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 New Ethics Rules Cost NIH Another Top Researcher
 
 By Michael S. Rosenwald  and Rick Weiss
 
   James F. Battey, chief of the National Institutes of Health's high-profile human-stem-cell program and director of that agency's deafness institute, will retire in September after more than 20 years at the agency, citing his inability to comply with strict new conflict-of-interest rules that have roiled the NIH internally and prompted a backlash in the broader science and business communities.
 
 Battey is the fourth high-profile researcher to announce plans to leave since the new rules were unveiled in early February and is the first institute director to do so.
 
 Agency scientists say the departures are emblematic of the new reality at NIH, in which rules curtailing what stocks researchers can own and regulating their relationships with drug companies, scientific organizations and even medical journals have set the agency against a trend of encouraging closer ties among researchers, firms and think tanks.
 
 In interviews recently, agency scientists said they have confronted problems as small as being turned down from accepting token travel reimbursements to professional conferences and as large as, in Battey's case, being expected to divest holdings from a trust fund he manages for his family.
 
 "The new rules imposed an insurmountable problem for me," said Battey, who has applied for the job of president of the new California Institute of Regenerative Medicine. "I manage a family trust  . . . which supports the education of my father's seven grandchildren, and it contains assets I'm told I'd have to divest. That would cost a lot of money, and I can't do that to my family."
 
 Yesterday, in a memo e-mailed to employees, a group of senior agency scientists detailed a legal opinion they recently received that made clear just how broad the new rules are.
 
 "Basically this means anything NIHers do outside  --  whether getting paid for it or not, from singing in a jazz group to selling art or jewelry, from volunteering at charity organizations to membership in a school or community organization to developing their own small business completely unrelated to biomedical science  --  requires prior NIH approval," the memo says. "We find this very disturbing. It is intrusive and scary. It suggests the NIH owns our lives away from work."
 
 The backlash has moved beyond the agency's Bethesda campus. A renowned Duke University physician has postponed accepting a job running the National Institute of Environmental Health Sciences. Scientific organizations have protested to government officials, and biotech companies have complained about the loss of NIH scientists from advisory boards and consulting deals.
 
 "For a small company like us, it's a huge blow," said Ginette Serrero, chief executive of Columbia biotech start-up A&G Pharmaceutical Inc. The rules forced a senior NIH cancer researcher to remove himself from the firm's scientific advisory board. 
 
 "Having someone from the NIH on your board is a tremendous value, for advice, and because it gives you a lot of credibility" with investors, Serrero said. "It's not like you can turn around and replace someone like that with the flick of a finger."
 
 Agitation has been fermenting since early February, when agency director Elias A. Zerhouni imposed the rules after a congressional committee found that about 120 NIH scientists had not disclosed outside consulting deals, as required. Less than a month later, the NIH acknowledged that most of the researchers had been unfairly accused because of agency clerical errors.
 
 "That's the sad reality of the whole thing. . . . A few people ruined it for everyone," said Ashani Weeraratna, a cancer researcher who was told that she could not accept a $200 train ticket from a physician's education group to present a paper at a conference in New York.
 
 "I was like, 'What?' " Weeraratna said. "I felt awful. I had to call and tell them to find someone else. It was embarrassing." The rules are meant to guard against potential conflicts between public and commercial science, but NIH researchers said the requirements harshly upend the unique  --  and they contend productive  --  collaborative environment that has evolved at NIH alongside the biotech industry. NIH and industry experts said that since the new rules were announced, agency researchers have been backing away from consulting deals that, while helpful to drug and biotech companies, also gave scientists insight into the application of their work.
 
 Though a few researchers collected hundreds of thousands of dollars in consulting fees, most arrangements involved a few days of service for less than $10,000 and occasionally stock options  --  which helped keep researchers at NIH despite salaries far less than they could earn elsewhere. Junior researchers might enter NIH earning $40,000 annually, but they had the prestige of working at a renowned institution alongside the best in the field and could look forward to a career in which they could also dabble in the commercial world. The relationships are vital throughout the drug industry and are especially important to Montgomery County, where officials tout the NIH's presence when attempting to woo biotech companies. NIH researchers often work closely with area firms, and some have launched businesses with the help of local venture capitalists.
 
 "A lot of these researchers really want to understand the commercial side of their work," said Jerry Feigen, former director of the Macklin Center for Entrepreneurship at Montgomery College, who teaches a business class at NIH that features lectures by local venture investors.
 
 "If the NIH wants to land the brightest brains, they have to come to grips with helping do-good researchers understand the commercial side of science," Feigen said. "I don't think there's anything wrong with that."
 
 Agency officials said classes like Feigen's will continue and argue that concerns about the impact on private industry are somewhat exaggerated. Researchers can still work with companies as part of their official NIH duties, particularly under agreements in which each side provides resources to develop products.
 
  And NIH employees will still be entitled to up to $150,000 a year in royalties if companies license their discoveries and develop a product. MedImmune Inc., one of Maryland's most successful biotechs, developed Synagis, a billion-dollar product, this way.
 
 But researchers said the restrictions have already chilled interactions that advance scientific know-how, and they are irritated by having to end relationships with scientific organizations. Under the new rules, many NIH employees cannot hold executive positions  --  even on a volunteer basis  --  with trade or professional organizations, because those groups often represent scientists who could be grant recipients. They also cannot accept awards or prizes of more than $200.
 
 Robert L. Nussbaum, chief of the Genetic Disease Research Branch, said he is applying for a waiver so he can continue his unpaid position as past president of the American Society of Human Genetics. Even if the agency allows it, he worries that organizations will shy away from NIH researchers.
 
 "But what I'm really worried about is backlash from the organizations," he said. "They'll think it will be too much trouble to get us. We will be cut off, disenfranchised from our academic colleagues."
 
 Several organizations, including the American Association of Immunologists  and the Federation of American Societies for Experimental Biology, have written to Health and Human Services Department officials expressing concern over the restrictions.
 
 AAI urged that the rules be immediately withdrawn and expressed concern about the agency's ability to attract and retain top scientists  --  a fear embodied in the recent departures of senior staffers such as National Cancer Institute pathologist Lance A. Liotta.
 
  Liotta, who is starting a research center at George Mason University, declined to comment. He was among those highlighted by congressional investigators for consulting deals. Vikas Chandhoke, George Mason's associate dean for research, would not address Liotta's reasons for leaving NIH but said, "I don't think it will be attractive for researchers to work in restrictive environments."
 
 Researchers at George Mason, like those at many other academic institutions, are encouraged to consult with private companies, he said. They can do so one day a week, with no cap on how much they can earn.
 
 Margaret L. Kripke, chief academic officer for the M.D. Anderson Cancer Center in Houston, an organization that frequently recruits at NIH, said researchers there can earn an additional 50 percent of their annual salaries from consulting agreements. "It puts our physicians on the front lines of new drugs being developed that we can make available to our patients," she said. "We strongly encourage them to consult."
 
 Kripke said: "It may not be quite as difficult to recruit at NIH as it has been in the past. The NIH is not a very happy place these days."
 
  
 
   

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