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Proceed With Caution

The debate about academic researchers getting too cozy with industry rages on.
It's a relationship that can work, however, if certain rules are followed.

- By Thomas K. Grose

Robert Langer is an unlikely pioneer in the burgeoning field of bioengineering. For one thing, he's not a biologist. Yet, Langer, 54, a much-honored professor of chemical and biomedical engineering at the Massachusetts Institute of Technology, is pre-eminent in the field, and his work has led to highly effective and novel cancer therapies and drug-delivery systems. His name graces more than 400 patents, licensed to scores of companies. Around 35 products have been sparked from his research. Indeed, Langer has found 12 biotech companies. By almost any measure, he is a success, an archetypal 21st-Century Renaissance man who adroitly blends cutting-edge academic science with entrepreneurial commerce.

When he began his work, just ahead of the biotech boom that commenced in the early 1980s, academic research in the life sciences and business were strangers to one another. Langer was initially a pariah for having the audacity to link them. And today on the nation's campuses there remain pockets of disquiet about this ongoing mating dance between academia and private enterprise, and where it may lead. Voices of warning and caution—some quite alarmist, some more measured—pipe up with regular frequency. Two recent books—“Universities in the Marketplace,” by former Harvard President Derek Bok, and “Science in the Private Interest” by Sheldon Krimsky, a professor of public policy at Tufts, turn a critical eye on these collaborations.

To Langer, however, collaborating with industry just made sense. His team was developing ideas with potentially life-saving applications, and without the help of corporate partners, he reckoned, “they weren't going to get out to the public.” Only industry has the hundreds of millions of dollars to research, test, and bring new products to market. Of course, in the past two decades, these kinds of academic-industrial ties have become commonplace, and Langer's business acumen now commands respect. Federal and many state laws encourage collaboration and make it easier for research universities to work with the private sector. The result: a wellspring of new lifesaving drugs and other life-enriching products, as well as the birth of the biotech sector and the enhancement of the information technology industry. Billions of dollars of wealth and countless jobs have been created. And for many schools, the commercializing of academic research and the funding of research by industry have unearthed new revenue streams and helped keep their labs humming.

Conflicting Interests

Critics fret that American academia's long and fine history of basic research could be crippled if too many scientists focus too much on the kinds of applied research that industry needs. Cozy relations between industry and universities have at times led to dangerous conflicts of interest, untoward secrecy that's anathema to good science, and to the suppression of information. “The consequences are that secrecy has replaced openness; privatization of knowledge has replaced communitarian values; and commoditization of discovery has replaced the idea that university-generated knowledge is a free good,” Krimsky writes in his book. The consequences, he tells Prism, could be an irrevocable erosion of public trust in research schools. “What is happening is that integrity is being compromised left and right.”

To be sure, there have been high-profile episodes of egregious lapses in judgment as well as unsettling studies that underscore these concerns. For example, a gene-therapy trial at the University of Pennsylvania Medical School resulted in the 1999 death of 18-year-old patient, Jesse Gelsinger. What wasn't disclosed until later was that both the school and the director of the institute conducting the trial had huge financial stakes in the company that financed the research. Then there's the study that found that 35 percent of major engineering research centers say it's O.K. for industrial partners to edit out information from papers ahead of publication. While few critics want to re-erect the old barriers between academic science and business, or even think that that's possible, they argue that steps need to be taken to minimize conflicts of interest and protect the reputation of American research schools.

Certainly the past 20 years have seen a rapid rise in partnerships between academia and industry that shows no sign of peaking. The Association of University Technology Managers (AUTM), in its FY 2001 survey of members, found that royalties from product sales totaled $845 million, a 12.5 percent increase over 2000. And while gross license income fell from $1.26 billion to $1.1 billion, other figures indicated that the commercialization trend remains healthy. Invention disclosures jumped 4 percent to 13,569, while new patent applications were up nearly 7 percent to 6,812. A total of 22,937 licenses and options were active that year, a 9 percent increase over 2000. Moreover, AUTM reports its membership has more than doubled in the last five years to 3,200, an indication that universities continue to open or expand technology-transfer offices.

Additionally, industry spending for academic research dollars continues to climb, going from $1.4 billion in 1994 to $2.2 billion in 2001, a jump of 57 percent. But then, federal spending has been accelerating at only a slightly slower pace: It rose 51 percent to $19.2 billion in the same period. But when one takes a longer view of industry support for academic research, the increase in support is more apparent. In the 1960s, industry money accounted for just 3 percent of academic research funds; today it's nearly 8 percent, on average. But there are schools where corporate dollars comprise 30 to 40 percent of their research budget. Meanwhile, some schools are on a private-sector bender. Duke, for instance, received $109 million in research money from industry in 1999, more than triple the $31 million it got in 1992.

