DECEMBER 1989 - VOLUME 10 - NUMBER 12
T H E F R O N T
Capitulating to intense pressure from universities and the biomedical industry, Secretary of Health and Human Services Louis Sullivan recently quashed conflict of interest guidelines proposed by the National Institutes of Health (NIH).
The proposed guidelines recommended that recipients of funding from NIH or the Alcohol, Drug Abuse, and Mental Health Administration disclose their financial holdings and divest their stock holdings in companies whose products they test.
In scrapping the guidelines, Sullivan said it is "important that we not impose on our scientific community regulatory burdens which may be unnecessary or counterproductive. Likewise, it is important that we not unnecessarily jeopardize the international leadership position we have built up through years of cooperative government and private investment."
NIH initially proposed the guidelines in response to Congressional pressure and several well-publicized incidents involving conflicts of interest. Most of the Congressional pressure came from Representative Ted Weiss, D-N.Y., and his Human Resources and Intergovernmental Relations Subcommittee. The Subcommittee scrutinized NlH's conflict of interest policy at hearings held in 1988 and 1989 to examine scientific fraud and university-industry relations.
Weiss's hearings focused attention on several previously reported conflicts of interest. At a Harvard-affiliated hospital, for example, a researcher, Scheffer Tseng, distorted the results of experiments he conducted for a company, Spectra Pharmaceutical Services, Inc., established to market an eye ointment he had developed. Declaring the ointment a success by virtue of his fraudulent data, Tseng was able to jack up the price of Spectra stock. He then sold his Spectra holdings at a reported profit of $1 million. The faculty overseer who should have enforced Harvard's conflict of interest guidelines failed to do so, apparently because he owned stock in Spectra and profited from Tseng's deceit.
Downplaying the significance and extent of conflicts, universities and industry lobbied hard against the NIH guidelines, showering NIH with over 700 letters. Almost all of the nation's preeminent research universities, including Yale, Stanford, the Massachusetts Institute of Technology, several campuses of the University of California and Harvard submitted formal comments opposing the guidelines. Prestigious professional organizations and hospitals voiced their objections, as did dozens of small biotechnology companies and several large pharmaceutical corporations, such as Pfizer and Hoffman-LaRoche. Massachusetts Governor Michael Dukakis, on behalf of the Massachusetts Biotechnology Center of Excellence, also criticized the guidelines.
The university-based opponents expressed extreme hostility to the guidelines. Kenneth A. Smith, MIT vice president for research called them "flawed beyond redemption." William C. Kelly, vice president for research at the University of Michigan, wrote that "they apprehend a simple, static, unidimensional, and curiously old-fashioned vision of the world of a faculty member." He called them "fatally flawed." The dean of the engineering school at the University of Texas at Dallas accused NIH of "promulgating nonsense." The associate vice chancellor for academic affairs at the University of San Francisco, Karl J. Hittelman, called the guidelines "alarming."
Industry opponents voiced equally strong criticisms. An executive at the Reliable Chemical Co. suggested the guidelines would "just hand the entire biotechnology field to the Japanese." The CEO of Seragen wrote that the guidelines would cause "the U.S. biomedical industry to languish in a second-rate position."
Opponents also claimed that the guidelines would harm the "technology transfer" process. Having a financial interest in the commercialization of their research provides professors the incentive they need to participate in moving ideas from the laboratory to the marketplace, they argued. Expressing an extreme version of this position, Frederick Fluegel of Matrix Partners wrote, "Financial incentives are what make a capitalist society work. One need only to look at innovation in the communist or socialist countries to understand this issue."
That the guidelines evoked vituperative objections from universities and industry is ironic. Because they were proposed as "guidelines" rather than as "regulations," compliance with them would have been voluntary. Thus, the stock holdings prohibited by the guidelines were actually "voluntarily prohibited."
While the guidelines' phrasing suggested they would be broadly interpreted, NIH, in fact, planned on applying them narrowly, according to Janet Newburgh, NIH Institution Liaison Officer. For example, the guidelines said that no recipient of NIH funding "shall be allowed to have personal equity holdings in any company that would be affected by the outcome of the research" sponsored by NIH. But Newburgh stated that this provision would only (voluntarily) prohibit researchers from holding stocks in companies whose products they were testing. In most cases, scientists would have been able to hold stock in companies sponsoring their research. Other financial arrangements, such as consultancies, would have been permitted in all instances.
