Amgen Inc. v. F. Hoffmann-LaRoche LTD et al

Filing 1055

BRIEF by Amgen Inc. Bench Memorandum Regarding Publication Requirements for Section 102 Prior Art. (Attachments: #1 Attachment 1#2 Attachment 2#3 Attachment 3#4 Attachment 4#5 Attachment 5)(Gottfried, Michael)

Amgen Inc. v. F. Hoffmann-LaRoche LTD et al

Doc. 1055 Att. 4

Case 1:05-cv-12237-WGY

Document 1055-5

Filed 09/12/2007

Page 1 of 26

ATTACHMENT
4

Dockets.Justia.com

PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 1 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 2 of 26

4. PREAWARD POLICIES AND CONSIDERATIONS (PHS GPS 9505)
The preaward process begins when a PHS agency publishes a program announcement on the availability of financial assistance to carry out specified health-related activities. It continues with the preparation of the application by the entity requesting the funds, the external review of the application as applicable, and the internal PHS review. It culminates with the PHS awarding office decision on whether to award a grant. The following sections deal with policies and procedures pertinent to the preaward phase of the grants administration process.

PROGRAM ANNOUNCEMENTS
PHS agencies are required to publish the following types of documents in either the Federal Register or the NIH Guide for Grants and Contracts for discretionary grant programs, including fellowship and training awards made directly to individuals.
Program

regulations.

announcements containing the following information: Program title and Catalog of Federal Domestic Assistance (CFDA) number; program objectives, including any areas of special emphasis or interest; type of assistance--grant or cooperative agreement; description of expected PHS substantive programmatic involvement for cooperative agreements; citation of legislative authority and regulations; eligibility requirements; application deadlines and the place where applications may be submitted; consequences of late submission; requirements for review under Executive Order 12372; application format; recipient financial participation requirements; criteria for review and evaluation and program priorities for funding; the contact points for additional information; description of any program priorities for funding; and any preferences which may be given to either new or competing continuation applications.
Program A

statement regarding the availability of funds if not included in the program announcement.

other materials are available and are not included or referred to in the preceding items, a notice regarding the availability of these materials or other information the program wishes to make available to applicants.
If

Publication of this information enables potential applicants to determine whether to apply for funds, to understand how and by what criteria an application will be evaluated, and to know the obligations imposed on a recipient. All PHS awarding offices are responsible for making information regarding their programs available to the interested public on request and for promoting the widespread dissemination of this information. The Grants Management Officer (GMO) is responsible for providing assistance on business management matters and grant policy issues. Project Officers are responsible for providing assistance on the programmatic aspects of the project.

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 2 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 3 of 26

ELIGIBILITY
Authorizing legislation and governing programmatic regulations specify eligibility for individual grant programs. In general, assistance is provided to nonprofit organizations and institutions, governments and their agencies, and occasionally to individuals. For-profit organizations are eligible to receive awards under all PHS financial assistance programs unless specifically excluded by legislation. Nonprofit organizations are corporations or associations no part of whose net earnings may lawfully inure to the benefit of any private shareholder or individual. Proof of nonprofit status must be submitted by private nonprofit organizations with the application or, if previously filed with PHS, the applicant must state where and when the proof was submitted. Any of the following is acceptable evidence of nonprofit status. reference to the applicant organization's listing in the Internal Revenue Service's (IRS) most recent list of tax-exempt organizations described in section 501(c)(3) of the IRS Code.
A A

copy of a currently valid IRS tax exemption certificate.

statement from a State taxing body, State Attorney General, or other appropriate State official certifying that the applicant organization has a nonprofit status and that none of the net earnings accrue to any private shareholders or individuals.
A A

certified copy of the organization's certificate of incorporation or similar document that clearly establishes nonprofit status.

of the above proof for a State or national parent organization and a statement signed by the parent organization that the applicant organization is a local nonprofit affiliate.
Any

Trainees and Fellows
Trainees supported under a training grant and individuals supported under fellowships must meet the general eligibility requirements set by the particular program providing the support and any additional requirements established by the grantee institution. To be eligible for support at the postdoctoral level (see section 7, "Trainee Costs, Stipends"), an individual must have completed all requirements for the doctoral degree before the beginning date of PHS support. Where a degree has not been formally conferred, the degree-granting institution must certify that all of the degree requirements have been met. Under training grants, the grantee must retain documentation of this certification. Only U.S. citizens, noncitizen nationals, and those foreign nationals who possess a visa permitting permanent residence in the United States may be appointed as trainees on training grants or as individual fellows, (1) except in the case of programs specifically designed for support of foreign nationals. Individuals on temporary or student visas are not eligible to receive PHS fellowship or training grant support. Section 504 of Public Law 90-574 allows students to be eligible to receive funds awarded for traineeships and fellowships even though they are receiving educational assistance under the Veterans Readjustment Benefits Act ("G.I. Bill").

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 3 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 4 of 26

English-Language Requirement
All applications for financial assistance and required reports submitted to awarding components of the Public Health Service must be written in the English language.

PUBLIC POLICY REQUIREMENTS
Applicants and grantees must comply with a number of public policy requirements. These policies are intended to ensure fairness, equity, and physical and other protections in activities receiving PHS financial assistance. This section lists these principal policies and cites the applicable supporting statute, regulation, or other source documents. Where requirements are applicable to subgrantees and contractors, the individual section so states. In addition, this section explains the applicability of the particular policy to the types of programs supported by PHS. This listing is not exhaustive. Additional requirements and necessary documentation will be detailed in the application or other materials provided to applicants. Public policy provisions that are to be included in contracts under grants (or subgrants) are included in the procurement standards prescribed by 45 CFR Parts 74 and 92.

