Watchdog Uncovers $350 Million in Secret Payments to Fauci and Others at NIH
Watchdog Uncovers $350 Million in Secret Payments to Fauci and Others at NIH
Nonprofit watchdog claims there is an "unholy conflict of interest inherent at NIH"
Yesterday a nonprofit watchdog revealed an estimated $350 million in undisclosed royalties were paid to the National Institutes of Health and hundreds of its scientists. This included the agency’s recently departed director, Dr. Francis Collins, and Dr. Anthony Fauci.
OpenTheBooks is an American nonprofit organization based in the Chicago suburb of Burr Ridge, Illinois. The organization operates as a government watchdog, using the freedom of information laws to obtain data on federal spending at all levels of government.
The organization filed a Freedom of Information Act suit requesting the data of all payments by outside sources to NIH and/or current and former NIH employees. The NIH denied their request and are now being sued for noncompliance with the FOIA by OpenTheBooks.
Their CEO and founder Adam Andrzejewski spoke to reporters yesterday revealing massive amounts of undisclosed payments they estimate were made to the NIH and its employees.
“We estimate that up to $350 million in royalties from third parties were paid to NIH scientists during the fiscal years between 2010 and 2020,” Open the Books CEO Adam Andrzejewski told reporters in a telephone news conference on May 9.
“We draw that conclusion because, in the first five years, there has been $134 million that we have been able to quantify of top-line numbers that flowed from third-party payers, meaning pharmaceutical companies or other payers, to NIH scientists.”
“We now know that there are 1,675 scientists that received payments during that period, at least one payment. In fiscal year 2014, for instance, $36 million was paid out and that is on average $21,100 per scientist,” Andrzejewski said.
“We also find that during this period, leadership at NIH was involved in receiving third-party payments. For instance, Francis Collins, the immediate past director of NIH, received 14 payments. Dr. Anthony Fauci received 23 payments and his deputy, Clifford Lane, received eight payments.”
When employees make discoveries in their field, the NIH receives and owns the rights to any resulting patent. The NIH then receives royalty payments from any commercially licensed products. This is all well-known already, the problem is the redaction of information revealing the true number of royalty payments.
“When an NIH employee makes a discovery in their official capacity, the NIH owns the rights to any resulting patent. These patents are then licensed for commercial use to companies that could use them to bring products to market,” the fact sheet reads.
“Employees are listed as inventors on the patents and receive a share of the royalties obtained through any licensing, or ‘technology transfer,’ of their inventions. Essentially, taxpayer money funding NIH research benefits researchers employed by NIH because they are listed as patent inventors and therefore receive royalty payments from licensees.”
Andrzejewski noted that the Associated Press reported on the NIH royalty payments in 2005, but a large amount of the data was heavily redacted by the NIH, now revealing the payments to be much larger with no names attached to the third-party payers.
“At that time, we knew there were 918 scientists, and each year, they were receiving approximately $9 million, on average with each scientist receiving $9,700. But today, the numbers are a lot larger with the United States still in a declared national health emergency. It’s quite obvious the stakes in health care are a lot larger,” Andrzejewski said.
He said the files Open the Books is receiving—300 pages of line-by-line data—are “heavily redacted.”
“These are not the files the AP received in 2005 where everything was disclosed—the scientist’s name, the name of the third-party payer, the amount of the royalty paid by the payer to the scientist,” Andrzejewski said. “Today, NIH is producing a heavily redacted database; we don’t know the payment amount to the scientist, and we don’t know the name of the third-party payer, all of that is being redacted.”
In Andrzejewski’s and his organization’s eyes this is all a huge conflict of interest.
“We believe there is an unholy conflict of interest inherent at NIH,” he said. “Consider the fact that each year, NIH doles out $32 billion in grants to approximately 56,000 grantees. Now we know that over an 11-year period, there is going to be approximately $350 million flowing the other way from third-party payers, many of which receive NIH grants, and those payments are flowing back to NIH scientists and leadership.”
Fauci and Lane told AP that they agreed there was an appearance of a conflict of interest in getting the royalties, with Fauci saying that he contributed his royalties to charity. Lane didn’t do that, according to Andrzejewski.
The governing ethics financial disclosure form in the past defined the royalty payments as income recipients received from NIH, which meant the recipients weren’t required to list their payments on the form.
But Andrzejewski said NIH has refused to respond to his request for clarification on the disclosure issue.
“If they are not, none of these payments are receiving any scrutiny whatsoever and to the extent that a company making payments to either leadership or scientists, while also receiving grants … then that just on its face is a conflict of interest,” he said.
Fauci and the NIH have been under heavy fire in recent months, and this is just adding more fuel to the fire. What do you think? Is this redaction of information a conflict of interest on the NIH’s part? More importantly, do you think government employees are truly working for you, or their own self interests?