PHS funding. The cost of implementing the amended 
regulations is an allowable cost that may be eligible for reimbursement 
as a Facilities and Administrative cost on PHS-supported grants, 
cooperative agreements and contracts. This could offset the cost 
burdens of implementation. Therefore, we do not believe that the 
changes to the regulations will have a significant economic impact on a 
substantial number of small entities. Our analysis is

[[Page 53279]]

further supported by the small number of FCOI reports submitted by 
small business concerns; for example, ten reports by small business 
concerns were submitted to NIH in FY 2009 and eleven in FY 2010. We 
also considered the impact of the requirement for Investigator training 
on small entities and have lowered the frequency of training required 
from every two years as proposed in the NPRM to every four yours. We 
believe this expanded timeframe will decrease the burden on 
Institutions, including small businesses. In addition, for the 1995 
regulations, NIH developed training materials that Institutions can use 
which are available on the NIH Web site at http://grants.nih.gov/grants/policy/coi/index.htm. NIH will continue to update the training 
materials to ameliorate the burden on Institutions, including small 
businesses.
---------------------------------------------------------------------------

    \39\ All applicant Institution numbers are based on the number 
of Institutions that applied for NIH funding in FY 2008.
    \40\ All applicant Institution numbers are based on the number 
of Institutions that applied for NIH funding in FY 2008.
---------------------------------------------------------------------------

    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires 
that agencies prepare a written statement, which includes an assessment 
of anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted annually for 
inflation with base year of 1995) in any one year.'' The current 
inflation-adjusted statutory threshold is approximately $143.5 
million.\41\ The agency does not expect that the amendments to the 
regulations will result in any 1-year expenditure that would meet or 
exceed this amount.
---------------------------------------------------------------------------

    \41\ Bureau of Labor Statistics inflation calculator.
---------------------------------------------------------------------------

Benefits
    The amendments to the regulations will expand and add transparency 
to Investigator disclosure of Significant Financial Interests as well 
as enhance regulatory compliance and effective oversight of financial 
conflicts of interest. Specifically, the revisions will provide 
Institutions with additional information on Investigator financial 
interests so they can make a more informed evaluation of whether the 
disclosed SFI constitutes an FCOI with PHS-funded research. Also, the 
revisions will provide HHS with additional information on an identified 
FCOI to enable improved oversight. Finally, the revised regulations 
will provide interested stakeholders such as Congress and the public 
with information about Investigator financial interests that were 
identified as an FCOI with research funded by PHS, enabling increased 
transparency and accountability, with the goal of preserving and 
strengthening public trust in the output of the Federal investment in 
biomedical research.
Costs
    Approximately 3000 Institutions that apply for PHS funding annually 
are subject to the regulations. As there are no changes to the 
regulations in the requirements for Institutions that are applying for 
PHS-funding, the amendments will affect the approximately 2000 
organizations (including small businesses but excluding those that 
receive funding through the SBIR/STTR Phase I program) that are awarded 
PHS funding annually and, through the implementation of the regulations 
by the Institutions, to the estimated 38,000 Investigators (using the 
definition of Investigator in the regulations) participating in PHS-
funded research that have SFIs. Many of the revisions expand 
requirements that already existed in the regulations. For instance, the 
number of Investigators who would be required to disclose their SFI is 
unchanged under the revised regulations as the definition of 
Investigator is not changed substantially. That said, however, 
Investigators would be required to disclose a larger number of 
financial interests due to the revisions to the SFI definition (e.g., 
changing the de minimis from $10,000 to $5,000, and including income 
from a subset of non-profit Institutions). Also, Institutions are 
already required to report any identified FCOI to the PHS Awarding 
Component under the 1995 regulations. The revised regulations will 
require these reports to contain additional information. Several new 
requirements are included in the revised regulations, including the 
requirement for making information available upon request and the 
requirement for a retrospective review in those rare cases in which an 
Institution identifies noncompliance with the regulations. We discuss 
the rationale for each of these requirements in the preamble. In sum, 
the estimated burden for current implementation of the 1995 regulations 
is approximately 80% of the burden estimated for implementing the 
revised regulations.
    The cost of implementing the amended regulations is an allowable 
cost that may be eligible for reimbursement as a Facilities and 
Administrative cost on PHS supported grants, cooperative agreements and 
contracts. This could offset some portion of the cost burdens of 
implementation for the affected Institutions and through their 
implementation of the regulations, to the Investigators. Nonetheless, 
we are including a description of the estimated costs of the amendments 
to the regulations for general information.

----------------------------------------------------------------------------------------------------------------
                                                         Frequency of     Estimated cost
   Section of 42 CFR part 50    Number of respondents      response        per response    Estimated annual cost
  subpart F or 45 CFR part 94                              (annual)            \42\                 \43\
----------------------------------------------------------------------------------------------------------------
50.602 or 94.2................  Total: approximately   NA..............  NA..............
                                 3,000 applicant
                                 Institutions and
                                 2,000 awardee
                                 Institutions (based
                                 on FY 2008 numbers)
                                 and an estimated
                                 38,000 Investigators.
50.604 or 94.4
    (a).......................  3,000 \44\...........  1...............  $2,835..........  $8,505,000.
    (b).......................  Institutions: 2,000    Institutions: 1.  Institutions:     Institutions:
                                 \45\.                 Investigators      $210.             $420,000.
                                Investigators: 38,000   0.25 \47\.       Investigators:    Investigators:
                                 \46\.                                    $17.5 \48\.       $665,000.
                                                                         Total: $227.5...  Total: $1,085,000.
    ( c)(1)...................  500 \49\.............  1...............  $35.00..........  $17,500.
    (c)(2)....................  Included in the cost   NA..............  NA..............
                                 estimate in 50.605/
                                 94.5(b)(3).
    (d).......................  3,000 \50\...........  1...............  $35.............  $105,000.
    (e)(1)....................  38,000 \51\..........  1...............  $140............  $5,320,000.

[[Page 53280]]

 
    (e)(2)....................  38,000 \52\..........  1...............  $35.00..........  $1,330,000.
    (e)(3)....................  950 \53\.............  1...............  $17.50..........  $8,313.
    (f).......................  2,000 awardee          1...............  $35.00..........  $70,000.
                                 Institutions.
    (g).......................  Included in the cost   NA..............  NA..............
                                 estimate in 50.605/
                                 94.5(a)(1).
    (h).......................  Included in the cost   NA..............  NA..............
                                 estimate in 50.605/
                                 94.5(b)(3).
    (i).......................  2,000 awardee          1...............  $140............  $280,000.
                                 Institutions.
    (j).......................  Included in the cost   NA..............  NA..............
                                 estimate in 50.604/
                                 94.4(a).
    (k).......................  Included in the cost   NA..............  NA..............
                                 estimate in 50.604/
                                 94.4(a).
50.605 or 94.5
    (a)(1)....................  2,000 awardee          1...............  $70 for review    $2,660,000 for review
                                 Institutions \54\.                       and $2,800 for    of all disclosures
                                                                          developing        plus $2,660,000 for
                                                                          management plan.  developing
                                                                         Total: $2,870...   management plans of
                                                                                            those identified as
                                                                                            FCOI.
                                                                                           Total: $5,320,000.
    (a)(2)....................  950 \55\.............  NA..............  NA..............  NA.
                                The cost is included
                                 in 50.605/94.5(b)(2)
                                 below.
    (a)(3)....................  500 \56\.............  1...............  $105............  $52,500.
    (a)(3)(i).................  50 \57\..............  1...............  $2,800..........  $140,000.
    (a)(3)(ii)................  50 \58\..............  1...............  $2,800..........  $140,000.
    (a)(3)(iii)...............  50...................  1...............  $35.............  $1,750.
    (a)(4)....................  950 \59\.............  1...............  $420............  $399,000.
    (a)(5)....................  2,000 \60\...........  1...............  $175............  $350,000.
    (b)(1)....................  Cost included in       NA..............  NA..............  NA.
                                 50.605(b)(3)/
                                 94.5(b)(3) below.
    (b)(2)....................  50 FCOI reports as in  1 for reporting   $70 for FCOI      $70 x 50 = $3,500 for
                                 a(3)(ii) above \61\.   FCOI and 1 for    report and $70    FCOI report and $70
                                5 mitigation reports    mitigation        for mitigation    x 5 = $350 for
                                 \62\.                  reports in the    report.           mitigation report.
                                                        case bias was                      Total = $3,850.
                                                        determined
                                                        during the
                                                        retrospective
                                                        review.
    (b)(3)....................  950 \63\.............  1...............  $70.............  $66,500.
    (b)(4)....................  950 \64\.............  1...............  $35.00..........  $33,250.
50.606 or 94.6
    (a) \65\..................  20 \66\..............  1...............  $350............  $7,000.
    (c).......................  50 \67\..............  3 \68\..........  $31.50..........  $1,575.
----------------------------------------------------------------------------------------------------------------
Total annual cost: $23,236,238.
\42\ Average burden hours x $35/hour based on recent NIH cost analyses.
\43\ Number of respondents x estimated cost per response.
\44\ Assumes 3,000 applicant Institutions and 80 hours per Institution for formulating and maintaining the
  policy. Also assumes that most Institutions already maintain a public Web site. Therefore, posting the policy
  to the Web site or providing it upon request is an incremental cost--estimated at 1 hour annually.
\45\ Assumes that 2,000 awardee Institutions: 1. Inform Investigators about the policy on an annual basis by
  sending a notification to all Investigators = 1 hour and 2. Annually adapt NIH-provided training materials to
  institutional needs = 5 hours.
\46\ Assumes 38,000 Investigators undergo 2 hours of training every four years. This refers to FCOI training
  only and is based on the use of training materials developed by the NIH and adapted to the Institution's
  needs.
\47\ Once every 4 years.
\48\ $70 every 4 years.
\49\ An estimated maximum 25% of Institutions may have subrecipients in any one year--assuming 1 hour per
  Institution to incorporate the requirement of the regulations into an already existing written agreement.
  Includes burden on subrecipients.
\50\ Assuming that 3,000 Institutions solicit disclosures on an annual basis by sending a notification to all
  Investigators.
\51\ The financial disclosure burden estimate is based upon an Investigator figure of 38,000 with an average
  response time of 4 hours.
\52\ Assuming that updating a disclosure takes less time/effort than creating a new one--1 hour.
\53\ Assuming that only a small number of the 38,000 Investigators will have a new SFI in any year.
\54\ Although an estimated 950 reports of Conflict of Interest are expected annually, the 2,000 responding
  Institutions must review all financial disclosures associated with PHS-funded awards to determine whether any
  conflicts of interest exist. Thus, the review burden of 76,000 hours is based upon estimates that it will take
  on the average 2 hours for an institutional official(s) to review each of 38,000 financial disclosures
  associated with PHS funded awards. The burden for developing a management plan for identified FCOI is
  estimated at 80 hours x 950 cases = 76,000 hours.
\55\ Based on 50.604/94.4(e)(3) above.
\56\ Assuming that this is a rare occurrence, based on prior experience.
\57\ Assuming only a fraction of the newly identified SFIs will constitute FCOI.
\58\ Assuming only a fraction of the newly identified SFIs will constitute FCOI.
\59\ Based on previous assumption of 950 FCOI reports annually--estimated 12 hours annually, which may consist
  of 1 hour monthly or any other division the Institution deems appropriate.
\60\ Since the information could be provided as a simple document or spreadsheet, providing the required
  information to multiple requestors or adding it to an existing Web site is an incremental cost. Updating
  annually does have an additional cost.
\61\ The burden for subsequent reports of conflicts is significantly less, because we do not expect many
  additional reportable conflicts and there will be only a limited number of disclosures to review.