Civil Rights
Race/Ethnicity Title VI of the Civil Rights Act of 1964 provides that no person in the United States shall, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance, whether directly or under a subgrant or contract arrangement. The HHS regulation implementing this requirement is contained in 45 CFR Part 80. Every domestic applicant organization is required to have an Assurance of Compliance (Form HHS-690) on file with the Office for Civil Rights, Office of the Secretary, HHS, before a grant may be made to the organization. For applicant organizations that have not previously received HHS support, the proposed PHS awarding office will provide the assurance form to the applicant and will provide instructions on submitting the completed form. This requirement is also applicable to subgrantees. Disabilities Section 504 of the Rehabilitation Act of 1973, as amended, provides that no otherwise qualified handicapped individual in the United States shall, solely by reason of the handicap, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. This requirement also applies to subgrantees and contractors under grants. The HHS regulation at 45 CFR Part 84 implements this requirement. Subpart F of that regulation applies specifically to health programs and prohibits recipients of Federal financial assistance from discriminating on the basis of handicap in the provision of benefits or services. This regulation requires an assurance by the applicant (Form HHS-690) that HHS-funded activities will be available and accessible to handicapped persons, and that there will be no discrimination in employment based on an individual's handicap. The required assurance must be on file with the Office for Civil Rights, Office of the Secretary, HHS, before a grant may be made to an organization. When such an assurance has not been filed, the PHS awarding office from which support is being sought will provide the applicant with the required form and will provide instructions as to where to send the completed form.

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 4 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 5 of 26 Age The Age Discrimination Act of 1975 prohibits unreasonable discrimination on the basis of age in any program or activity receiving Federal financial assistance. This requirement is also applicable to subgrantees and contractors under grants. The required assurance (Form HHS-690) must be on file with the Office for Civil Rights, Office of the Secretary, HHS, before a grant may be made. The HHS regulation implementing the provisions of this Act is at 45 CFR Part 91. Sex All PHS grantees are encouraged to adopt practices that will eliminate sex discrimination and encourage sex fairness, including but not limited to using language that represents both genders, avoiding sex stereotyping, and representing women equitably in leadership and policymaking positions. Title IX of the Education Amendments of 1972 (in particular, section 901 of those amendments) provides that no person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any educational program or activity receiving Federal financial assistance, whether directly or under a subgrant or contract under a grant. The HHS regulation at 45 CFR Part 86 implements this requirement. The applicant (or proposed subgrantee or contractor) is required to submit an assurance (Form HHS-690) to the Office for Civil Rights, Office of the Secretary, HHS, before a grant, subgrant, or contract under a grant may be made. Section 704 of Title VII and Section 855 of Title VIII of the PHS Act, as amended, forbids the extension of Federal support for health manpower and nurse training programs authorized under those titles to any entity that discriminates on the basis of sex in the admission of individuals to its training programs. The regulation implementing this requirement is at 45 CFR Part 83. The applicant is required to submit an assurance (Form HHS-590 or 590B) to the Office for Civil Rights, Office of the Secretary, HHS, before a grant may be made. Alcohol and Other Drug Abuse Section 526 of the PHS Act, as amended, provides that drug abusers who are suffering from medical conditions shall not be discriminated against in admission or treatment because of their drug abuse or drug dependence by any private or public general hospital that receives support in any form from any federally funded program. This prohibition is extended to all outpatient facilities receiving or benefiting from Federal financial assistance by 45 CFR Part 84. This prohibition also applies to subgrantees and contractors under grants. Section 522 of the PHS Act, as amended, provides that alcohol abusers and alcoholics who are suffering from medical conditions shall not be discriminated against in admission or treatment, solely because of their alcohol abuse or alcoholism, by any private or public general hospital that receives support in any form from any federally funded program. This prohibition is extended to all outpatient facilities receiving or benefiting from Federal financial assistance by 45 CFR Part 84. This prohibition also applies to subgrantees and contractors under grants. Confidentiality Section 543 of the PHS Act, as amended, requires that records of substance abuse patients be kept confidential except under certain specified circumstances and for specified purposes. The records covered include the identity, diagnosis, prognosis, or treatment of any patient maintained in connection

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 5 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 6 of 26 with any program or activity relating to substance abuse education, prevention, training, treatment, rehabilitation, or research that is conducted, regulated, or directly or indirectly assisted by any department or agency of the United States. This requirement is implemented in PHS regulations at 42 CFR Part 2. Under section 301(d) of the PHS Act, as amended, health research subjects' identities may be protected from compulsory legal process such as subpoena (with certain exceptions, such as for audit of the research project). This protection may be granted, upon application, by the PHS in the form of a certificate of confidentiality for a specific research project. The protection is issued under PHS regulations at 42 CFR Part 2a and an Interim Policy Statement issued by the Assistant Secretary for Health.

Environmental Impact
The National Environmental Policy Act of 1969 (NEPA) (Public Law 91-190) establishes national policy goals and procedures to protect and enhance the environment. This act applies to all Federal agencies and requires them to consider the probable environmental consequences of any major Federal activity, including activities of other organizations operating with the concurrence or support of a Federal agency. This includes grant-supported activities. To administer the provisions of NEPA, PHS requires that the environmental aspects of all requests for assistance involving construction, (2) including projects involving the acquisition and/or modernization of existing buildings, and certain requests for assistance involving nonconstruction projects be reviewed and evaluated by the technical staff of the PHS reviewing office prior to approval or other action on the application. For nonconstruction project grants, PHS agency heads must determine what categories of activities or programs may have little environmental impact and should be excluded from NEPA requirements. Actions that qualify for categorical exclusions, i.e., are "screened out," will be published in the Federal Register. In addition, HHS policy includes public comment and participation as a part of the environmental impact review process. Potential applicants for construction projects and nonexcluded activities under programs subject to Executive Order 12372 (see "External Review Requirements") are required to include in their notifications to the State Single Point of Contact a request for comments on the potential environmental impact of the project and to submit these comments with the completed application. Except as provided below, all applications for construction assistance, including assistance to acquire or modernize existing buildings, shall be accompanied by the applicant's own separately bound environmental analysis to facilitate PHS review and evaluation prior to approval or other action on the application. An environmental analysis means a written review that lists the environmental effects that are expected to occur as a result of the proposed action, defines the current and future implications of these effects, and lists any proposed actions or safeguards to avoid or reduce any negative environmental effects. For those programs or activities that have been screened out from routine NEPA processing, no environmental analysis is necessary, except in those unusual situations where a significant environmental consequence is anticipated by either the applicant or an official of the PHS awarding office. In such a case, an environmental analysis shall be provided with the application.

