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Thursday, February 03, 2005

Law/Econ. Dev. - Biotech Industry Sees Potential In Ethics Rules

"Biotech Industry Sees Potential In Ethics Rules" is the headline to a story today in the business section of the Washington Post. Some quotes:

Venture capitalists, entrepreneurs and state officials say strict new ethics rules governing National Institutes of Health researchers could prompt many of them to leave for private companies -- a potential boon for the region's biotech sector.

"I think this ban will encourage people to leave, those especially who have a lot of interaction with drug companies and are currently in a position to receive a lot of money" from private companies, said Bruce D. Weintraub, a former NIH researcher who left and co-founded Trophogen Inc. in Rockville.

The same theory found favor yesterday at the Maryland Department of Business and Economic Development, where officials anticipate the new rules -- so detailed they will force thousands of employees at NIH's Bethesda campus to sell stock they hold in the biotech industry -- will push some government researchers to start their own businesses. * * *

Word of the new restrictions began circulating several months ago following reports that hundreds of NIH researchers had entered into lucrative consulting arrangements with private businesses. Agency observers worried at the time that if the rules designed to cure that perceived conflict of interest were too strict, it could cause an agency brain drain.

Those worries intensified this week when the rules were announced. They include a strict ban on consulting work for biotech and drug companies, a prohibition on accepting fees for speaking at conferences, and a mandate that researchers divest their stock holdings in biotech companies. The latter requirement in particular produced several contentious moments yesterday at a meeting between senior NIH officials and researchers.

"These researchers are just not as well compensated as they should be," said John W. Holaday, a former government researcher who launched Rockville's EntreMed Inc. "This might drive creative scientists right out of the NIH. They'll . . . do this work on their own."

Posted by Marcia Oddi on February 3, 2005 01:26 PM
Posted to Biotech | General Law Related | Indiana economic development