[[Page 53281]]

 
\62\ After retrospective review--the cost of which is accounted for in a(3)(ii) above--we estimate that bias
  will be found in only a fraction of cases.
\63\ Assumes 950 FCOI reports annually x 2 hours to prepare the report/complete an NIH-provided Web form.
\64\ Assumes it takes less time to update a report than to create a new one--1 hour per update.
\65\ This estimate includes inquiries by the PHS Awarding Component as described in 50.606.(b) and 94.6(b) and
  in accordance with 50.604(k) and 94.4(k).
\66\ This burden was originally estimated in the 1995 Final Rule to be no more than 5 instances that the failure
  of an Investigator to comply with the Institution's conflict of interest policy has biased the design, conduct
  or reporting of the research. ``Objectivity in Research, Final Rule'' 60 Fed. Reg. 132 (July 11, 1995) pps.
  35810-35819. This burden estimate, and others was increased in 2002 ``due to increased numbers of Institutions
  and Investigators.'' Although there has been an increase in the number of cases of noncompliance in the past
  few years, the number has not approached this estimate so we believe it is still reasonable.
\67\ Based on 50.605/94.5(a)(3)(i)--of those only a fraction will relate to a project of clinical research whose
  purpose is to evaluate the safety or effectiveness of a drug, medical device, or treatment, but we are
  calculating the maximum estimated cost.
\68\ Assuming an average of 3 publications annually.

Alternatives
    The key alternative to the amendment of these regulations would be 
to continue to operate under the 1995 regulations. In the intervening 
years since the regulations were promulgated, Investigator 
collaborations have become more complex and public scrutiny has 
increased significantly creating an environment that would benefit from 
regulation with more effective means for management and oversight. If 
we continue to operate under the 1995 regulations, we would then lose 
the opportunity to implement enhanced Institutional management of 
Investigator FCOIs related to PHS-funded research, increased oversight 
by the PHS Awarding Component, and enhanced transparency. In addition, 
Congress has expressly directed and supported the ongoing regulation of 
FCOI (42 U.S.C. 216, 289b-1, 299c-4; Sec. 219, Tit. II, Div. D, Pub. L. 
111-117, 123 Stat. 3034), and we agree that strengthening such 
regulation is necessary to enhance public trust and ensure the 
responsible stewardship of Federal funds.

Paperwork Reduction Act

    This final rule contains requirements that are subject to OMB 
approval under the Paperwork Reduction Act of 1995, as amended (44 
U.S.C. chapter 35). Sections 50.604(a), 50.604(b), 50.604(c)(1), 
50.604(d), 50.604(e)(1), 50.604(e)(2), 50.604(e)(3), 50.604(f), 
50.605(a)(1), 50.605(a)(3), 50.605(a)(3)(i), 50.605(a)(3)(ii), 
50.605(a)(4), 50.605(a)(5), 50.605(b)(1), 50.605(b)(2), 50.605(b)(3), 
50.605(b)(4), 50.606(a), 50.606(c); 94.4(a), 94.4(b), 94.4(c)(1), 
94.4(d), 94.4(e)(1), 94.4(e)(2), 94.4(e)(3), 94.4(f), 94.5(a)(1), 
94.5(a)(3), 94.5(a)(3)(i), 94.5(a)(3)(ii), 94.5(a)(4), 94.5(a)(5), 
94.5(b)(1), 94.5(b)(2), 94.5(b)(3), 94.5(b)(4), 94.6(a), and 94.6(c) 
contain reporting and information collection requirements that are 
subject to OMB approval under the Paperwork Reduction Act.
    42 CFR 50.604(i), and 45 CFR 94.4(i) contain recordkeeping 
requirements that are subject to OMB review under the Paperwork 
Reduction Act. The title, description, and respondent description of 
the information collection and recordkeeping requirements contained in 
this revised rule have been submitted to OMB for review. Other 
organizations and individuals desiring to submit comments on the 
information collection and recordkeeping requirements should send their 
comments to: (1) Mikia Currie, Project Clearance Officer, National 
Institutes of Health, Rockledge Center 1, 6705 Rockledge Drive, Room 
3509, Bethesda, MD 20817, telephone 301-594-7949 (not a toll-free 
number); and (2) the Office of Information and Regulatory Affairs, OMB, 
[email protected] or by fax to 202-395-6974, and mark 
``Attention: Desk Officer for the National Institutes of Health, 
Department of Health and Human Services.'' After we obtain OMB 
approval, we will publish the OMB control number in the Federal 
Register.
    Following are details of the estimated burden of implementing the 
revised regulations.

----------------------------------------------------------------------------------------------------------------
                                                         Frequency of
   Section of 42 CFR part 50    Number of respondents      response       Average burden    Annual burden hours
  subpart F or 45 CFR part 94                              (annual)            hours                \69\
----------------------------------------------------------------------------------------------------------------
50.602 or 94.2................  Total: approximately   NA..............  NA..............
                                 3,000 applicant
                                 Institutions and
                                 2,000 awardee
                                 Institutions (based
                                 on FY2008 numbers)
                                 and an estimated
                                 38,000 Investigators.
50.604 or 94.4
    (a).......................  3,000 \70\...........  1...............  81 \71\.........  243,000.
    (b).......................  Institutions: 2,000    Institutions: 1.  Institutions: 6.  Institutions: 12,000.
                                 \72\.                 Investigators     Investigators:    Investigators:
                                Investigators: 38,000   0.25 \74\.        0.5 \75\.         19,000.
                                 \73\.                                                     Total: 31,000.
    ( c)(1)...................  500 \76\.............  1...............  1...............  500.
    (c)(2)....................  Included in the        NA..............  NA..............  NA.
                                 burden estimate in
                                 50.605/94.5 (b)(3).
    (d).......................  3,000 \77\...........  1...............  1...............  3,000.
    (e)(1)....................  38,000 \78\..........  1...............  4...............  152,000.
    (e)(2)....................  38,000 \79\..........  1...............  1...............  38,000.
    (e)(3)....................  950 \80\.............  1...............  0.5.............  475.
    (f).......................  2,000 awardee          1...............  1...............  2,000.
                                 Institutions.
    (g).......................  Included in the        NA..............  NA..............  NA.
                                 burden estimate in
                                 50.605/94.5 (a)(1).
    (h).......................  Included in the        NA..............  NA..............  NA.
                                 burden estimate in
                                 50.605/94.5 (b)(3).
    (i).......................  2,000 awardee          1...............  4...............  8,000.
                                 Institutions.
    (j).......................  Included in the        NA..............  NA..............  NA.
                                 burden estimate in
                                 50.604/94.4 (a).

[[Page 53282]]

 
    (k).......................  Included in the        NA..............  NA..............  NA.
                                 burden estimate in
                                 50.604/94.4 (a).
50.605 or 94.5
    (a)(1)....................  2,000 awardee          1...............  2 hours per       76,000 for reviewing
                                 Institutions \81\.                       disclosure to     disclosures from
                                                                          review plus 80    38,000 Investigators
                                                                          hours per         plus 76,000 for
                                                                          identified FCOI   developing
                                                                          to develop        management plans for
                                                                          management plan.  950 identified FCOIs
                                                                                            = 152,000.
    (a)(2)....................  950 \82\.............  NA..............  NA..............  NA.
                                The burden is
                                 included in 50.605/
                                 94.5 (b)(2) below.
    (a)(3)....................  500 \83\.............  1...............  3...............  1,500.
    (a)(3)(i).................  50 \84\..............  1...............  80..............  4,000.
    (a)(3)(ii)................  50 \85\..............  1...............  80..............  4,000.
    (a)(3)(iii)...............  50...................  1...............  1...............  50.
    (a)(4)....................  950 \86\.............  1...............  12..............  11,400.
    (a)(5)....................  2,000 \87\...........  1...............  5...............  10,000.
    (b)(1)....................  Included in            NA..............  NA..............  NA.
                                 50.605(b)(3)/94.5
                                 (b)(3) below.
    (b)(2)....................  50 FCOI reports as in  1 for reporting   2 for FCOI        50x2 = 100 for FCOI
                                 a(3)(ii) above \88\.   FCOI and 1 for    report and 2      report and 5x2=10
                                5 mitigation reports    mitigation        for mitigation    for mitigation
                                 \89\.                  reports in the    report.           report.
                                                        case bias was                      Total =110.
                                                        determined
                                                        during the
                                                        retrospective
                                                        review.
    (b)(3)....................  950 \90\.............  1...............  2...............  1,900.
    (b)(4)....................  950 \91\.............  1...............  1...............  950.
50.606 or 94.6
    (a) \92\..................  20 \93\..............  1...............  10..............  200.
    (c).......................  50 \94\..............  3 \95\..........  0.3.............  45.
----------------------------------------------------------------------------------------------------------------
Total burden hours: 664,130.
\69\ Number of respondents x average burden hours x frequency of response.
\70\ Assumes 3,000 applicant Institutions and 80 hours per Institution for formulating and maintaining the
  policy. Also assumes that most Institutions already maintain a public Web site. Therefore, posting the policy
  to the Web site or providing it upon request is an incremental burden--estimated at 1 hour annually.
\71\ 80 h for policy formulation and maintenance; 1h for posting the policy or providing it upon request.
\72\ Assumes that 2,000 awardee Institutions: 1. inform Investigators about the policy on an annual basis by
  sending a notification to all Investigators = 1 hour and 2. annually adapt NIH-provided training materials to
  institutional needs = 5 hours.
\73\ Assumes 38,000 Investigators undergo 2 hours of training every four years. This refers to FCOI training
  only and is based on the use of training materials developed by the NIH and adapted to the Institution's
  needs.
\74\ Once every 4 years.
\75\ 2 hours every 4 years.
\76\ An estimated maximum 25% of Institutions may have subrecipients in any one year--assuming 1 hour per
  Institution to incorporate the requirement of the regulations into an already existing written agreement.
  Includes burden on subrecipients.
\77\ Assuming that 3,000 Institutions solicit disclosures on an annual basis by sending a notification to all
  Investigators.
\78\ The financial disclosure burden estimate is based upon an Investigator figure of 38,000 with an average
  response time of 4 hours.
\79\ Assuming that updating a disclosure takes less time/effort than creating a new one--1 hour.
\80\ Assuming that only a small number of the 38,000 Investigators will have a new SFI in any year.
\81\ Although an estimated 950 reports of Conflict of Interest are expected annually, the 2,000 responding
  Institutions must review all financial disclosures associated with PHS-funded awards to determine whether any
  conflicts of interest exist. Thus, the review burden of 76,000 hours is based upon estimates that it will take
  on the average 2 hours for an institutional official(s) to review each of 38,000 financial disclosures
  associated with PHS funded awards. The burden for developing a management plan for identified FCOI is
  estimated at 80 hours x 950 cases = 76,000 hours.
\82\ Based on 50.604/94.4 (e)(3) above.
\83\ Assuming that this is a rare occurrence based on prior experience.
\84\ Assuming only a fraction of the newly identified SFIs will constitute FCOI.
\85\ Assuming only a fraction of the newly identified SFIs will constitute FCOI.
\86\ Based on previous assumption of 950 FCOI reports annually--estimated 12 hours annually, which may consist
  of 1 hour monthly or any other division the Institution deems appropriate.
\87\ Since the information could be provided as a simple document or spreadsheet, providing the required
  information to multiple requestors or adding it to an existing Web site is an incremental burden. Updating
  annually does have an additional burden.
\88\ The burden for subsequent reports of conflicts is significantly less, because we do not expect many
  additional reportable conflicts and there will be only a limited number of disclosures to review.
\89\ After retrospective review--the burden of which is accounted for in a(3)(ii) above--we estimate that bias
  will be found in only a fraction of cases.
\90\ Assumes 950 FCOI reports annually x 2 hours to prepare the report/complete an NIH-provided Web form.
\91\ Assumes it takes less time to update a report than to create a new one--1 hour per update.
\92\ This estimate includes inquiries by the PHS Awarding Component as described in 50.606.(b) and 94.6(b) and
  in accordance with 50.604(k) and 94.4(k).