Flood Insurance

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 6 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 7 of 26 The Flood Disaster Protection Act of 1973 (Public Law 93-234) provides that no Federal financial assistance to acquire, modernize, or construct property may be provided in identified flood-prone communities in the United States unless the community participates in the National Flood Insurance Program and flood insurance is purchased within 1 year of such identification. The flood insurance purchase requirement is applicable to both public and private applicants for PHS support. Listings of flood-prone areas that are eligible for flood insurance are published in the Federal Register by the Federal Emergency Management Agency (FEMA).

Historic Properties
Under the provisions of Section 106 of the National Historic Preservation Act of 1966, the Secretary of the Interior has compiled a national register of sites and buildings of significant importance to America's history. (3) The applicant and the PHS awarding office must jointly determine whether activities using PHS financial assistance will affect a property listed in the national register. Although this requirement applies to all construction, acquisition, and modernization activities, it may also apply to other PHS grant-supported activities. This must be a preaward determination. If a designated historic property is to be affected, the applicant must obtain clearance from the appropriate State Historic Preservation Office before submitting the application.

Relocation Assistance and Real Property Acquisition
The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (Public Law 91646) requires certain assurances for those PHS financial assistance projects conducted by a State agency that involve the acquisition and/or modernization of real property or cause the displacement of persons, businesses, or farm operations. The HHS regulation implementing those provisions is at 45 CFR Part 15. The term "State agency" means any department, agency, or instrumentality of a State. For the purposes of 45 CFR Part 15, this includes the State itself, a political subdivision of a State, State or local institutions of higher education or hospitals, and any department, agency, or instrumentality of two or more States. This term also includes a private entity when such an entity receives PHS funds to act as an agent or contractor of a State agency in the discharge of the State agency's responsibilities. Indian tribes and tribal organizations are also subject to these requirements. The applicant must ensure that fair and reasonable relocation payments and advisory services will be provided to displaced persons and that safe, decent, and sanitary replacement dwellings will be available to such persons within a reasonable period of time prior to displacement. The State agency must be guided by the real property acquisition policies of the Act, and the property owners must be paid or reimbursed for necessary expenses as specified by the Act. These assurances must be contained in or accompany all applications that are subject to this policy. Additional details regarding this requirement are contained in 45 CFR Part 15.

Elimination of Architectural Barriers to the Handicapped in Construction Supported by Grant Funds
All grants for construction of new facilities (4) must include provisions for making the facilities accessible to and usable by the physically handicapped. Where assistance is provided for alteration or renovation (including modernization and expansion) of existing facilities, the altered facility (or part of

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 7 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 8 of 26 the facility) must include such provisions to the maximum extent feasible. Minimum standards for facilities used by the handicapped are contained in "Specifications for Making Buildings and Facilities Accessible to and Usable by the Physically Handicapped" (American National Standards Institute, Inc. A.117.1, 1961; reaffirmed 1971) (5). These minimum standards must be included in the specifications for any PHS-funded new construction unless the grantee proposes to substitute standards that meet or exceed these standards. These standards must also be included to the maximum extent feasible in the specifications of any PHSfunded renovation. Applicants for such assistance must ensure that the facility will comply with these standard specifications (see discussion of 45 CFR Part 84 in "Civil Rights, Disabilities"). The applicant will be responsible for conducting inspections to ensure compliance with these specifications by any contractor performing construction services under the grant. The only exception to this requirement is in those programs where the governing legislation may proscribe the inclusion of special provisions for the handicapped.

Human Subjects
Section 474(a) of the PHS Act, implemented by 45 CFR Part 46, requires basic protection for human subjects involved in PHS grant-supported research activities. A human subject is defined in the regulation as "a living individual about whom an investigator (whether professional or student) conducting research obtains data through intervention or interaction with the individual or identifiable private information." The regulation extends to the use of human organs, tissues, and body fluids from individually identifiable human subjects as well as to graphic, written, or recorded information derived from individually identifiable human subjects. The regulation also specifies additional protections for certain classes of human research involving fetuses, pregnant women, human in vitro fertilization, and prisoners. However, the regulation exempts certain categories of research involving human subjects which normally involve little or no risk. The exemptions are listed in 45 CFR Part 46.101(b). Research is defined in 45 CFR Part 46 as "systematic investigation designed to develop or contribute to generalizable knowledge." Activities meeting this definition constitute research for purposes of applying the regulation even if they are supported by a grant which might have as its overall purpose an activity that is not primarily research. For example, some demonstration, training, and service programs may include research activities. Research activities may involve interaction with the individual or intervention or may entail only the obtaining of identifiable private information. "Interaction" includes both physical procedures by which data are gathered or generated and manipulations of the subject or the subject's environment that are performed for research purposes. "Private information" is covered by the regulations when the information is individually identifiable and the information is either about the individual's behavior in a context in which there is reasonable expectation that no observation or recording is taking place or is information provided for specific purposes with the reasonable expectation that it will not be made public (e.g., a medical record). Research covered by 45 CFR Part 46 will not be funded unless it has been reviewed and approved by an institutional review board (IRB). In order to approve research covered by the regulation, the IRB shall determine that all of the following requirements are satisfied.
Risks

to subjects are minimized by --

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 8 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 9 of 26 procedures that are consistent with sound research design and do not unnecessarily expose subjects to risk.

