The National Institutes of Health (search) moved toward new ethics rules for its researchers Tuesday, a step officials hope will end controversy over paid consulting arrangements between some of its doctors and major drug companies.

NIH Director Elias Zerhouni (search) was to announce the new rules at an agency briefing.

The action drew praise from Rep. Diana DeGette, D-Colo., who has been critical of Institute policies allowing its scientists to take consulting jobs.

"NIH's previous ethics requirements were unworkable -- not at all what the public deserves from our nation's premier research institution," said DeGette.

In September the Institute proposed to ban outside consulting work by its roughly 5,000 or so scientists in the wake of media reports that some researchers received thousands of dollars from industry.

That proposal, planned to last for a year, was intended to give the agency time to develop new ethics regulations.

It doesn't affect scientists' official duties in turning basic research into health treatments, duties that often involve some work with industry.

Rather, the restrictions focused on a fraction of agency scientists -- about 120 by one count -- who have arranged private consulting deals with industry. In one case uncovered by Congress, Pfizer Inc. (search) allegedly paid an NIH researcher half a million dollars over five years, in part to help the company's research of brain disease.

Such arrangements have raised widespread concern in Congress and among the public as to whether they represent a conflict-of-interest for researchers.

In May, Zerhouni told Congress that the agency needed to tighten its rules but said some collaboration with industry and academia is vital to advance science and to translate discoveries into medical practice.

"It would be a mistake to ban all compensated activities with outside organizations. Such an action would be bad for science, unfair to the employees and ultimately hinder our efforts to improve the nation's health," he said.

And former NIH Director Harold Varmus said that allowing NIH scientists to do outside consulting has helped in recruiting better researchers.

Varmus, now president of the Sloan-Kettering Cancer Center (search), relaxed some rules, allowing NIH scientists to do outside consulting and accept speaking fees, when he headed the agency in the 1990s.