Leonard Minsky, Executive Director of the National Coalition for Universities in the Public Interest and a supporter of strict conflict of interest standards, thinks the guidelines were "never sincerely promoted by NIH." NIH was "under a lot of pressure from Congress and [specifically] Ted Weiss," so it promulgated the guidelines in order to "generate a lot of resistance among" universities and industry. Having received an overwhelmingly negative response from a mobilized university and business community, Minsky believes, NIH was able to use the response as a justification for scrapping the guidelines.
Other evidence supports Minsky's theory. Kenneth Sloan, associate professor at the University of Florida, reported to NIH that the University's vice president for sponsored research called the guidelines ridiculous and said they had been written that way on purpose to insure that they would not be accepted. An aide to Representative Weiss says the theory "is not inconsistent with the way things have been handled" by NIH. A meeting held by NIH in June 1989 to discuss conflicts of interest, the aide notes, featured administrators rather than researchers and seemed designed to attract criticism.
NIH denies that it proposed the guidelines in order to generate criticism. Don Ralbovsky, a spokesman for NIH, says the guidelines were put forward as a "good faith effort." Similarly, Dr. Katherine Bick, Deputy Director for Extramural Research at NIH, says NIH is "not so Machiavellian" that it would propose guidelines it wanted to see abandoned.
The future of NlH's conflict of interest policy is murky, but some change is probably inevitable. NIH and Sullivan's office say they remain committed to implementing new standards in the form of mandatory regulations. If NIH does not move quickly to implement stronger regulations, however, Congress will probably enact legislation on the issue. "That seems where [we are] headed now," Weiss's assistant says, adding that legislation "will make the scientific community much more unhappy than they were with the guidelines."
- Robert Weissman
The Politics of Penta
Environmental Protection Agency (EPA) officials are once again under attack. This time they are accused of bowing to pressure from wood-treatment industry lobbyists and softening once- stringent regulatory proposals concerning the manufacture of a dioxin-contaminated pesticide and the disposal of its hazardous wastes. The charges are made in "The Politics of Penta," a report recently released by the environmental group Greenpeace. The report traces the process by which the EPA's regulatory proposals for Pentachlorophenol (Penta), a compound used extensively in the wood treatment industry, were eventually watered down in response to industry and Reagan administration pressure.
Penta's effectiveness as a pesticide made it a great commercial success. By the late 1960s, however, it was linked to skin diseases, birth defects and the death of infants in a hospital using Penta-laced laundry detergent. In 1978, the EPA issued a notice that Penta registration was under review and could be terminated.
While this notice signalled an apparent EPA willingness to rid the environment of the dangerous toxin, Penta registration posed a regulatory dilemma. Stringent regulations based on the policy that there is no safe level of dioxin could affect other government interests, such as dioxin-producing municipal garbage incineration projects and litigation over dioxin-contaminated Agent Orange.
The EPA's regulatory dilemma was further magnified by environmental statutes. Under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), which governs the manufacture and use of Penta, environmentally harmful products may be registered as long as the product's benefits outweigh its risks. Armed with the knowledge that the EPA must weigh the benefits against the risks and motivated by the fear that strict regulations would economically devastate the industry, the wood treatment lobby initiated a campaign to soften any proposed regulations.
According to the report, during the Reagan years EPA officials were eager to cooperate with the industry. Starting in 1981, EPA officials routinely met in secret with industry representatives to negotiate Penta regulations. In 1986, the EPA announced that production of Penta could continue with limited agency oversight of labelling and other consumer awareness programs. The EPA imposed ceilings on certain dioxins in Penta, but Greenpeace says that the ceilings are "weakened" and suggests that the EPA has not sufficiently monitored dioxin levels in Penta.
The weakened limits signalled a victory for industry, but the uses of Penta, not just its production, were still open to regulation. The process of treating wood with Penta, not just the process of creating the chemical, generates contaminants that accumulate in and around factory sites. The EPA had to examine the management of Penta's hazardous waste, not under FIFRA, but rather under the Resource Conservation and Recovery Act (RCRA).