Using

appropriate, using procedures already being performed on the subjects for diagnostic or treatment purposes.
Whenever

to subjects are reasonable in relation to expected benefits, if any, to subjects and the importance of the knowledge that may reasonably be expected to result.
Risks Selection

of subjects is equitable. In making this assessment, the IRB should take into account the purposes of the research and the setting in which the research will be conducted.

consent is sought from each prospective subject or the subject's legally authorized representative in accordance with and to the extent required by the regulation.
Informed

consent is appropriately documented in accordance with and to the extent required by the regulation.
Informed Where

appropriate, the research plan makes adequate provision for monitoring the data collected to ensure the safety of subjects. appropriate, provisions are adequate to protect the privacy of subjects and to maintain the confidentiality of data.

Where

some or all of the subjects are likely to be vulnerable to coercion or undue influence, such as persons with acute or severe physical or mental illness or persons who are economically or educationally disadvantaged, appropriate additional safeguards are included in the study to protect the rights and welfare of these subjects.
Where

The institution which receives or is accountable for a PHS grant has primary responsibility for safeguarding the rights and welfare of individual human subjects involved in research activities supported by the grant. In regard to project grant awards, institutions applying for PHS awards for nonexempt human subject research are required to provide written Assurances of Compliance with 45 CFR Part 46 and to file with the application a certification (Form HHS 596) that the proposed research activity has been reviewed and approved by an IRB in compliance with 45 CFR Part 46. Certain types of applications for project grant awards, such as institutional type grants, research training grants, or projects that require completion of prior scientific studies, are submitted with the knowledge that human subjects may be involved within the period of funding, but definite plans are not set forth in the application. Before human subjects may be involved in nonexempt research activities supported by these awards, the research activity must be reviewed and approved by an IRB and a certification (Form HHS 596) submitted to PHS. With regard to block grant awards, no human subjects may be involved in nonexempt research activities supported by block grants unless the research activity has been reviewed and approved by an IRB established in compliance with 45 CFR Part 46. No individual may receive PHS grant funds for nonexempt human subjects research unless the individual is affiliated with or sponsored by an institution that assumes responsibility for the research under a written Assurance of Compliance or the individual makes other arrangements with PHS. Before award, PHS staff (or other application reviewers) are responsible for determining independently whether human subjects are involved, whether the research is exempt, and whether protections for the subjects are adequate. The Office for Protection From Research Risks, National Institutes of Health,

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 9 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 10 of 26 Bethesda, MD 20892, is responsible for the implementation of, and compliance with, 45 CFR Part 46 for HHS. Information concerning the preparation and negotiation of assurances as well as copies of the regulation may be obtained from that office.

Sterilization
HHS and PHS have established certain limitations on the performance of nonemergency sterilizations by PHS grant-supported programs or projects that are otherwise authorized to perform such sterilizations. PHS has issued regulations that establish safeguards to ensure that such sterilizations are performed on the basis of informed consent and that the solicitation of consent is not based on the withholding of benefits. These regulations, published at 42 CFR Part 50, Subpart B, apply to the performance of nonemergency sterilizations on persons legally capable of consenting to the sterilization. Federal financial participation is not available for any sterilization procedure performed on an individual who is under the age of 21, legally incapable of consenting to the sterilization, declared mentally incompetent, or institutionalized. The requirements in this section also apply to subgrantees and contractors under grants.

Abortions and Related Medical Services
Federal financial participation is generally not available for the performance of an abortion in a grantsupported health services project. This limitation also applies to subgrantees and contractors under grants. For further information on this subject, consult the regulation at 42 CFR Part 50, Subpart C.

Recombinant DNA and Institutional Biosafety Committees
Each institution where research involving recombinant DNA technology is being or will be conducted must establish a standing Biosafety Committee. Requirements for the composition of such a committee are given in Section IV of Guidelines for Research Involving Recombinant DNA Molecules (49 FR 46266 or latest revision), (6) which also discusses the roles and responsibilities of principal investigators and grantee institutions. A roster of the members of the Institutional Biosafety Committee must be submitted to the Office of Recombinant DNA Activities (see address below). At a minimum, this should include the names, addresses, occupations, and qualifications of the chairpersons and members of the committee. The committee is required to review each proposed nonexempt project for recombinant DNA experiments and certify that it has found the procedures, project, personnel, and facilities adequate and in compliance with NIH Guidelines. Guidelines for Research Involving Recombinant DNA Molecules should be consulted for complete requirements for the conduct of projects involving recombinant DNA technology. This requirement is also applicable to subgrantees and contractors under grants.