[[Page 53283]]

 
\93\ This burden was originally estimated in the 1995 Final Rule to be no more than 5 instances that the failure
  of an Investigator to comply with the Institution's conflict of interest policy has biased the design, conduct
  or reporting of the research. ``Objectivity in Research, Final Rule'' 60 FR 132 (July 11, 1995) pps. 35810-
  35819. This burden estimate, and others was increased in 2002 ``due to increased numbers of Institutions and
  Investigators.'' Although there has been an increase in the number of cases of noncompliance in the past few
  years, the number has not approached this estimate so we believe it is still reasonable.
\94\ Number based on 50.605/94.5 (a)(3)(i)--of those only a fraction will relate to a project of clinical
  research whose purpose is to evaluate the safety or effectiveness of a drug, medical device, or treatment, but
  we are calculating the maximum estimated burden.
\95\ Assuming an average of 3 publications annually.

Environmental Impact

    We have determined that this action is of a type that does not 
individually or cumulatively have a significant effect on the human 
environment. Therefore, neither an environmental assessment nor an 
environmental impact statement is required.

Catalogue of Federal Domestic Assistance

    The Catalogue of Federal Domestic Assistance numbered programs 
applicable to this revised rule are:

93.113--Environmental Health
93.121--Oral Diseases and Disorders Research
93.142--NIEHS Hazardous Waste Worker Health and Safety Training
93.143--NIEHS Superfund Hazardous Substances--Basic Research and 
Education
93.172--Human Genome Research
93.173--Research Related to Deafness and Communication Disorders
93.187--Undergraduate Scholarship Program for Individuals from 
Disadvantaged Backgrounds
93.213--Research and Training in Complementary and Alternative 
Medicine
93.233--National Center on Sleep Disorders Research
93.242--Mental Health Research Grants
93.271--Alcohol Research Career Development Awards for Scientists 
and Clinicians
93.272--Alcohol National Research Service Awards for Research 
Training
93.273--Alcohol Research Programs
93.279--Drug Abuse and Addiction Research Programs
93.281--Mental Health Research Career/Scientist Development Awards
93.282--Mental Health National Research Service Awards for Research 
Training
93.286--Discovery and Applied Research for Technological Innovations 
to Improve Human Health
93.307--Minority Health and Health Disparities Research
93.310--Trans-NIH Research Support
93.361--Nursing Research
93.389--National Center for Research Resources
93.393--Cancer Cause and Prevention Research
93.394--Cancer Detection and Diagnosis Research
93.395--Cancer Treatment Research
93.396--Cancer Biology Research
93.397--Cancer Centers Support Grants
93.398--Cancer Research Manpower
93.399--Cancer Control
93.701--Trans-NIH Recovery Act Research Support RECOVERY
93.702--National Center for Research Resources, Recovery Act 
Construction Support RECOVERY
93.837--Cardiovascular Diseases Research
93.838--Lung Diseases Research
93.839--Blood Diseases and Resources Research
93.846--Arthritis, Musculoskeletal and Skin Diseases Research
93.847--Diabetes, Digestive, and Kidney Diseases Extramural Research
93.853--Extramural Research Programs in the Neurosciences and 
Neurological Disorders
93.855--Allergy, Immunology and Transplantation Research
93.856--Microbiology and Infectious Diseases Research
93.859--Biomedical Research and Research Training
93.865--Child Health and Human Development Extramural Research
93.866--Aging Research
93.867--Vision Research
93.879--Medical Library Assistance
93.891--Alcohol Research Center Grants
93.989--International Research and Research Training

List of Subjects in 42 CFR Part 50 and 45 CFR Part 94

    Colleges and universities, Conflict of interests, Contracts, 
Financial disclosure, Grants--health, Grants programs, Non-profit 
organizations, Research, Scientists, Small businesses.

    For the reasons set forth in the preamble, HHS is amending 42 CFR 
chapter I, subchapter D, part 50, and 45 CFR subtitle A, subchapter A, 
part 94 as follows:

TITLE 42--PUBLIC HEALTH

PART 50--POLICIES OF GENERAL APPLICABILITY

0
1. Revise Subpart F to read as follows:
Subpart F--Promoting Objectivity in Research
Sec.
50.601 Purpose.
50.602 Applicability.
50.603 Definitions.
50.604 Responsibilities of Institutions regarding Investigator 
financial conflicts of interest.
50.605 Management and reporting of financial conflicts of interest.
50.606 Remedies.
50.607 Other HHS regulations that apply.

Subpart F--Promoting Objectivity in Research

    Authority: 42 U.S.C. 216, 289b-1, 299c-4; Sec. 219, Tit. II, 
Div. D, Pub. L. 111-117, 123 Stat. 3034.


Sec.  50.601  Purpose.

    This subpart promotes objectivity in research by establishing 
standards that provide a reasonable expectation that the design, 
conduct, and reporting of research funded under Public Health Service 
(PHS) grants or cooperative agreements will be free from bias resulting 
from Investigator financial conflicts of interest.


Sec.  50.602  Applicability.

    This subpart is applicable to each Institution that is applying 
for, or that receives, PHS research funding by means of a grant or 
cooperative agreement and, through the implementation of this subpart 
by the Institution, to each Investigator who is planning to participate 
in, or is participating in, such research; provided, however, that this 
subpart does not apply to SBIR Program Phase I applications. In those 
few cases where an individual, rather than an Institution, is applying 
for, or receives, PHS research funding, PHS Awarding Components will 
make case-by-case determinations on the steps to be taken, consistent 
with this subpart, to provide a reasonable expectation that the design, 
conduct, and reporting of the research will be free from bias resulting 
from a financial conflict of interest of the individual.


Sec.  50.603  Definitions.

    As used in this subpart:
    Disclosure of significant financial interests means an 
Investigator's disclosure of significant financial interests to an 
Institution.
    Financial conflict of interest (FCOI) means a significant financial 
interest that could directly and significantly affect the design, 
conduct, or reporting of PHS-funded research.
    FCOI report means an Institution's report of a financial conflict 
of interest to a PHS Awarding Component.
    Financial interest means anything of monetary value, whether or not 
the value is readily ascertainable.

[[Page 53284]]

