New Draft Guidance Addresses Process & Principles of Giving Gifts to FDA Commissioner

June 30, 2016

On Wednesday, June 29th the FDA issued a draft guidance, entitled “Gifts to the Food and Drug Administration: Evaluation and Acceptance: Draft Guidance for the Public and Food and Drug Administration Staff.”  Previously, the Secretary of the Department of Health and Human Services (HHS) has been able to accept both conditional and unconditional gifts on behalf of the US.  That authority has now been extended to the Commissioner of the FDA as well.  As such, FDA’s recent draft guidance addresses the processes and principles that the Agency will use in implementing this authority.

FDA’s Definition of a “Gift”

For purposes of this draft guidance, FDA defines the term “gift” to include “resources of monetary value given to FDA as an institution, including competitive grants awarded to FDA employees as part of their official duties, including: funds for either general or specific purposes, data, materials, items, information, or services.”  FDA draws attention to the fact that the term does not include “resources of monetary value to which a different authority or financial mechanism applies.”

FDA also provides a list of items that it does not considered to be gifts, and are therefore not covered by the scope of its draft guidance.  For additional details, view the full draft guidance.

Unconditional Gifts

The FDA also distinguishes between conditional and unconditional gifts, stating that “a gift will be considered unconditional if it is made to FDA for the carrying out of any of its functions, without further specification as to its purpose or manner of use. A gift will also be considered unconditional if it is limited to one or more of the general purposes of any part of FDA.”

Conditional Gifts

“A gift will be considered conditional if the donor restricts its purpose, or imposes conditions, to support a specific research study, project, or conference; to support activities of an FDA employee identified by organizational affiliation; to support specifically identified functions, such as observances, ceremonies, particular public information or health promotion campaigns, community outreach activities; or purchase of specific items or types of equipment, or other specific uses.”

The draft guidance applies to both conditional and unconditional gifts.

Framework & Balancing Test

In its draft guidance, FDA states that it will “consider gifts from all sources on a case-by-case basis,” using a framework and balancing test.  In order for the Agency to accept a gift, the benefits to the FDA’s mission and the public health must outweigh any risks and/or conflicts of interest.  “A balancing test demands development of the factual context and circumstances and allows application of all relevant legal and prudential factors.”  The Agency has the authority to require any potential donors to disclose (in writing) any relevant information, such as a list of the donor’s business affiliations and subsidiaries, and any matters expected to require the Agency’s attention.

The draft guidance provides a number of factors that must be considered in applying the balancing test, including but not limited to:

  1. “What is the nature and magnitude of the public health benefit expected from the gift?”
  2. “What is the nature and magnitude of any real or apparent conflict of interest?”
  3. Various characteristics of the donor (e.g., is the donor regulated by the FDA?).
  4. Various characteristics of the FDA recipient Center/Office (e.g., value of the gift a significant percentage of the budget of the office(s) that will use the gift?).

Rejecting Gifts

In the document FDA notes that anyone can offer a gift, but there are five main reasons that could cause the Agency to reject an offer without additional evaluation.  These include:

  1. “The donor imposes conditions that are illegal, are contrary to public policy, are unreasonable to administer, are contrary to FDA’s current policies and procedures, or are contrary to generally accepted public standards.”
  2. “The donor requires the Agency to provide the donor with some privilege, concession, or other real or apparent present or future benefit in return for the gift.”
  3. “A debarred entity offers the gift.”
  4. “A different authority or financial mechanism applies. If we decline resources covered by those other authorities or mechanisms, we should not then use our gift acceptance authority as an alternative means to accept the resources.”
  5. “The total costs associated with acceptance are expected to exceed the cost of purchasing a similar item and the cost of normal care and maintenance.”

The draft guidance states that “FDA should not accept a gift from regulated industry unless the gift addresses exceptional public health circumstances for which no other solution could be achieved in the time available.”  Only the Commissioner has the authority to identify such circumstances.  Additionally, the Agency states that it will not consider a gift from a person who has been debarred, “a relatively uncommon designation that prohibits a person from doing business with FDA or other agencies in the Federal Government.”  FDA notes that this will only disqualify the person during the duration of their debarment; after that period of time, any gift that they offer is subject to the Agency’s balancing test.

Additional Information

In its draft guidance, FDA also addresses a number of additional topics, such as:

  • Solicitation
  • Transparency
  • Non-endorsement
  • Opt-out provision
  • Delegation of Authority

For details on FDA’s recommendations regarding these topics, view the Agency’s full draft guidance.


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