Animal Welfare
The PHS Policy on Humane Care and Use of Laboratory Animals by Awardee Institutions requires that applicant organizations establish and maintain appropriate policies and procedures to ensure the humane care and use of live vertebrate animals involved in research activities supported by PHS. This policy implements and supplements the U.S. Government Principles for the Utilization and Care of Vertebrate Animals Used in Testing, Research, and Training and requires that institutions use the Guide for the Care and Use of Laboratory Animals as a basis for developing and implementing an institutional animal

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 10 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 11 of 26 care and use program. This policy does not affect applicable State or local laws or regulations that impose more stringent standards for the care and use of laboratory animals. All institutions are required to comply, as applicable, with the Animal Welfare Act as amended (7 USC 2131 et sec.) and other Federal statutes and regulations relating to animals. These documents are available from the Office for Protection from Research Risks (OPRR), National Institutes of Health, Bethesda, MD 20892, 301-4967005. The policy stipulates that an applicant organization, whether domestic or foreign, bears responsibility for the humane care and use of animals in PHS-supported research activities. The PHS policy defines "animal" as "any live, vertebrate animal used or intended for use in research, research training, experimentation, or biological testing or for related purposes." An applicant organization proposing to use vertebrate animals in PHS-supported activities must file an Animal Welfare Assurance with OPRR. As part of this assurance, which commits the applicant organization to comply with the PHS policy, the applicant organization must appoint an institutional animal care and use committee (IACUC), which is required to review and approve those sections of applications for PHS support that involve vertebrate animals. As an agent of the institution with respect to PHS-supported activities, the IACUC shall -at least once every 6 months the institution's program for humane care and use of animals using the Guide as a basis for evaluation.
Review

at least once every 6 months all of the institution's animal facilities (including satellite facilities) using the Guide as a basis for evaluation.
Inspect

reports of the IACUC evaluations conducted as required by the Public Health Service Policy on Humane Care and Use of Laboratory Animals (hereinafter referred to as "the Policy") and submit the reports to the Institutional Official. The reports shall be updated at least once every 6 months upon completion of the required semiannual evaluations and shall be maintained by the institution and made available to OPRR upon request. The reports must contain a description of the nature and extent of the institution's adherence to the Guide and the Policy and must identify specifically any departures from the provisions of the Guide and the Policy, stating the reasons for each departure. The reports must distinguish significant deficiencies from minor deficiencies. A significant deficiency is one which, consistent with the Policy and in the judgment of the IACUC and the Institutional Official, is or may be a threat to the health or safety of the animals. If program or facility deficiencies are noted, the reports must contain a reasonable and specific plan and schedule for correcting each deficiency. If some or all of the institution's facilities are accredited by the American Association for the Accreditation of Laboratory Animal Care (AAALAC) or another accrediting body recognized by PHS, the report should identify those facilities as such.
Prepare Review

concerns involving the care and use of animals at the institution.

recommendations to the Institutional Official regarding any aspect of the institution's animal program, facilities, or personnel training.
Make

and approve, require modifications in (to secure approval), or withhold approval of those components of PHS-supported activities related to the care and use of animals as specified in the Policy.
Review Review

and approve, require modifications in (to secure approval), or withhold approval of

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 11 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 12 of 26 proposed significant changes regarding the use of animals in ongoing activities. authorized to suspend an activity involving animals in accordance with the specifications set forth in the Policy.
Be

No PHS award for research involving vertebrate animals will be made to an applicant organization unless that organization is operating in accordance with an approved Animal Welfare Assurance and provides verification that the IACUC has reviewed and approved the proposed activity in accordance with the PHS policy. Applications may be referred by PHS to the IACUC for further review in the case of apparent or potential violations of PHS policy. Copies of the approved Animal Welfare Assurance are available to every researcher at the applicant organization. No award to an individual will be made unless that individual is affiliated with an organization that accepts responsibility for compliance with PHS policy and has filed the necessary assurance with OPRR. Foreign applicant organizations applying for PHS awards for activities involving vertebrate animals are required to comply with PHS policy or provide evidence that acceptable standards for the humane care and use of animals will be met. Reporting Requirements At least once every 12 months, the IACUC, through the Institutional Officer, shall report in writing to OPRR -change in the institution's program or facilities that would place the institution in a different category than that specified in its assurance.
Any Any

change in the description of the institution's program for animal care and use. changes in the IACUC membership.

Any

dates that the IACUC conducted its semiannual evaluations of the institution's program and facilities and submitted the evaluations to the Institutional Official.
The

At least every 12 months, the IACUC, at an institution which has no changes to report, shall submit a letter, through the Institutional Official, to OPRR stating that there are no changes and informing OPRR of the dates of the required IACUC evaluations and submissions to the Institutional Official. The IACUC, through the Institutional Official, shall promptly provide OPRR with a full explanation of the circumstances and actions taken with respect to.
Any

serious or continuing noncompliance with the Policy. serious deviation from the provisions of the Guide. suspension of an activity by the IACUC.

Any

Any

Reports filed as required by the Policy shall include any minority views filed by members of the IACUC.

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 12 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 13 of 26 Investigator's Responsibility Research investigators are entrusted with an essential role in assuring the humane care and use of animals. In activities they conduct or which are conducted under their direction, they have a direct and continuing responsibility to see that animals are adequately cared for and used. Investigators must comply with the PHS Policy, with the applicant organization's Animal Welfare Assurance, and with the requirements and determinations of the IACUC concerning the conduct of the research. Investigators must ensure that discomfort, distress, pain, and injury to the animals are avoided or minimized, consistent with a sound research design; that no more animals are used than are necessary to reach sound scientific conclusions; and that, when appropriate, animals are painlessly sacrificed in accordance with methods of euthanasia approved by the Panel on Euthanasia of the American Veterinary Medical Association.

Student Unrest Provisions
No funds appropriated under the HHS Appropriations Act shall be used to provide a loan, loan guarantee, grant, salary, or any remuneration whatever to any individual applying for admission, attending, employed by, teaching at, or doing research at an institution of higher education who has engaged in conduct on or after August 1, 1969, that involves the use of (or the assistance to others in the use of) force, the threat of force, or the seizure of property under the control of an institution of higher education to require or prevent the availability of a certain curriculum or to prevent the faculty, administrative officials, or students in such institution from engaging in their duties or pursuing their studies at such institution. This prohibition stems from language in HHS's annual appropriations act. The primary responsibility for observing and complying with the terms of this provision rests with the institutions of higher education receiving PHS awards or, where payments are made directly, with the individuals receiving such payments. Fair notice shall be given to an affected individual of any proposed cessation of payment, and an opportunity for a hearing shall be provided.