Added Value

The growth in campus-corporate ties is easy to explain from the schools' point of view. It's a new and potentially huge source of revenue. As the U.S. economy continues to muddle through a slow-slog recovery, research universities and the lawmakers who help fund them see commercialization as a means of not only bringing in money to the schools but as a tool for regional and statewide economic development. Across the nation, governors are asking legislatures to inject funds into technology-transfer offices and to enact laws making it easier for schools and faculty members to commercialize research. “Legislators realize that the knowledge industry creates the jobs of the future. And that's what legislators get elected to do—create jobs,” says Patricia Harsche-Weeks, AUTM president. What's more, says Bok, the former Harvard president, there is no such thing as a university—public or private—that is ever satisfied with its financial resources. Competition between schools has always been fierce as they fight for the best faculty, the best facilities, the best students. And that's an expensive rivalry that imposes “a chronic condition” of financial neediness, he notes.

Collaboration shifted into overdrive after 1980 when Congress passed the Bayh-Dole Act, which gave universities the right to patent intellectual property that resulted from taxpayer funding. And Bayh-Dole's effect was further enhanced by subsequent laws, including tax breaks to companies that fund research. Before the act, universities were applying for about 250 patents a year, compared with nearly 7,000 a year now. And while Bok wants both sides to exercise caution, he tells Prism that “Bayh-Dole was a positive. It's a plus if universities try to make the process of technology transfer more effective.”

Perhaps the biggest fear is that academics, seduced by the lure of filthy lucre, will concentrate so heavily on applied science that basic, blue-sky research will be squeezed. “We're concerned that universities will become just another outpost of industry,” says Virginia Sharpe, director of the Center for Science in the Public Interest's Integrity in Science Project. But studies show that that fear is unrealized. At least so far. Since the late ‘70s, the percentage of basic research conducted on U.S. campuses has remained unchanged, despite the increase in corporate dollars. “We haven't seen that,” responds Lita Nelsen, director of MIT's Technology Licensing Office, when asked if scientists are abandoning basic research. Bok writes that if some areas of basic research are underfunded, “that's likely to reflect the shortsightedness of government authorities (or perhaps foundation officials) rather than the malign influence of business.” Many academics dispute that there is a divide between public and commercial interests because using industry to bring good ideas out of the lab to meet human needs is in the public interest. Notes Langer: “Certainly the things we do are in both interests. What we do certainly is in the public interest—improving people's health.” And it's to be expected that companies need to earn a profit from investing in that process, he adds.

If basic research isn't on the wane, some schools have figured out ways to do additional, profitable work simultaneously. Duke, for instance, leads a consortium of schools that conduct for-profit drug testing for the pharmaceutical industry. But even proponents of collaboration say some corporate work should be eschewed. Universities need to be wary of “trivial research,” like tests to determine if brand name drugs are more effective than generic rivals, Bok writes. Christopher Edwards, a professor of mechanical engineering at Stanford University, is also deputy director of the school's new $225 million Global Climate and Energy Project. The 10-year program, called G-CEP, is funded by four companies—ExxonMobil, General Electric, Slumberger, and Toyota—with the goal of seeking options to stop or sharply cut global emissions of “greenhouse gases” that come from burning fossil fuels. Many scientists say greenhouse gases contribute to global warming. Given his remit, Edwards clearly sees value in working with private enterprise. But, he warns, universities must not become “the applied-science arm of industry.” Edwards recently toured the labs of another big school, and it seemed to him as if all of its projects were designed as problem-solving tasks for various companies. “That's not research, that's contract work,” Edwards says, which is a waste of time and talent. “Why would a university want to do that? It's not expanding knowledge.” But many schools justify taking on such chores, claiming the money can be used to support other, loftier research and build needed infrastructure in their labs.

There's a widespread perception that only the government, and not corporations, support basic research. On a whole, that may be true, but there are times when research seems so speculative, so risky that it's the government that balks at paying for it. For instance, Jim Swartz, a chemical engineer at Stanford, is working on research to see if microorganisms can be used to capture and convert solar energy to hydrogen. The Department of Energy would not get involved, so he's forging ahead using G-CEP funding. James L. Sweeney, a professor of management science and engineering, who helped bring G-CEP to fruition, says that regardless of where a researcher gets funding—the government, the private sector, a foundation—it's never totally free of strings. After 30 years of research, he adds, very often “I've found industry funding sources less constraining than government” sources. MIT's Langer says government agencies often opt not to fund promising research. Edwards says that the idea that academics can work on any research that is totally detached from having an application at some point in the future, even if there is no corporate money involved, “is pretty much a fallacy.”