    HHS means the United States Department of Health and Human 
Services, and any components of the Department to which the authority 
involved may be delegated.
    Institution means any domestic or foreign, public or private, 
entity or organization (excluding a Federal agency) that is applying 
for, or that receives, PHS research funding.
    Institutional responsibilities means an Investigator's professional 
responsibilities on behalf of the Institution, and as defined by the 
Institution in its policy on financial conflicts of interest, which may 
include for example: activities such as research, research 
consultation, teaching, professional practice, institutional committee 
memberships, and service on panels such as Institutional Review Boards 
or Data and Safety Monitoring Boards.
    Investigator means the project director or principal Investigator 
and any other person, regardless of title or position, who is 
responsible for the design, conduct, or reporting of research funded by 
the PHS, or proposed for such funding, which may include, for example, 
collaborators or consultants.
    Manage means taking action to address a financial conflict of 
interest, which can include reducing or eliminating the financial 
conflict of interest, to ensure, to the extent possible, that the 
design, conduct, and reporting of research will be free from bias.
    PD/PI means a project director or principal Investigator of a PHS-
funded research project; the PD/PI is included in the definitions of 
senior/key personnel and Investigator under this subpart.
    PHS means the Public Health Service of the U.S. Department of 
Health and Human Services, and any components of the PHS to which the 
authority involved may be delegated, including the National Institutes 
of Health (NIH).
    PHS Awarding Component means the organizational unit of the PHS 
that funds the research that is subject to this subpart.
    Public Health Service Act or PHS Act means the statute codified at 
42 U.S.C. 201 et seq.
    Research means a systematic investigation, study or experiment 
designed to develop or contribute to generalizable knowledge relating 
broadly to public health, including behavioral and social-sciences 
research. The term encompasses basic and applied research (e.g., a 
published article, book or book chapter) and product development (e.g., 
a diagnostic test or drug). As used in this subpart, the term includes 
any such activity for which research funding is available from a PHS 
Awarding Component through a grant or cooperative agreement, whether 
authorized under the PHS Act or other statutory authority, such as a 
research grant, career development award, center grant, individual 
fellowship award, infrastructure award, institutional training grant, 
program project, or research resources award.
    Senior/key personnel means the PD/PI and any other person 
identified as senior/key personnel by the Institution in the grant 
application, progress report, or any other report submitted to the PHS 
by the Institution under this subpart.
    Significant financial interest means:
    (1) A financial interest consisting of one or more of the following 
interests of the Investigator (and those of the Investigator's spouse 
and dependent children) that reasonably appears to be related to the 
Investigator's institutional responsibilities:
    (i) With regard to any publicly traded entity, a significant 
financial interest exists if the value of any remuneration received 
from the entity in the twelve months preceding the disclosure and the 
value of any equity interest in the entity as of the date of 
disclosure, when aggregated, exceeds $5,000. For purposes of this 
definition, remuneration includes salary and any payment for services 
not otherwise identified as salary (e.g., consulting fees, honoraria, 
paid authorship); equity interest includes any stock, stock option, or 
other ownership interest, as determined through reference to public 
prices or other reasonable measures of fair market value;
    (ii) With regard to any non-publicly traded entity, a significant 
financial interest exists if the value of any remuneration received 
from the entity in the twelve months preceding the disclosure, when 
aggregated, exceeds $5,000, or when the Investigator (or the 
Investigator's spouse or dependent children) holds any equity interest 
(e.g., stock, stock option, or other ownership interest); or
    (iii) Intellectual property rights and interests (e.g., patents, 
copyrights), upon receipt of income related to such rights and 
interests.
    (2) Investigators also must disclose the occurrence of any 
reimbursed or sponsored travel (i.e., that which is paid on behalf of 
the Investigator and not reimbursed to the Investigator so that the 
exact monetary value may not be readily available), related to their 
institutional responsibilities; provided, however, that this disclosure 
requirement does not apply to travel that is reimbursed or sponsored by 
a Federal, state, or local government agency, an Institution of higher 
education as defined at 20 U.S.C. 1001(a), an academic teaching 
hospital, a medical center, or a research institute that is affiliated 
with an Institution of higher education. The Institution's FCOI policy 
will specify the details of this disclosure, which will include, at a 
minimum, the purpose of the trip, the identity of the sponsor/
organizer, the destination, and the duration. In accordance with the 
Institution's FCOI policy, the institutional official(s) will determine 
if further information is needed, including a determination or 
disclosure of monetary value, in order to determine whether the travel 
constitutes an FCOI with the PHS-funded research.
    (3) The term significant financial interest does not include the 
following types of financial interests: salary, royalties, or other 
remuneration paid by the Institution to the Investigator if the 
Investigator is currently employed or otherwise appointed by the 
Institution, including intellectual property rights assigned to the 
Institution and agreements to share in royalties related to such 
rights; any ownership interest in the Institution held by the 
Investigator, if the Institution is a commercial or for-profit 
organization; income from investment vehicles, such as mutual funds and 
retirement accounts, as long as the Investigator does not directly 
control the investment decisions made in these vehicles; income from 
seminars, lectures, or teaching engagements sponsored by a Federal, 
state, or local government agency, an Institution of higher education 
as defined at 20 U.S.C. 1001(a), an academic teaching hospital, a 
medical center, or a research institute that is affiliated with an 
Institution of higher education; or income from service on advisory 
committees or review panels for a Federal, state, or local government 
agency, an Institution of higher education as defined at 20 U.S.C. 
1001(a), an academic teaching hospital, a medical center, or a research 
institute that is affiliated with an Institution of higher education.
    Small Business Innovation Research (SBIR) Program means the 
extramural research program for small businesses that is established by 
the Awarding Components of the Public Health Service and certain other 
Federal agencies under Public Law 97-219, the Small Business Innovation 
Development Act, as amended. For purposes of this subpart, the term 
SBIR Program also includes the Small Business Technology Transfer 
(STTR) Program, which was established by Public Law 102-564.

[[Page 53285]]

Sec.  50.604  Responsibilities of Institutions regarding Investigator 
financial conflicts of interest.

    Each Institution shall:
    (a) Maintain an up-to-date, written, enforced policy on financial 
conflicts of interest that complies with this subpart, and make such 
policy available via a publicly accessible Web site. If the Institution 
does not have any current presence on a publicly accessible Web site 
(and only in those cases), the Institution shall make its written 
policy available to any requestor within five business days of a 
request. If, however, the Institution acquires a presence on a publicly 
accessible Web site during the time of the PHS award, the requirement 
to post the information on that Web site will apply within 30 calendar 
days. If an Institution maintains a policy on financial conflicts of 
interest that includes standards that are more stringent than this 
subpart (e.g., that require a more extensive disclosure of financial 
interests), the Institution shall adhere to its policy and shall 
provide FCOI reports regarding identified financial conflicts of 
interest to the PHS Awarding Component in accordance with the 
Institution's own standards and within the timeframe prescribed by this 
subpart.
    (b) Inform each Investigator of the Institution's policy on 
financial conflicts of interest, the Investigator's responsibilities 
regarding disclosure of significant financial interests, and of these 
regulations, and require each Investigator to complete training 
regarding the same prior to engaging in research related to any PHS-
funded grant and at least every four years, and immediately when any of 
the following circumstances apply:
    (1) The Institution revises its financial conflict of interest 
policies or procedures in any manner that affects the requirements of 
Investigators;
    (2) An Investigator is new to an Institution; or
    (3) An Institution finds that an Investigator is not in compliance 
with the Institution's financial conflict of interest policy or 
management plan.
    (c) If the Institution carries out the PHS-funded research through 
a subrecipient (e.g., subcontractors or consortium members), the 
Institution (awardee Institution) must take reasonable steps to ensure 
that any subrecipient Investigator complies with this subpart by:
    (1) Incorporating as part of a written agreement with the 
subrecipient terms that establish whether the financial conflicts of 
interest policy of the awardee Institution or that of the subrecipient 
will apply to the subrecipient's Investigators.
    (i) If the subrecipient's Investigators must comply with the 
subrecipient's financial conflicts of interest policy, the subrecipient 
shall certify as part of the agreement referenced above that its policy 
complies with this subpart. If the subrecipient cannot provide such 
certification, the agreement shall state that subrecipient 
Investigators are subject to the financial conflicts of interest policy 
of the awardee Institution for disclosing significant financial 
interests that are directly related to the subrecipient's work for the 
awardee Institution;
    (ii) Additionally, if the subrecipient's Investigators must comply 
with the subrecipient's financial conflicts of interest policy, the 
agreement referenced above shall specify time period(s) for the 
subrecipient to report all identified financial conflicts of interest 
to the awardee Institution. Such time period(s) shall be sufficient to 
enable the awardee Institution to provide timely FCOI reports, as 
necessary, to the PHS as required by this subpart;
    (iii) Alternatively, if the subrecipient's Investigators must 
comply with the awardee Institution's financial conflicts of interest 
policy, the agreement referenced above shall specify time period(s) for 
the subrecipient to submit all Investigator disclosures of significant 
financial interests to the awardee Institution. Such time period(s) 
shall be sufficient to enable the awardee Institution to comply timely 
with its review, management, and reporting obligations under this 
subpart.
    (2) Providing FCOI reports to the PHS Awarding Component regarding 
all financial conflicts of interest of all subrecipient Investigators 
consistent with this subpart, i.e., prior to the expenditure of funds 
and within 60 days of any subsequently identified FCOI.
    (d) Designate an institutional official(s) to solicit and review 
disclosures of significant financial interests from each Investigator 
who is planning to participate in, or is participating in, the PHS-
funded research.
    (e)(1) Require that each Investigator who is planning to 
participate in the PHS-funded research disclose to the Institution's 
designated official(s) the Investigator's significant financial 
interests (and those of the Investigator's spouse and dependent 
children) no later than the time of application for PHS-funded 
research.
    (2) Require each Investigator who is participating in the PHS-
funded research to submit an updated disclosure of significant 
financial interests at least annually, in accordance with the specific 
time period prescribed by the Institution, during the period of the 
award. Such disclosure shall include any information that was not 
disclosed initially to the Institution pursuant to paragraph (e)(1) of 
this section, or in a subsequent disclosure of significant financial 
interests (e.g., any financial conflict of interest identified on a 
PHS-funded project that was transferred from another Institution), and 
shall include updated information regarding any previously disclosed 
significant financial interest (e.g., the updated value of a previously 
disclosed equity interest).
    (3) Require each Investigator who is participating in the PHS-
funded research to submit an updated disclosure of significant 
financial interests within thirty days of discovering or acquiring 
(e.g., through purchase, marriage, or inheritance) a new significant 
financial interest.
    (f) Provide guidelines consistent with this subpart for the 
designated institutional official(s) to determine whether an 
Investigator's significant financial interest is related to PHS-funded 
research and, if so related, whether the significant financial interest 
is a financial conflict of interest. An Investigator's significant 
financial interest is related to PHS-funded research when the 
Institution, through its designated official(s), reasonably determines 
that the significant financial interest: could be affected by the PHS-
funded research; or is in an entity whose financial interest could be 
affected by the research. The Institution may involve the Investigator 
in the designated official(s)'s determination of whether a significant 
financial interest is related to the PHS-funded research. A financial 
conflict of interest exists when the Institution, through its 
designated official(s), reasonably determines that the significant 
financial interest could directly and significantly affect the design, 
conduct, or reporting of the PHS-funded research.
    (g) Take such actions as necessary to manage financial conflicts of 
interest, including any financial conflicts of a subrecipient 
Investigator pursuant to paragraph (c) of this section. Management of 
an identified financial conflict of interest requires development and 
implementation of a management plan and, if necessary, a retrospective 
review and a mitigation report pursuant to Sec.  50.605(a).
    (h) Provide initial and ongoing FCOI reports to the PHS as required 
pursuant to Sec.  50.605(b).

[[Page 53286]]

    (i) Maintain records relating to all Investigator disclosures of 
financial interests and the Institution's review of, and response to, 
such disclosures (whether or not a disclosure resulted in the 
Institution's determination of a financial conflict of interest) and 
all actions under the Institution's policy or retrospective review, if 
applicable, for at least three years from the date the final 
expenditures report is submitted to the PHS or, where applicable, from 
other dates specified in 45 CFR 74.53(b) and 92.42 (b) for different 
situations.
    (j) Establish adequate enforcement mechanisms and provide for 
employee sanctions or other administrative actions to ensure 
Investigator compliance as appropriate.
    (k) Certify, in each application for funding to which this subpart 
applies, that the Institution:
    (1) Has in effect at that Institution an up-to-date, written, and 
enforced administrative process to identify and manage financial 
conflicts of interest with respect to all research projects for which 
funding is sought or received from the PHS;
    (2) Shall promote and enforce Investigator compliance with this 
subpart's requirements including those pertaining to disclosure of 
significant financial interests;
    (3) Shall manage financial conflicts of interest and provide 
initial and ongoing FCOI reports to the PHS Awarding Component 
consistent with this subpart;
    (4) Agrees to make information available, promptly upon request, to 
the HHS relating to any Investigator disclosure of financial interests 
and the Institution's review of, and response to, such disclosure, 
whether or not the disclosure resulted in the Institution's 
determination of a financial conflict of interest; and
    (5) Shall fully comply with the requirements of this subpart.


Sec.  50.605  Management and reporting of financial conflicts of 
interest.