Misconduct in Science
It is the policy of PHS to require high ethical standards in all grant-supported projects and to inquire into and, if necessary, investigate and resolve promptly and fairly all instances of alleged or apparent misconduct in science. Recipient institutions shall report promptly to the head of the appropriate PHS awarding component incidents of alleged or apparent misconduct in science that are judged to warrant investigation by a recipient institution. Issues involving potential criminal violations, such as misappropriation of Federal funds, must be promptly reported to the HHS Office of the Inspector General. (See regulations contained in 42 CFR Part 50, Subpart A.)

Requirements for Drug-Free Workplace
The Drug-Free Workplace Act of 1988 (Public Law 100-690, Title V, Subtitle D) requires that, effective March 18, 1989, all grantees of any Federal agency certify to that agency that they will maintain a drugfree workplace or, in the case of grantees who are individuals, certify to the agency that their conduct of grant activity will be drug free. HHS regulations implementing this Act, set forth in 45 CFR Part 76 entitled Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants), were published in the Federal Register on January 13, 1989. These regulations require that grantees take steps to provide a drug-free workplace in accordance with the Act.

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 13 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 14 of 26 Grant application forms have been revised to include a specific assurance from applicants that a drugfree workplace will be provided. The main points of the certification require the applicant organization to -a statement notifying employees that the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited in the workplace and specifying the actions that will be taken against employees for violation of such prohibition.
Publish Establish

a drug-free awareness program.

that each employee engaged in the performance of a grant or contract be provided a copy of the published statement.
Require

employees that as a condition of employment, they will abide by the terms of the statement.
Notify Notify

the PHS awarding office of any employee convicted of a drug violation occurring in the workplace.

any employee who is convicted of a drug offense occurring in the workplace to participate in a rehabilitation program.
Require

Debarment and Suspension
Executive Order 12549, Debarment and Suspension, of February 18, 1986, called for development of a governmentwide debarment and suspension system for nonprocurement transactions with Federal agencies. "Nonprocurement transactions" include, for example, grants, cooperative agreements, scholarships, fellowships, and loans. Accordingly, applicants (defined as primary participants) submitting applications for financial assistance from PHS are required to certify that, to the best of their knowledge and belief, neither they, their principals, nor their research personnel.
Are

presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any Federal department or agency. within a 3-year period preceding this application, been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statute; or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property.

Have,

presently indicted or otherwise criminally or civilly charged by a governmental entity (Federal, State, or local) with commission of any of the offenses enumerated above.
Are

within a 3-year period preceding this application, had one or more public transactions (Federal, State, or local) terminated for cause or default.
Have,

Subawardees, that is, other corporations, partnerships, or other legal entities (defined as lower tier participants), are required to make the same certifications to the applicant organization concerning their covered transactions.

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 14 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 15 of 26 Application forms have been revised to include a specific item concerning this assurance.

Debt Collection
The Federal Claims Collection Standards (4 CFR Parts 101-105) require that, except where prohibited by law, PHS charge interest on all delinquent debts owed to PHS by grantees. Unless otherwise specified in law, regulation, or award instrument, debts are considered delinquent 30 days after notification to the grantee of the indebtedness. The interest on debts that become delinquent will be computed from the date of the original notification to the grantee of the indebtedness. The rate will be at the higher of the Current Value of Funds Rate or the private consumer rate of interest fixed by the Department of the Treasury. Penalties and administrative costs of collection shall also be charged to grantees other than State and local governments in accordance with the Debt Collection Act of 1982. The Act has been implemented through the HHS Claims Collection Regulations (45 CFR Part 30, Subpart B) as follows:
A

penalty charge of 6 percent a year will be assessed on debts that are more than 90 days overdue. Penalty charges will accrue from the date the debt became overdue until the overdue amount is paid.

debtors will be assessed charges to cover the Government's administrative costs of collecting overdue debts. From time to time, PHS will publish a notice in the Federal Register setting forth the amounts to be assessed for administrative collection costs.
Delinquent

Should a grantee appeal a monetary adverse determination under 42 CFR Part 50, Subpart D, and/or 45 CFR Part 16, collection will be suspended pending a final decision on the appeal. If the determination is sustained (either fully or partially), interest will be charged beginning with the date of the original notification to the grantee of the indebtedness.

Certification of Nondelinquency on Federal Debt
Office of Management and Budget (OMB) Memorandum M-87-32, Certification of Nondelinquency by Applicants for Federal Assistance, requires that before a grant can be awarded, the applicant organization must certify that it is not delinquent on the repayment of any Federal debt. The certification applies to the applicant organization, not to the person signing the application as the authorized representative nor to the principal investigator/program director. Where the applicant discloses delinquency on debt to the Federal Government, the PHS shall (a) take such information into account when determining whether the prospective grantee organization is responsible with respect to that grant and (b) consider not making the grant until payment is made or satisfactory arrangements are made with the agency to which the debt is owed. Therefore, it may be necessary for PHS to contact the applicant before a grant can be made to confirm the status of the debt and ascertain the payment arrangements for its liquidation. Applicants who fail to liquidate indebtedness to the Federal Government in a businesslike manner place themselves at risk of not receiving financial assistance from PHS.

Lobbying
Section 319 of Public Law 101-121 amends Title 31, United States Code, by adding a new Section 1352, entitled "Limitation on use of appropriated funds to influence certain Federal contracting and financial transactions."

