NIH employees are subject to additional regulatory provisions (5 C.F.R. §§ 5501.109, 5501.110 and 5502.107) with respect to holding and reporting financial interests in and outside activities with substantially affected organizations (SAOs). Generally, an SAO is a biotechnology, pharmaceutical or medical device manufacturing company whose sales of such products or devices constitute ten percent or more of the company’s gross annual sales.
In past years, the General Electric Company (GE) was not considered to be an SAO because sales in its health care division, including medical devices, did not exceed the ten percent threshold. However, information available indicates that sales in this segment now exceeds the ten per cent threshold. Accordingly, the General Electric Company, effective immediately, is an SAO pursuant to the HHS’ supplemental regulations applicable to NIH employees. Because of GE’s new designation as an SAO, if you hold a financial interest in or have an outside activity with GE, action may be required on your part. Please call your IC ethics official to discuss your situation.
Financial interests in GE that may be affected include stocks, bonds, and other investments or ownership interests whether acquired through marriage, gift, inheritance, or purchase by an employee, his or her spouse or minor child, a broker or financial planner.; We note that financial interests in GE such as a pension or other employee benefit arising from employment with GE may not be affected by the supplemental regulations. Please raise this issue with your ethics official if you believe this exception applies to your situation. Last, a certificate of divestiture may be available to defer the payment of taxes on capital gains realized from the sale of GE stock if you are required to sell your GE holding and a capital gain results from the sale. Consult with your ethics official regarding this matter, too.
Distributed via electronic mail to the NIH ethics community, 5/9/2012.
Posted: 5/9/12
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