    (a) Management of financial conflicts of interest.
    (1) Prior to the Institution's expenditure of any funds under a 
PHS-funded research project, the designated official(s) of an 
Institution shall, consistent with Sec.  50.604(f): review all 
Investigator disclosures of significant financial interests; determine 
whether any significant financial interests relate to PHS-funded 
research; determine whether a financial conflict of interest exists; 
and, if so, develop and implement a management plan that shall specify 
the actions that have been, and shall be, taken to manage such 
financial conflict of interest. Examples of conditions or restrictions 
that might be imposed to manage a financial conflict of interest 
include, but are not limited to:
    (i) Public disclosure of financial conflicts of interest (e.g., 
when presenting or publishing the research);
    (ii) For research projects involving human subjects research, 
disclosure of financial conflicts of interest directly to participants;
    (iii) Appointment of an independent monitor capable of taking 
measures to protect the design, conduct, and reporting of the research 
against bias resulting from the financial conflict of interest;
    (iv) Modification of the research plan;
    (v) Change of personnel or personnel responsibilities, or 
disqualification of personnel from participation in all or a portion of 
the research;
    (vi) Reduction or elimination of the financial interest (e.g., sale 
of an equity interest); or
    (vii) Severance of relationships that create financial conflicts.
    (2) Whenever, in the course of an ongoing PHS-funded research 
project, an Investigator who is new to participating in the research 
project discloses a significant financial interest or an existing 
Investigator discloses a new significant financial interest to the 
Institution, the designated official(s) of the Institution shall, 
within sixty days: review the disclosure of the significant financial 
interest; determine whether it is related to PHS-funded research; 
determine whether a financial conflict of interest exists; and, if so, 
implement, on at least an interim basis, a management plan that shall 
specify the actions that have been, and will be, taken to manage such 
financial conflict of interest. Depending on the nature of the 
significant financial interest, an Institution may determine that 
additional interim measures are necessary with regard to the 
Investigator's participation in the PHS-funded research project between 
the date of disclosure and the completion of the Institution's review.
    (3) Whenever an Institution identifies a significant financial 
interest that was not disclosed timely by an Investigator or, for 
whatever reason, was not previously reviewed by the Institution during 
an ongoing PHS-funded research project (e.g., was not timely reviewed 
or reported by a subrecipient), the designated official(s) shall, 
within sixty days: review the significant financial interest; determine 
whether it is related to PHS-funded research; determine whether a 
financial conflict of interest exists; and, if so:
    (i) Implement, on at least an interim basis, a management plan that 
shall specify the actions that have been, and will be, taken to manage 
such financial conflict of interest going forward;
    (ii)(A) In addition, whenever a financial conflict of interest is 
not identified or managed in a timely manner including failure by the 
Investigator to disclose a significant financial interest that is 
determined by the Institution to constitute a financial conflict of 
interest; failure by the Institution to review or manage such a 
financial conflict of interest; or failure by the Investigator to 
comply with a financial conflict of interest management plan, the 
Institution shall, within 120 days of the Institution's determination 
of noncompliance, complete a retrospective review of the Investigator's 
activities and the PHS-funded research project to determine whether any 
PHS-funded research, or portion thereof, conducted during the time 
period of the noncompliance, was biased in the design, conduct, or 
reporting of such research.
    (B) The Institution is required to document the retrospective 
review; such documentation shall include, but not necessarily be 
limited to, all of the following key elements:
    (1) Project number;
    (2) Project title;
    (3) PD/PI or contact PD/PI if a multiple PD/PI model is used;
    (4) Name of the Investigator with the FCOI;
    (5) Name of the entity with which the Investigator has a financial 
conflict of interest;
    (6) Reason(s) for the retrospective review;
    (7) Detailed methodology used for the retrospective review (e.g., 
methodology of the review process, composition of the review panel, 
documents reviewed);
    (8) Findings of the review; and
    (9) Conclusions of the review.
    (iii) Based on the results of the retrospective review, if 
appropriate, the Institution shall update the previously submitted FCOI 
report, specifying the actions that will be taken to manage the 
financial conflict of interest going forward. If bias is found, the 
Institution is required to notify the PHS Awarding Component promptly 
and submit a mitigation report to the PHS Awarding Component. The 
mitigation report must include, at a minimum, the key elements 
documented in the retrospective review above and a description of the 
impact of the bias on the research project and the Institution's plan 
of action or actions taken to eliminate or mitigate the effect of the 
bias (e.g., impact on the research

[[Page 53287]]

project; extent of harm done, including any qualitative and 
quantitative data to support any actual or future harm; analysis of 
whether the research project is salvageable). Thereafter, the 
Institution will submit FCOI reports annually, as specified elsewhere 
in this subpart. Depending on the nature of the financial conflict of 
interest, an Institution may determine that additional interim measures 
are necessary with regard to the Investigator's participation in the 
PHS-funded research project between the date that the financial 
conflict of interest or the Investigator's noncompliance is determined 
and the completion of the Institution's retrospective review.
    (4) Whenever an Institution implements a management plan pursuant 
to this subpart, the Institution shall monitor Investigator compliance 
with the management plan on an ongoing basis until the completion of 
the PHS-funded research project.
    (5)(i) Prior to the Institution's expenditure of any funds under a 
PHS-funded research project, the Institution shall ensure public 
accessibility, via a publicly accessible Web site or written response 
to any requestor within five business days of a request, of information 
concerning any significant financial interest disclosed to the 
Institution that meets the following three criteria:
    (A) The significant financial interest was disclosed and is still 
held by the senior/key personnel as defined by this subpart;
    (B) The Institution determines that the significant financial 
interest is related to the PHS-funded research; and
    (C) The Institution determines that the significant financial 
interest is a financial conflict of interest.
    (ii) The information that the Institution makes available via a 
publicly accessible Web site or written response to any requestor 
within five business days of a request, shall include, at a minimum, 
the following: the Investigator's name; the Investigator's title and 
role with respect to the research project; the name of the entity in 
which the significant financial interest is held; the nature of the 
significant financial interest; and the approximate dollar value of the 
significant financial interest (dollar ranges are permissible: $0-
$4,999; $5,000-$9,999; $10,000-$19,999; amounts between $20,000-
$100,000 by increments of $20,000; amounts above $100,000 by increments 
of $50,000), or a statement that the interest is one whose value cannot 
be readily determined through reference to public prices or other 
reasonable measures of fair market value.
    (iii) If the Institution uses a publicly accessible Web site for 
the purposes of this subsection, the information that the Institution 
posts shall be updated at least annually. In addition, the Institution 
shall update the Web site within sixty days of the Institution's 
receipt or identification of information concerning any additional 
significant financial interest of the senior/key personnel for the PHS-
funded research project that was not previously disclosed, or upon the 
disclosure of a significant financial interest of senior/key personnel 
new to the PHS-funded research project, if the Institution determines 
that the significant financial interest is related to the PHS-funded 
research and is a financial conflict of interest. The Web site shall 
note that the information provided is current as of the date listed and 
is subject to updates, on at least an annual basis and within 60 days 
of the Institution's identification of a new financial conflict of 
interest. If the Institution responds to written requests for the 
purposes of this subsection, the Institution will note in its written 
response that the information provided is current as of the date of the 
correspondence and is subject to updates, on at least an annual basis 
and within 60 days of the Institution's identification of a new 
financial conflict of interest, which should be requested subsequently 
by the requestor.
    (iv) Information concerning the significant financial interests of 
an individual subject to paragraph (a)(5) of this section shall remain 
available, for responses to written requests or for posting via the 
Institution's publicly accessible Web site for at least three years 
from the date that the information was most recently updated.
    (6) In addition to the types of financial conflicts of interest as 
defined in this subpart that must be managed pursuant to this section, 
an Institution may require the management of other financial conflicts 
of interest in its policy on financial conflicts of interest, as the 
Institution deems appropriate.
    (b) Reporting of financial conflicts of interest.
    (1) Prior to the Institution's expenditure of any funds under a 
PHS-funded research project, the Institution shall provide to the PHS 
Awarding Component an FCOI report regarding any Investigator's 
significant financial interest found by the Institution to be 
conflicting and ensure that the Institution has implemented a 
management plan in accordance with this subpart. In cases in which the 
Institution identifies a financial conflict of interest and eliminates 
it prior to the expenditure of PHS-awarded funds, the Institution shall 
not submit an FCOI report to the PHS Awarding Component.
    (2) For any significant financial interest that the Institution 
identifies as conflicting subsequent to the Institution's initial FCOI 
report during an ongoing PHS-funded research project (e.g., upon the 
participation of an Investigator who is new to the research project), 
the Institution shall provide to the PHS Awarding Component, within 
sixty days, an FCOI report regarding the financial conflict of interest 
and ensure that the Institution has implemented a management plan in 
accordance with this subpart. Pursuant to paragraph (a)(3)(ii) of this 
section, where such FCOI report involves a significant financial 
interest that was not disclosed timely by an Investigator or, for 
whatever reason, was not previously reviewed or managed by the 
Institution (e.g., was not timely reviewed or reported by a 
subrecipient), the Institution also is required to complete a 
retrospective review to determine whether any PHS-funded research, or 
portion thereof, conducted prior to the identification and management 
of the financial conflict of interest was biased in the design, 
conduct, or reporting of such research. Additionally, pursuant to 
paragraph (a)(3)(iii) of this section, if bias is found, the 
Institution is required to notify the PHS Awarding Component promptly 
and submit a mitigation report to the PHS Awarding Component.
    (3) Any FCOI report required under paragraphs (b)(1) or (b)(2) of 
this section shall include sufficient information to enable the PHS 
Awarding Component to understand the nature and extent of the financial 
conflict, and to assess the appropriateness of the Institution's 
management plan. Elements of the FCOI report shall include, but are not 
necessarily limited to the following:
    (i) Project number;
    (ii) PD/PI or Contact PD/PI if a multiple PD/PI model is used;
    (iii) Name of the Investigator with the financial conflict of 
interest;
    (iv) Name of the entity with which the Investigator has a financial 
conflict of interest;
    (v) Nature of the financial interest (e.g., equity, consulting fee, 
travel reimbursement, honorarium);
    (vi) Value of the financial interest (dollar ranges are 
permissible: $0-$4,999; $5,000-$9,999; $10,000-$19,999; amounts between 
$20,000-$100,000 by increments of $20,000; amounts above $100,000 by 
increments of $50,000), or a statement that the interest is one whose 
value cannot be readily determined through reference to

[[Page 53288]]

public prices or other reasonable measures of fair market value;
    (vii) A description of how the financial interest relates to the 
PHS-funded research and the basis for the Institution's determination 
that the financial interest conflicts with such research; and
    (viii) A description of the key elements of the Institution's 
management plan, including:
    (A) Role and principal duties of the conflicted Investigator in the 
research project;
    (B) Conditions of the management plan;
    (C) How the management plan is designed to safeguard objectivity in 
the research project;
    (D) Confirmation of the Investigator's agreement to the management 
plan;
    (E) How the management plan will be monitored to ensure 
Investigator compliance; and
    (F) Other information as needed.
    (4) For any financial conflict of interest previously reported by 
the Institution with regard to an ongoing PHS-funded research project, 
the Institution shall provide to the PHS Awarding Component an annual 
FCOI report that addresses the status of the financial conflict of 
interest and any changes to the management plan for the duration of the 
PHS-funded research project. The annual FCOI report shall specify 
whether the financial conflict is still being managed or explain why 
the financial conflict of interest no longer exists. The Institution 
shall provide annual FCOI reports to the PHS Awarding Component for the 
duration of the project period (including extensions with or without 
funds) in the time and manner specified by the PHS Awarding Component.
    (5) In addition to the types of financial conflicts of interest as 
defined in this subpart that must be reported pursuant to this section, 
an Institution may require the reporting of other financial conflicts 
of interest in its policy on financial conflicts of interest, as the 
Institution deems appropriate.