The EPA considered two possible listings for the wastes under RCRA. The first option was to list Penta wastes as "acutely hazardous;" this would impose the strictest standards for waste management. The second option, to list Penta wastes as "toxic," would impose far less stringent and less costly requirements. The EPA also had to determine if these RCRA listings would apply to wood treatment wastes, or solely to wastes from the manufacture of Penta.
Armed with evidence that wood treatment waste contains contaminants such as 2,3,7,8-TCDD (considered the most toxic dioxin) and hexadioxin (labelled carcinogenic in a 1981 National Cancer Institute study), EPA chemist Dr. Cate Jenkins prepared a May 1986 memo calling for wood treatment wastes to be designated "acutely hazardous." Peer review of the memo, requested by an industry contractor who criticized Jenkins' work, confirmed her findings. In February 1987, Jenkins prepared a draft Federal Register notice that echoed the proposals in the May memo.
Faced with the likelihood of the most stringent waste management requirements, industry lobbyists mobilized to quash Jenkins' recommendation. They argued that an "acutely hazardous" listing would establish a "stigma," driving waste contractors away and imposing prohibitive costs. Industry representatives proposed, instead, that companies test their own wastes and determine, without agency oversight, which wastes required which disposal methods.
The lobbyists, once again, stressed the economic damage that stringent regulations would impose. However, under RCRA, unlike FIFRA, risk assessment arguments are prohibited in determining listings.
Despite this prohibition, Jenkins' superiors invited industry input in the decision process. EPA officials, according to the report, held secret meetings with industry representatives. Jenkins told Multinational Monitor that such meetings were unnecessary and, perhaps, illegal. Except for the purpose of gathering data, Jenkins notes, "... there's no reason we would ever need to meet with a wood preserver ... There's never any reason we would need to meet the trade association. That's not a data source."
Jenkins questioned her superiors about the purpose of these meetings and suggested that the "stigmatization" argument, with its economic impact underpinnings, might use an illegal criteria for determining listings. Jenkins' superiors, notes the report, consciously and repeatedly disregarded her concerns.
In September 1987, Jenkins was removed from the project. In December 1988, the EPA released a new Federal Register listing proposal that assigned Penta wood treatment wastes the "toxic" designation instead of the originally proposed "acutely hazardous" listing.
To justify the listing proposal, the EPA had to provide a rationale other than the stigmatization argument (which had been declared an illegal basis for RCRA decisions in a court case involving recycled oil wastes). First, the EPA suggested that TCDD had not been found in wood treatment wastes. When asked how the EPA could make such a claim in light of substantiated data documenting TCDD contamination, Jenkins said that EPA officials "... just lied, just covered it up, just falsified the data."
The EPA also suggested that hexadioxin was not, in fact, a carcinogen, in spite of the National Cancer Institute study presenting strong evidence to the contrary. To substantiate this claim, the EPA cited a study submitted by Vulcan Chemical Company, the only remaining U.S. Penta producer.
The EPA listing proposal "breaks precedent with other listings for other contaminated wastes," says Helen Perivier of Greenpeace in Seattle, because Penta wastes are the sole dioxin- contaminated wastes proposed to be listed merely as "toxic." Greenpeace argues that the manufacture and sale of Penta should be banned and all wood treatment wastes from Penta should be designated "acutely hazardous." When asked if she believed that the EPA might reverse its present stand, Carol Van Strum, a co- author of the report, said she thought it unlikely since, "It's my firm conviction that the EPA is a public relations firm that runs interference for polluters."
Responding to the report, the American Wood Preservers Institute (AWPI), the primary industry lobby, expressed disappointment and called allegations in the report "unjustified." An AWPI representative stated, "...the Greenpeace approach does nothing to protect human health and the environment at those sites or to expedite cleanups."
Jenkins, who has sued the EPA under the "whistle-blower" statute, continues to battle for more stringent listings. She has filed a formal review of the December 1988 proposal, and she told Multinational Monitor that she intends "to stay at EPA until this is played out." The EPA must submit a final listing by June 30, 1990.
- Tom Ruwitch