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 15 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 16 of 26 Section 1352 generally prohibits recipients of Federal grants and cooperative agreements from using Federal (appropriated) funds for lobbying the Executive or Legislative Branches of the Federal Government in connection with a specific grant or cooperative agreement. Section 1352 also requires that each person who requests or receives a Federal grant or cooperative agreement must disclose lobbying undertaken with non-Federal (nonappropriated) funds. These requirements apply to grants and cooperative agreements exceeding $100,000. (See interim final rule contained in 45 CFR Part 93.)

Program Fraud Civil Remedies Act
The Program Fraud Civil Remedies Act of 1986, Public Law 99-509, provides for the imposition of civil penalties against persons who make false, fictitious, or fraudulent claims to the Federal Government for money (including money representing grants, loans, or other benefits). A civil penalty of not more than $5,000 may be assessed for each such claim. Also, if the Government has made any payment on such false or fraudulent claim, an assessment of not more than twice the amount of such claim may be made in lieu of damages. Regulations contained in 45 CFR Part 79 specify the administrative procedures for imposing civil penalties and assessments and the hearing and appeal rights of persons subject to allegations of liability for such penalties and assessments.

False Claims Act
The False Claims Act, as amended, 18 U.S.C. 287 and 100l, provides that whoever makes or presents any false, fictitious, or fraudulent statements or representations or claims against the United States shall be subject to imprisonment of not more than 5 years and shall be subject to a fine in the amount provided by 18 U.S.C. 287.

PHS Metric Program
Public Law 94-168, Metric Conversion Act of 1975 (Title 15, U.S.C., Sections 205a through 205k), states that the policy of the United States shall be to coordinate and plan the increasing use of the metric system in the United States. Public Law 100-418, Omnibus Trade and Competitiveness Act of 1988, Section 5164 (Title 15, U.S.C., Sections 205a through 205k) amended the Metric Conversion Act of 1975 to provide that. metric system of measurement is the preferred system of weights and measures for U.S. trade and commerce.
The

Federal agency shall, by a date certain and to the extent economically feasible by the end of FY 1992, use the metric system of measurement in its procurements, grants, and other businessrelated activities (unless metric usage is impractical or would have an adverse impact on the market share of U.S. firms).
Each

shall seek ways to increase understanding of the metric system of measurement through educational information and guidance and in Government publications.
Agencies

Consistent with governmentwide implementing regulations issued at 15 CFR Part 19, Subpart B, and/or any other governmentwide requirements, it is PHS policy to support Federal transition to the metric system and to use the metric system of measurement in all grants, cooperative agreements, and other financial assistance awards.

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 16 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 17 of 26 Effective October 1, 1991, applications for grants, cooperative agreements, and other financial assistance submitted to PHS awarding offices are required to use metric units. Likewise, measurement values in reports, publications, and other communications regarding grants will be in metric units.

Pro-Children Act of 1994
Public Law 103 227, Part C - Environmental Tobacco Smoke, also known as the Pro Children Act of 1994, imposes restrictions on smoking where Federally funded children's services are provided. With respect to PHS funded activities, it specifically requires that, for all awards made on or after December 26, 1994, smoking should be prohibited in any indoor facility owned, leased, or contracted for and used for the routine or regular provision of kindergarten, elementary, or secondary education or library services to children under the age of 18. In addition, smoking should be prohibited in any indoor facility or portion of a facility owned, leased, or contracted for and used for the routine or regular provision of health care, day care, or early childhood development (Head Start) services to children under the age of 18. The law also applies to children's services that are provided in indoor facilities that are constructed, operated, or maintained with such Federal funds. These requirements are applicable if the services are funded by PHS either directly or through State or local government, by grant, contract, loan, or loan guarantee. The law does not apply to children's services provided in private residences, facilities funded solely by Medicare or Medicaid funds, and portions of facilities used for inpatient drug or alcohol treatment and facilities where WIC coupons are redeemed. Failure to comply with the provisions of the law may result in the imposition of a civil monetary penalty of up to $1000 per violation and/or the imposition of an administrative compliance order on the responsible entity. Applicants covered by the provisions of this Act are required to certify in the application that they will comply with the requirements of the Act. Grantees must obtain the same certification from subrecipients.

PHS Policy on Smoke-Free Workplace
PHS strongly encourages all recipients of its grants to provide smoke-free workplaces and promote the nonuse of tobacco products. Doing so is consistent with both the mission of PHS and that of its partners, the PHS grantees, to protect and advance the physical and mental health of the American people. PHS defines the term "workplace" to mean office space (including private offices and other work space), conference or meeting rooms, corridors, stairways, lobbies, rest rooms, cafeterias, and other public space.

Veterans Health Care Act of 1992
Section 602 of the Veterans Health Care Act of 1992 (Public Law 102-585) established section 340B of the Public Health Service Act, Limitation on Prices of Drugs Purchased by Covered Entities. Section 340B provides that, effective December 1, 1992, certain health services delivery grantees of PHS, as specified therein (referred to as covered entities), shall receive drug discounts from drug manufacturers for outpatient drugs (as defined in section 1927(k) of the Social Security Act). Information on the drug discount program (e.g., covered entities, covered drugs, and discount amount) may be obtained from the Office of Drug Pricing Program, Bureau of Primary Health Care, Health Resources and Services Administration, 4350 East-West Highway, 10th floor, Bethesda, MD 20814 or the awarding office funding the program. Certain covered entities must be certified by the Secretary of HHS before they become eligible for the drug discount prices. The entities requiring certification are those that (a) receive grant funds related to

