Stealth Merger: Drug Companies and Government Medical Research

In 1938, the renamed National Institute of Health moved to its present, 300-acre headquarters in Bethesda, about nine miles north of the White House.

The agency's responsibilities -- and prominence -- have grown steadily.

In 1948, four institutes were created to support work on cardiac disease, infectious diseases, dental disorders and experimental biology. "Institute" in the agency's name became "Institutes."

President Nixon turned to the NIH in 1971 to lead a war on cancer. The agency has led the government's fight against AIDS. Two years ago, President Bush enlisted the NIH to help counter biological terrorism.

Republican and Democratic administrations have boosted spending for the 27 research centers and institutes that compose today's NIH. Since 1990, the annual budget has nearly quadrupled, to $27.9 billion this fiscal year.

Senior NIH scientists are among the highest-paid employees in the federal government.

With billions of dollars in product sales potentially at stake for industry, and untold fortunes riding on biomedical stock prices, commercial temptations abound:

Researchers poised to make a breakthrough in their NIH labs can, the same day, land paid consulting positions with companies eager to exploit their insights and cachet. Many companies cite their connections to NIH scientists on Web sites and in news releases, despite an agency rule against the practice. Selection of a company's products for an NIH study can provide a bankable endorsement -- attracting investors and boosting stock value. If the study yields positive results, the benefits can be even greater.

Conflicts of interest among university medical researchers have received wide attention in recent years. U.S. Rep. W.J. "Billy" Tauzin (R-La.) also raised questions recently about cash awards that several nonprofit institutions made to a previous director of the National Cancer Institute.

The consulting deals between drug companies and full-time, career employees at the NIH, however, have gone all but unnoticed.

The wide embrace of private consulting within the NIH can be traced in part to calls from Congress for quicker "translation" of basic federal research into improved treatments for patients.

And for decades industry has pressed for more access to the government's scientific discoveries.