Sec.  50.606  Remedies.

    (a) If the failure of an Investigator to comply with an 
Institution's financial conflicts of interest policy or a financial 
conflict of interest management plan appears to have biased the design, 
conduct, or reporting of the PHS-funded research, the Institution shall 
promptly notify the PHS Awarding Component of the corrective action 
taken or to be taken. The PHS Awarding Component will consider the 
situation and, as necessary, take appropriate action, or refer the 
matter to the Institution for further action, which may include 
directions to the Institution on how to maintain appropriate 
objectivity in the PHS-funded research project. PHS may, for example, 
require Institutions employing such an Investigator to enforce any 
applicable corrective actions prior to a PHS award or when the transfer 
of a PHS grant(s) involves such an Investigator.
    (b) The PHS Awarding Component and/or HHS may inquire at any time 
before, during, or after award into any Investigator disclosure of 
financial interests and the Institution's review (including any 
retrospective review) of, and response to, such disclosure, regardless 
of whether the disclosure resulted in the Institution's determination 
of a financial conflict of interest. An Institution is required to 
submit, or permit on site review of, all records pertinent to 
compliance with this subpart. To the extent permitted by law, HHS will 
maintain the confidentiality of all records of financial interests. On 
the basis of its review of records or other information that may be 
available, the PHS Awarding Component may decide that a particular 
financial conflict of interest will bias the objectivity of the PHS-
funded research to such an extent that further corrective action is 
needed or that the Institution has not managed the financial conflict 
of interest in accordance with this subpart. The PHS Awarding Component 
may determine that imposition of special award conditions under 45 CFR 
74.14 and 92.12, or suspension of funding or other enforcement action 
under 45 CFR 74.62 and 92.43, is necessary until the matter is 
resolved.
    (c) In any case in which the HHS determines that a PHS-funded 
project of clinical research whose purpose is to evaluate the safety or 
effectiveness of a drug, medical device, or treatment has been 
designed, conducted, or reported by an Investigator with a financial 
conflict of interest that was not managed or reported by the 
Institution as required by this subpart, the Institution shall require 
the Investigator involved to disclose the financial conflict of 
interest in each public presentation of the results of the research and 
to request an addendum to previously published presentations.


Sec.  50.607  Other HHS regulations that apply.

    Several other regulations and policies apply to this subpart. They 
include, but are not necessarily limited to:

2 CFR part 376--Nonprocurement debarment and suspension (HHS)
42 CFR part 50, subpart D--Public Health Service grant appeals 
procedure
45 CFR part 16--Procedures of the Departmental Grant Appeals Board
45 CFR part 74--Uniform administrative requirements for awards and 
subawards to institutions of higher education, hospitals, other 
nonprofit organizations, and commercial organizations
45 CFR part 79--Program fraud civil remedies
45 CFR part 92--Uniform administrative requirements for grants and 
cooperative agreements to State, local, and tribal governments

TITLE 45--PUBLIC WELFARE

0
2. Revise Part 94 to read as follows:

PART 94--RESPONSIBLE PROSPECTIVE CONTRACTORS

Sec.
94.1 Purpose.
94.2 Applicability.
94.3 Definitions.
94.4 Responsibilities of Institutions regarding Investigator 
financial conflicts of interest.
94.5 Management and reporting of financial conflicts of interest.
94.6 Remedies.

    Authority:  42 U.S.C. 216, 289b-1, 299c-4.


Sec.  94.1  Purpose.

    This part promotes objectivity in research by establishing 
standards that provide a reasonable expectation that the design, 
conduct, and reporting of research performed under PHS contracts will 
be free from bias resulting from Investigator financial conflicts of 
interest.


Sec.  94.2  Applicability.

    This part is applicable to each Institution that submits a 
proposal, or that receives, Public Health Service (PHS) research 
funding by means of a contract and, through the implementation of this 
part by the Institution, to each Investigator who is planning to 
participate in, or is participating in such research; provided, 
however, that this part does not apply to SBIR Program Phase I 
applications.


Sec.  94.3  Definitions.

    As used in this part:
    Contractor means an entity that provides property or services under 
contract for the direct benefit or use of the Federal Government.
    Disclosure of significant financial interests means an 
Investigator's disclosure of significant financial interests to an 
Institution.
    Financial conflict of interest (FCOI) means a significant financial 
interest that could directly and significantly

[[Page 53289]]

affect the design, conduct, or reporting of PHS-funded research.
    FCOI report means an Institution's report of a financial conflict 
of interest to a PHS Awarding Component.
    Financial interest means anything of monetary value, whether or not 
the value is readily ascertainable.
    HHS means the United States Department of Health and Human 
Services, and any components of the Department to which the authority 
involved may be delegated.
    Institution means any domestic or foreign, public or private, 
entity or organization (excluding a Federal agency) that submits a 
proposal, or that receives, PHS research funding.
    Institutional responsibilities means an Investigator's professional 
responsibilities on behalf of the Institution, and as defined by the 
Institution in its policy on financial conflicts of interest, which may 
include for example: activities such as research, research 
consultation, teaching, professional practice, institutional committee 
memberships, and service on panels such as Institutional Review Boards 
or Data and Safety Monitoring Boards.
    Investigator means the project director or principal Investigator 
and any other person, regardless of title or position, who is 
responsible for the design, conduct, or reporting of research funded by 
the PHS, or proposed for such funding, which may include, for example, 
collaborators or consultants.
    Key personnel includes the PD/PI and any other personnel considered 
to be essential to work performance in accordance with HHSAR subpart 
352.242-70 and identified as key personnel in the contract proposal and 
contract.
    Manage means taking action to address a financial conflict of 
interest, which can include reducing or eliminating the financial 
conflict of interest, to ensure, to the extent possible, that the 
design, conduct, and reporting of research will be free from bias.
    PD/PI means a project director or principal Investigator of a PHS-
funded research project; the PD/PI is included in the definitions of 
key personnel and Investigator under this part.
    PHS means the Public Health Service of the U.S. Department of 
Health and Human Services, and any components of the PHS to which the 
authority involved may be delegated, including the National Institutes 
of Health (NIH).
    PHS Awarding Component means the organizational unit of the PHS 
that funds the research that is subject to this part.
    Public Health Service Act or PHS Act means the statute codified at 
42 U.S.C. 201 et seq.
    Research means a systematic investigation, study or experiment 
designed to develop or contribute to generalizable knowledge relating 
broadly to public health, including behavioral and social-sciences 
research. The term encompasses basic and applied research (e.g., a 
published article, book or book chapter) and product development (e.g., 
a diagnostic test or drug). As used in this part, the term includes any 
such activity for which research funding is available from a PHS 
Awarding Component through a contract, whether authorized under the PHS 
Act or other statutory authority.
    Significant financial interest means:
    (1) A financial interest consisting of one or more of the following 
interests of the Investigator (and those of the Investigator's spouse 
and dependent children) that reasonably appears to be related to the 
Investigator's institutional responsibilities:
    (i) With regard to any publicly traded entity, a significant 
financial interest exists if the value of any remuneration received 
from the entity in the twelve months preceding the disclosure and the 
value of any equity interest in the entity as of the date of 
disclosure, when aggregated, exceeds $5,000. For purposes of this 
definition, remuneration includes salary and any payment for services 
not otherwise identified as salary (e.g., consulting fees, honoraria, 
paid authorship); equity interest includes any stock, stock option, or 
other ownership interest, as determined through reference to public 
prices or other reasonable measures of fair market value;
    (ii) With regard to any non-publicly traded entity, a significant 
financial interest exists if the value of any remuneration received 
from the entity in the twelve months preceding the disclosure, when 
aggregated, exceeds $5,000, or when the Investigator (or the 
Investigator's spouse or dependent children) holds any equity interest 
(e.g., stock, stock option, or other ownership interest); or
    (iii) Intellectual property rights and interests (e.g., patents, 
copyrights), upon receipt of income related to such rights and 
interests.
    (2) Investigators also must disclose the occurrence of any 
reimbursed or sponsored travel (i.e., that which is paid on behalf of 
the Investigator and not reimbursed to the Investigator so that the 
exact monetary value may not be readily available), related to their 
Institutional responsibilities; provided, however, that this disclosure 
requirement does not apply to travel that is reimbursed or sponsored by 
a Federal, state, or local government agency, an Institution of higher 
education as defined at 20 U.S.C. 1001(a), an academic teaching 
hospital, a medical center, or a research institute that is affiliated 
with an Institution of higher education. The Institution's FCOI policy 
will specify the details of this disclosure, which will include, at a 
minimum, the purpose of the trip, the identity of the sponsor/
organizer, the destination, and the duration. In accordance with the 
Institution's FCOI policy, the Institutional official(s) will determine 
if further information is needed, including a determination or 
disclosure of monetary value, in order to determine whether the travel 
constitutes an FCOI with the PHS-funded research.
    (3) The term significant financial interest does not include the 
following types of financial interests: salary, royalties, or other 
remuneration paid by the Institution to the Investigator if the 
Investigator is currently employed or otherwise appointed by the 
Institution, including intellectual property rights assigned to the 
Institution and agreements to share in royalties related to such 
rights; any ownership interest in the Institution held by the 
Investigator, if the Institution is a commercial or for-profit 
organization; income from investment vehicles, such as mutual funds and 
retirement accounts, as long as the Investigator does not directly 
control the investment decisions made in these vehicles; income from 
seminars, lectures, or teaching engagements sponsored by a Federal, 
state, or local government agency, an Institution of higher education 
as defined at 20 U.S.C. 1001(a), an academic teaching hospital, a 
medical center, or a research institute that is affiliated with an 
Institution of higher education; or income from service on advisory 
committees or review panels for a Federal, state, or local government 
agency, an Institution of higher education as defined at 20 U.S.C. 
1001(a), an academic teaching hospital, a medical center, or a research 
institute that is affiliated with an Institution of higher education.
    Small Business Innovation Research (SBIR) Program means the 
extramural research program for small businesses that is established by 
the Awarding Components of the Public Health Service and certain other 
Federal agencies under Public Law 97-219, the Small Business Innovation 
Development Act, as amended. For purposes of this part, the term SBIR 
Program also includes the Small Business Technology

[[Page 53290]]

Transfer (STTR) Program, which was established by Public Law 102-564.