Staying Mum

One of the darker offshoots of collaboration is stories of efforts to quash findings that run counter to a company's commercial agenda. In recent years there have been several high-level examples of drug researchers who have endured heavy-handed pressure to sit on findings and had their careers jeopardized when they balked and published anyway. What's not known is how widespread of a problem this is. The worry is that other academics have also faced such pressures and quietly given in. Sharpe says that past scandals involving tobacco, lead, and pesticides prove that companies have been willing to manipulate science for noxious goals. Regardless of how rampant such cases are, the fact that they can and have occurred has led to some rule tightening. Two years ago, the top 10 medical journals, for example, agreed to accept articles only after guarantees from researchers and sponsoring companies that unfavorable findings haven't been suppressed, or that results haven't been doctored. If part of the problem stems from academics signing contracts without properly digesting the fine print, some schools are becoming more proactive in vetting contracts between individual academics and companies before they're signed. AUTM's Harsch-Weeks says university lawyers can close loopholes that would let companies suppress information.

Secrecy is another issue. Schools and academics have been pressured by companies to delay findings. And that's a slap at the ingrained practice of free exchange of scientific research. While it's understandable that a sponsoring company may want some time to file a patent, there have been many instances where companies have sought postponements that go far beyond the need to protect proprietary information. The National Institutes of Health (NIH) suggests that a delay of a month or two is reasonable, but some schools, like Texas A&M, set the deadline at six months. And too often it's the universities themselves placing too many restrictions on the free exchange of information. “Some schools have sought exclusive patents when a nonexclusive patent might be better,” Bok says. The NIH says it gets complaints from industry that undue restrictions placed on research tools by universities are hampering scientific discovery.

What's ironic about the paper-money chase is that very few schools earn substantial sums from commercialization, at least not from technology transfer. The latest AUTM figures, from 2001, show Columbia University as the tech-transfer powerhouse, grossing nearly $130 million from transfer fees, a whopping amount. MIT was a distant second at just under $74 million, while the University of California System ranked third at nearly $67 million. But the grosses for many top-flight schools are hardly eye popping. Consider: Duke, $5.6 million; Georgia Tech, $4.6 million; the University of Southern California, $1.9 million; Princeton, $1.7 million. Only half of all patents are licensed, and the average income per license is a mere $20,000. And the legal costs of handling intellectual property, including the protection of patents, aren't cheap. Some schools surveyed by AUTM spend more in legal fees than they collect from patents and licensing. The sluggish economy also takes its toll. Tech-transfer officials now spend time chasing companies that are late in paying licensing fees.

Checks and Balances

Even champions of entrepreneurial academic research say that strong ground rules are needed to keep abuses in check. In fact, MIT's set of rules overseeing commercialization is considered a great model. The Center for Science in the Public Interest says that at a minimum, academics and schools should publicly and fully disclose all sources of funding and links to companies. Bok is among those who say that when research places human lives at risk, scientists should be prohibited from involvement if they have a financial stake in any of the companies taking part. He also says that schools should not invest in start-up companies formed by faculty members. Langer agrees, noting that he neither sought nor wanted MIT money when he started his many companies. Historical checks and balances can still be useful in combating dangerous behavior. Peer review remains—more often than not—a good means for ensuring that researchers don't fiddle with their findings. And good, old-fashioned competition among schools also helps keeps them in line. If a school is collecting huge amounts of industrial cash, but it becomes apparent that much of its research has become mediocre, the revenue stream would likely dry up as the school's reputation plummets. Notes Stanford's Edwards, “It's not that much money. It's not worth a school's reputation.”

Commercialization of academic research despite some serious and disturbing bumps in the road has by and large proved a successful route: for schools, for industry, and for the public. Henry Etzkowitz, head of the Science Policy Institute at the State University of New York, believes it's foolhardy to think that science can progress if barriers exist between private-sector and academic researchers, because many great scientists work in industry, and campus-corporate collaboration energizes basic research. Economist Gordon Rausser, in an article he wrote for Berkeley's alumni magazine a few years ago, noted that “access to commercially developed proprietary databases” is essential to providing top-notch graduate education and conducting fundamental research. And then there's Langer's argument that great inventions will languish in labs without industrial support. MIT's Nelsen says preserving basic research while working with industry is something that can and should be done. “But it's an art. You're walking a tightrope.” However, if more schools insist upon and adhere to strict rules of engagement with industry, then perhaps the resulting safety nets will make it a high-wire act with less risk.

 

Thomas K. Grose is a freelance writer based in Washington, D.C.
He can be reached at tgrose@asee.org.

 

 

 
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