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 17 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 18 of 26 the treatment of sexually transmitted diseases, (b) receive grant funds for the treatment of tuberculosis, or (c) receive certain assistance under Title XXVI of the PHS Act. Additional information about this certification may be obtained from the applicable PHS program directors. Section 340B contains prohibitions relating to drug diversion which might require covered entities to develop alternative drug management systems. HHS has identified three potential problem areas concerning drug diversion: (a) nonpatients of the covered entity (e.g., individuals, other than patients of the entity, who obtain covered outpatient drugs from the pharmaceutical dispensing facility), (b) ineligible entities within the same facility (e.g., a large hospital or health department containing many clinics only several of which are covered entities), and (c) excluded services of the covered entity (e.g., inpatient services). Covered entities that wish to participate in the drug pricing program are required to utilize separate drug purchasing and dispensing systems for covered services or alternative tracking systems that have been approved by HHS. These systems will be necessary to avoid potential drug diversion problems and provide adequate documentation for audit purposes. An additional aspect of this legislation that affects grantees is the Omnibus Budget Reconciliation Act of 1990. This Act requires drug manufacturers to provide rebates to State Medicaid agencies for outpatient drugs dispensed under the Medicaid program. The Veterans Health Care Act also requires drug manufacturers to provide discounts to the covered entities. This results in the potential for double price reductions. PHS, in cooperation with the Health Care Financing Administration, HHS, has developed a mechanism to prevent double price reductions. To the extent that covered entities do not bill Medicaid or utilize allinclusive rates (per encounter or visit), duplicate discounts and rebates will not occur. For other entities billing on a cost basis for drug purchases, PHS gives a list of their Medicaid provider numbers to State Medicaid agencies. Therefore, those entities utilizing cost-based billing systems who wish to participate in the program must provide their Medicaid provider numbers to the Office of Drug Pricing Program, Bureau of Primary Health Care, Health Resources and Services Administration, for forwarding to the State Medicaid agencies. Subject to the procedures established by PHS, a drug manufacturer will be permitted to audit the records of covered entities regarding possible duplicate discounts and the resale of drugs to persons who are not patients of the entity. If the covered entity is found in violation (after notice and hearing) of either the resale or transfer of drugs or the duplicate discount/rebate, it may result in sanctions such as being eliminated from participation in the drug discount program.

USES OF APPLICANT INFORMATION
Following are policies that organizations should be aware of when they apply for Federal financial assistance. These policies are of a general nature, and their applicability extends beyond the preaward stage. Applicability is specified in each section, as necessary, to distinguish between types of awards and types of grants.

Release of Information
The Freedom of Information Act The Freedom of Information Act (FOIA) (Public Law 90-23) as amended and associated public

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 18 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 19 of 26 information regulations of HHS (45 CFR Part 5) require the release by PHS of certain grant documents and records requested by members of the public. These policies and regulations apply to information in the possession of PHS and do not require recipients or contractors under grants to permit public access to their records. The following types of material will generally be released:
Funded

applications and disapproved noncompeting continuation applications

Approved

Notices

of Grant Award Status Reports

Financial

Final reports of any audit, survey, review, or evaluation of grantee performance that have been transmitted to the grantee organization

The organization that submitted the application will be notified of a Freedom of Information request through the project director or principal investigator by the appropriate PHS FOIA office and will be given an opportunity to identify potentially patentable or commercially valuable information that should not be disclosed if PHS has substantial reason to believe that information in the records could reasonably be considered exempt under Exemption 4. After PHS consideration of the grantee's submission, the grantee will be informed of the agency's decision as to what documents and to whom the documents will be released. The following types of records or information will generally be withheld in response to an FOIA request.
Pending

grant applications new and competing continuations and competing supplemental applications

Unfunded

Financial

information regarding a person, such as salary information pertaining to project

personnel pertaining to an individual, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy
Information

in interagency or intraagency memoranda or letters expressed by Government officers, employees, or consultants
Opinions

secrets and commercial, financial, and otherwise intrinsically valuable information that are obtained from a person or organization and are privileged or confidential; information, the release of which would adversely affect the competitive position of the person or organization, and patent or other valuable commercial rights of the person or organization
Trade

If a document contains both disclosable and nondisclosable information, the nondisclosable information will be deleted by a designated PHS or HHS FOIA Officer, and the balance of the record will be disclosed.

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PHS Grants Policy Statement: 4. PREAWARD POLICIES AND CONSIDERATIONS Page 19 of 25 Case 1:05-cv-12237-WGY Document 1055-5 Filed 09/12/2007 Page 20 of 26 The Privacy Act The Privacy Act of 1974 (Public Law 93-579) provides certain safeguards for individuals against invasions of personal privacy. These safeguards include the right of individuals to determine what information about them is maintained in Federal agencies' files and how that information is used and the right of individuals to have access to such records and to correct, amend, or request deletion of information in their records that is inaccurate, irrelevant, or outdated. The Act also imposes requirements on Federal agencies with respect to the manner in which they collect, use, disseminate, and maintain records containing information pertaining to specific individuals. For example, information obtained for one purpose cannot be used for other purposes without the concerned individual's consent. Records maintained by PHS with respect to grant applications, grant awards, and the administration of grants are subject to the provisions of the Privacy Act and the implementing regulation issued by HHS (45 CFR Part 5b) if they constitute a "system of records" as defined in that regulation. Records maintained by grantees are not subject to the requirements of 45 CFR Part 5b. The consideration of a request for information concerning an individual, made by a party other than the subject individual, will take into account both the right to know of the requester (under the Freedom of Information Act) and the right to privacy of the individual to whom the record pertains (under the Privacy Act).

Salary Information in Application
Applicant organizations shall have the option of omitting specific salary rates or salary amounts for individuals from copies of grant applications that are made available to outside reviewers. For this purpose, the term "outside reviewers" refers to persons who are not regular employees of PHS. This option would apply to types of applications subject to objective review requirements, e.g., new applications and competing continuation applications, under programs where personnel costs are required to be shown by position. When an applicant exercises this option, the following conditions shall apply: salary rates must be included in or attached to one copy of the application whic