Sec.  94.4  Responsibilities of Institutions regarding Investigator 
financial conflicts of interest.

    Each Institution shall:
    (a) Maintain an up-to-date, written, enforced policy on financial 
conflicts of interest that complies with this part, and make such 
policy available via a publicly accessible Web site. If the Institution 
does not have any current presence on a publicly accessible Web site 
(and only in those cases), the Institution shall make its written 
policy available to any requestor within five business days of a 
request. If, however, the Institution acquires a presence on a publicly 
accessible Web site during the time of the PHS award, the requirement 
to post the information on that Web site will apply within 30 calendar 
days. If an Institution maintains a policy on financial conflicts of 
interest that includes standards that are more stringent than this part 
(e.g., that require a more extensive disclosure of financial 
interests), the Institution shall adhere to its policy and shall 
provide FCOI reports regarding identified financial conflicts of 
interest to the PHS Awarding Component in accordance with the 
Institution's own standards and within the timeframe prescribed by this 
part.
    (b) Inform each Investigator of the Institution's policy on 
financial conflicts of interest, the Investigator's responsibilities 
regarding disclosure of significant financial interests, and of these 
regulations, and require each Investigator to complete training 
regarding the same prior to engaging in research related to any PHS-
funded contract and at least every four years, and immediately when any 
of the following circumstances apply:
    (1) The Institution revises its financial conflict of interest 
policies or procedures in any manner that affects the requirements of 
Investigators;
    (2) An Investigator is new to an Institution; or
    (3) An Institution finds that an Investigator is not in compliance 
with the Institution's financial conflict of interest policy or 
management plan.
    (c) If the Institution carries out the PHS-funded research through 
a subrecipient (e.g., subcontractors, or consortium members), the 
Institution (awardee Institution) must take reasonable steps to ensure 
that any subrecipient Investigator complies with this part by
    (1) Incorporating as part of a written agreement with the 
subrecipient terms that establish whether the financial conflicts of 
interest policy of the awardee Institution or that of the subrecipient 
will apply to the subrecipient's Investigators.
    (i) If the subrecipient's Investigators must comply with the 
subrecipient's financial conflicts of interest policy, the subrecipient 
shall certify as part of the agreement referenced above that its policy 
complies with this part. If the subrecipient cannot provide such 
certification, the agreement shall state that subrecipient 
Investigators are subject to the financial conflicts of interest policy 
of the awardee Institution for disclosing significant financial 
interests that are directly related to the subrecipient's work for the 
awardee Institution;
    (ii) Additionally, if the subrecipient's Investigators must comply 
with the subrecipient's financial conflicts of interest policy, the 
agreement referenced above shall specify time period(s) for the 
subrecipient to report all identified financial conflicts of interest 
to the awardee Institution. Such time period(s) shall be sufficient to 
enable the awardee Institution to provide timely FCOI reports, as 
necessary, to the PHS as required by this part;
    (iii) Alternatively, if the subrecipient's Investigators must 
comply with the awardee Institution's financial conflicts of interest 
policy, the agreement referenced above shall specify time period(s) for 
the subrecipient to submit all Investigator disclosures of significant 
financial interests to the awardee Institution. Such time period(s) 
shall be sufficient to enable the awardee Institution to comply timely 
with its review, management, and reporting obligations under this part.
    (2) Providing FCOI reports to the PHS Awarding Component regarding 
all financial conflicts of interest of all subrecipient Investigators 
consistent with this part, i.e., prior to the expenditure of funds and 
within 60 days of any subsequently identified FCOI.
    (d) Designate an institutional official(s) to solicit and review 
disclosures of significant financial interests from each Investigator 
who is planning to participate in, or is participating in, the PHS-
funded research.
    (e)(1) Require that each Investigator who is planning to 
participate in the PHS-funded research disclose to the Institution's 
designated official(s) the Investigator's significant financial 
interests (and those of the Investigator's spouse and dependent 
children) no later than date of submission of the Institution's 
proposal for PHS-funded research.
    (2) Require each Investigator who is participating in the PHS-
funded research to submit an updated disclosure of significant 
financial interests at least annually, in accordance with the specific 
time period prescribed by the Institution, during the period of the 
award. Such disclosure shall include any information that was not 
disclosed initially to the Institution pursuant to paragraph (e)(1) of 
this section, or in a subsequent disclosure of significant financial 
interests (e.g., any financial conflict of interest identified on a 
PHS-funded project that was transferred from another Institution), and 
shall include updated information regarding any previously disclosed 
significant financial interest (e.g., the updated value of a previously 
disclosed equity interest).
    (3) Require each Investigator who is participating in the PHS-
funded research to submit an updated disclosure of significant 
financial interests within thirty days of discovering or acquiring 
(e.g., through purchase, marriage, or inheritance) a new significant 
financial interest.
    (f) Provide guidelines consistent with this part for the designated 
institutional official(s) to determine whether an Investigator's 
significant financial interest is related to PHS-funded research and, 
if so related, whether the significant financial interest is a 
financial conflict of interest. An Investigator's significant financial 
interest is related to PHS-funded research when the Institution, 
through its designated official(s), reasonably determines that the 
significant financial interest: Could be affected by the PHS-funded 
research; or is in an entity whose financial interest could be affected 
by the research. The Institution may involve the Investigator in the 
designated official(s)'s determination of whether a significant 
financial interest is related to the PHS-funded research. A financial 
conflict of interest exists when the Institution, through its 
designated official(s), reasonably determines that the significant 
financial interest could directly and significantly affect the design, 
conduct, or reporting of the PHS-funded research.
    (g) Take such actions as necessary to manage financial conflicts of 
interest, including any financial conflicts of a subrecipient 
Investigator pursuant to paragraph (c) of this section. Management of 
an identified financial conflict of interest requires development and 
implementation of a management plan and, if necessary, a retrospective

[[Page 53291]]

review and mitigation report pursuant to Sec.  94.5(a).
    (h) Provide initial and ongoing FCOI reports to the PHS as required 
pursuant to Sec.  94.5(b).
    (i) Maintain records relating to all Investigator disclosures of 
financial interests and the Institution's review of, and response to, 
such disclosures (whether or not a disclosure resulted in the 
Institution's determination of a financial conflict of interest), and 
all actions under the Institution's policy or retrospective review, if 
applicable, for at least three years from the date of final payment or, 
where applicable, for the time periods specified in 48 CFR part 4, 
subpart 4.7.
    (j) Establish adequate enforcement mechanisms and provide for 
employee sanctions or other administrative actions to ensure 
Investigator compliance as appropriate.
    (k) Certify, in each contract proposal to which this part applies, 
that the Institution:
    (1) Has in effect at that Institution an up-to-date, written, and 
enforced administrative process to identify and manage financial 
conflicts of interest with respect to all research projects for which 
funding is sought or received from the PHS;
    (2) Shall promote and enforce Investigator compliance with this 
part's requirements including those pertaining to disclosure of 
significant financial interests;
    (3) Shall manage financial conflicts of interest and provide 
initial and ongoing FCOI reports to the PHS Awarding Component 
consistent with this part;
    (4) Agrees to make information available, promptly upon request, to 
the HHS relating to any Investigator disclosure of financial interests 
and the Institution's review of, and response to, such disclosure, 
whether or not the disclosure resulted in the Institution's 
determination of a financial conflict of interest; and
    (5) Shall fully comply with the requirements of this part.


Sec.  94.5  Management and reporting of financial conflicts of 
interest.

    (a) Management of financial conflicts of interest.
    (1) Prior to the Institution's expenditure of any funds under a 
PHS-funded research project, the designated official(s) of an 
Institution shall, consistent with Sec.  94.4(f): review all 
Investigator disclosures of significant financial interests; determine 
whether any significant financial interests relate to PHS-funded 
research; determine whether a financial conflict of interest exists; 
and, if so, develop and implement a management plan that shall specify 
the actions that have been, and shall be, taken to manage such 
financial conflict of interest. Examples of conditions or restrictions 
that might be imposed to manage a financial conflict of interest 
include, but are not limited to:
    (i) Public disclosure of financial conflicts of interest (e.g., 
when presenting or publishing the research);
    (ii) For research projects involving human subjects research, 
disclosure of financial conflicts of interest directly to participants;
    (iii) Appointment of an independent monitor capable of taking 
measures to protect the design, conduct, and reporting of the research 
against bias, resulting from the financial conflict of interest;
    (iv) Modification of the research plan;
    (v) Change of personnel or personnel responsibilities, or 
disqualification of personnel from participation in all or a portion of 
the research;
    (vi) Reduction or elimination of the financial interest (e.g., sale 
of an equity interest); or
    (vii) Severance of relationships that create financial conflicts.
    (2) Whenever, in the course of an ongoing PHS-funded research 
project, an Investigator who is new to participating in the research 
project discloses a significant financial interest or an existing 
Investigator discloses a new significant financial interest to the 
Institution, the designated official(s) of the Institution shall, 
within sixty days: review the disclosure of the significant financial 
interest; determine whether it is related to PHS-funded research; 
determine whether a financial conflict of interest exists; and, if so, 
implement, on at least an interim basis, a management plan that shall 
specify the actions that have been, and will be, taken to manage such 
financial conflict of interest. Depending on the nature of the 
significant financial interest, an Institution may determine that 
additional interim measures are necessary with regard to the 
Investigator's participation in the PHS-funded research project between 
the date of disclosure and the completion of the Institution's review.
    (3) Whenever an Institution identifies a significant financial 
interest that was not disclosed timely by an Investigator or, for 
whatever reason, was not previously reviewed by the Institution during 
an ongoing PHS-funded research project (e.g., was not timely reviewed 
or reported by a subrecipient), the designated official(s) shall, 
within sixty days: review the significant financial interest; determine 
whether it is related to PHS-funded research; determine whether a 
financial conflict of interest exists; and, if so:
    (i) Implement, on at least an interim basis, a management plan that 
shall specify the actions that have been, and will be, taken to manage 
such financial conflict of interest going forward;
    (ii) (A) In addition, whenever a financial conflict of interest is 
not identified or managed in a timely manner including failure by the 
Investigator to disclose a significant financial interest that is 
determined by the Institution to constitute a financial conflict of 
interest; failure by the Institution to review or manage such a 
financial conflict of interest; or failure by the Investigator to 
comply with a financial conflict of interest management plan, the 
Institution shall, within 120 days of the Institution's determination 
of noncompliance, complete a retrospective review of the Investigator's 
activities and the PHS-funded research project to determine whether any 
PHS-funded research, or portion thereof, conducted during the time 
period of the noncompliance, was biased in the design, conduct, or 
reporting of such research.
    (B) The Institution is required to document the retrospective 
review; such documentation shall include, but not necessarily be 
limited to, all of the following key elements:
    (1) Project number;
    (2) Project title;
    (3) PD/PI or contact PD/PI if a multiple PD/PI model is used;
    (4) Name of the Investigator with the FCOI;
    (5) Name of the entity with which the Investigator has a financial 
conflict of interest;
    (6) Reason(s) for the retrospective review;
    (7) Detailed methodology used for the retrospective review (e.g., 
methodology of the review process, composition of the review panel, 
documents reviewed);
    (8) Findings of the review; and
    (9) Conclusions of the review.
    (iii) Based on the results of the retrospective review, if 
appropriate, the Institution shall update the previously submitted FCOI 
report, specifying the actions that will be taken to manage the 
financial conflict of interest going forward. If bias is found, the 
Institution is required to notify the PHS Awarding Component promptly 
and submit a mitigation report to the PHS Awarding Component. The 
mitigation report must include, at a minimum, the key elements 
documented in the retrospective review above and a description of the 
impact of the bias on the research project and the Institution's

[[Page 53292]]

plan of action or actions taken to eliminate or mitigate the effect of 
the bias (e.g., impact on the research project; extent of harm done, 
including any qualitative and quantitative data to support any actual 
or future harm; analysis of whether the research project is 
salvageable). Thereafter, the Institution will submit FCOI reports 
annually, as specified elsewhere in this part. Depending on the nature 
of the financial conflict of interest, an Institution may determine 
that additional interim measures are necessary with regard to the 
Investigator's participation in the PHS-funded research project between 
the date that the financial conflict of interest or the Investigator's 
noncompliance is determined and the completion of the Institution's 
retrospective review.
    (4) Whenever an Institution implements a management plan pursuant 
to this part, the Institution shall monitor Investigator compliance 
with the management plan on an ongoing basis until the completion of 
the PHS-funded research project.
    (5)(i) Prior to the Institution's expenditure of any funds under a 
PHS-funded research project, the Institution shall ensure public 
accessibility, via a publicly accessible Web site or written response 
to any requestor within five business days of a request, of information 
concerning any significant financial interest disclosed to the 
Institution that meets the following three criteria:
    (A) The significant financial interest was disclosed and is still 
held by key personnel as defined in this part;
    (B) The Institution determines that the significant financial 
interest is related to the PHS-funded research; and
    (C) The Institution determines that the significant financial 
interest is a financial conflict of interest.
    (ii) The information that the Institution makes available via a 
publicly accessible Web site or written response to any requestor 
within five business days of a request, shall include, at a minimum, 
the following: The Investigator's name; the Investigator's title and 
role with respect to the research project; the name of the entity in 
which the significant financial interest is held; the nature of the 
significant financial interest; and the approximate dollar value of the 
significant financial interest (dollar ranges are permissible: $0-
$4,999; $5,000-$9,999; $10,000-$19,999; amounts between $20,000-
$100,000 by increments of $20,000; amounts above $100,000 by increments 
of $50,000), or a statement that the interest is one whose value cannot 
be readily determined through reference to public prices or other 
reasonable measures of fair market value.
    (iii) If the Institution uses a publicly accessible Web site for 
the purposes of this subsection, the information that the Institution 
posts shall be updated at least annually. In addition, the Institution 
shall update the Web site within sixty days of the Institution's 
receipt or identification of information concerning any additional 
significant financial interest of the senior/key personnel for the PHS-
funded research project that was not previously disclosed, or upon the 
disclosure of a significant financial interest of senior/key personnel 
new to the PHS-funded research project, if the Institution determines 
that the significant financial interest is related to the PHS-funded 
research and is a financial conflict of interest. The Web site shall 
note that the information provided is current as of the date listed and 
is subject to updates, on at least an annual basis and within 60 days 
of the Institution's identification of a new financial conflict of 
interest. If the Institution responds to written requests for the 
purposes of this subsection, the Institution will note in its written 
response that the information provided is current as of the date of the 
correspondence and is subject to updates, on at least an annual basis 
and within 60 days of the Institution's identification of a new 
financial conflict of interest, which should be requested subsequently 
by the requestor.
    (iv) Information concerning the significant financial interests of 
an individual subject to paragraph (a)(5) of this section shall remain 
available, for responses to written requests or for posting via the 
Institution's publicly accessible Web site for at least three years 
from the date that the information was most recently updated.
    (6) In addition to the types of financial conflicts of interest as 
defined in this part that must be managed pursuant to this section, an 
Institution may require the management of other financial conflicts of 
interest in its policy on financial conflicts of interest, as the 
Institution deems appropriate.
    (b) Reporting of financial conflicts of interest.
    (1) Prior to the Institution's expenditure of any funds under a 
PHS-funded research project, the Institution shall provide to the PHS 
Awarding Component an FCOI report regarding any Investigator's 
significant financial interest found by the Institution to be 
conflicting and ensure that the Institution has implemented a 
management plan in accordance with this part. In cases in which the 
Institution identifies a financial conflict of interest and eliminates 
it prior to the expenditure of PHS-awarded funds, the Institution shall 
not submit an FCOI report to the PHS Awarding Component.
    (2) For any significant financial interest that the Institution 
identifies as conflicting subsequent to the Institution's initial FCOI 
report during an ongoing PHS-funded research project (e.g., upon the 
participation of an Investigator who is new to the research project), 
the Institution shall provide to the PHS Awarding Component, within 
sixty days, an FCOI report regarding the financial conflict of interest 
and ensure that the Institution has implemented a management plan in 
accordance with this part. Pursuant to paragraph (a)(3)(ii) of this 
section, where such FCOI report involves a significant financial 
interest that was not disclosed timely by an Investigator or, for 
whatever reason, was not previously reviewed or managed by the 
Institution (e.g., was not timely reviewed or reported by a 
subrecipient), the Institution also is required to complete a 
retrospective review to determine whether any PHS-funded research, or 
portion thereof, conducted prior to the identification and management 
of the financial conflict of interest was biased in the design, 
conduct, or reporting of such research. Additionally, pursuant to 
paragraph (a)(3)(iii) of this section, if bias is found, the 
Institution is required to notify the PHS Awarding Component promptly 
and submit a mitigation report to the PHS Awarding Component.
    (3) Any FCOI report required under paragraphs (b)(1) or (b)(2) of 
this section shall include sufficient information to enable the PHS 
Awarding Component to understand the nature and extent of the financial 
conflict, and to assess the appropriateness of the Institution's 
management plan. Elements of the FCOI report shall include, but are not 
necessarily limited to the following:
    (i) Project/Contract number;
    (ii) PD/PI or Contact PD/PI if a multiple PD/PI model is used;
    (iii) Name of the Investigator with the financial conflict of 
interest;
    (iv) Name of the entity with which the Investigator has a financial 
conflict of interest;
    (v) Nature of the financial interest (e.g., equity, consulting fee, 
travel reimbursement, honorarium);
    (vi) Value of the financial interest (dollar ranges are 
permissible: $0-$4,999; $5,000-$9,999; $10,000-$19,999; amounts between 
$20,000-$100,000 by increments of $20,000; amounts above $100,000 by 
increments of $50,000), or a statement that the

[[Page 53293]]

interest is one whose value cannot be readily determined through 
reference to public prices or other reasonable measures of fair market 
value;
    (vii) A description of how the financial interest relates to the 
PHS-funded research and the basis for the Institution's determination 
that the financial interest conflicts with such research; and
    (viii) A description of the key elements of the Institution's 
management plan, including:
    (A) Role and principal duties of the conflicted Investigator in the 
research project;
    (B) Conditions of the management plan;
    (C) How the management plan is designed to safeguard objectivity in 
the research project;
    (D) Confirmation of the Investigator's agreement to the management 
plan;
    (E) How the management plan will be monitored to ensure 
Investigator compliance; and
    (F) Other information as needed.
    (4) For any financial conflict of interest previously reported by 
the Institution with regard to an ongoing PHS-funded research project, 
the Institution shall provide to the PHS Awarding Component an annual 
FCOI report that addresses the status of the financial conflict of 
interest and any changes to the management plan for the duration of the 
PHS-funded research project. The annual FCOI report shall specify 
whether the financial conflict is still being managed or explain why 
the financial conflict of interest no longer exists. The Institution 
shall provide annual FCOI reports to the PHS Awarding Component for the 
duration of the project period (including extensions with or without 
funds) in the time and manner specified by the PHS Awarding Component.
    (5) In addition to the types of financial conflicts of interest as 
defined in this part that must be reported pursuant to this section, an 
Institution may require the reporting of other financial conflicts of 
interest in its policy on financial conflicts of interest, as the 
Institution deems appropriate.


Sec.  94.6  Remedies.

    (a) If the failure of an Investigator to comply with an 
Institution's financial conflicts of interest policy or a financial 
conflict of interest management plan appears to have biased the design, 
conduct, or reporting of the PHS-funded research, the Institution shall 
promptly notify the PHS Awarding Component of the corrective action 
taken or to be taken. The PHS Awarding Component will consider the 
situation and, as necessary, take appropriate action, or refer the 
matter to the Institution for further action, which may include 
directions to the Institution on how to maintain appropriate 
objectivity in the PHS-funded research project.
    (b) The PHS Awarding Component and/or HHS may inquire at any time 
(before, during, or after award) into any Investigator disclosure of 
financial interests and the Institution's review of, and response to, 
such disclosure, regardless of whether or not the disclosure resulted 
in the Institution's determination of a financial conflict of interest. 
An Institution is required to submit, or permit on site review of, all 
records pertinent to compliance with this part. To the extent permitted 
by law, HHS will maintain the confidentiality of all records of 
financial interests. On the basis of its review of records or other 
information that may be available, the PHS Awarding Component may 
decide that a particular financial conflict of interest will bias the 
objectivity of the PHS-funded research to such an extent that further 
corrective action is needed or that the Institution has not managed the 
financial conflict of interest in accordance with this part. The PHS 
Awarding Component may determine that issuance of a Stop Work Order by 
the Contracting Officer or other enforcement action is necessary until 
the matter is resolved.
    (c) In any case in which the HHS determines that a PHS-funded 
project of clinical research whose purpose is to evaluate the safety or 
effectiveness of a drug, medical device, or treatment has been 
designed, conducted, or reported by an Investigator with a financial 
conflict of interest that was not managed or reported by the 
Institution as required by this part, the Institution shall require the 
Investigator involved to disclose the financial conflict of interest in 
each public presentation of the results of the research and to request 
an addendum to previously published presentations.

    Dated: February 24, 2011.
Francis S. Collins,
Director, National Institutes of Health.
    Approved: March 2, 2011.
Kathleen Sebelius,
Secretary.
[FR Doc. 2011-21633 Filed 8-23-11; 8:45 am]
BILLING CODE 4140-01-P