CORPORATE U: Corporate Funding Of Academic Research

Wednesday, June 28, 2000

Spurred in part by a Congressional Act which allowed universities to patent the results of federally-funded research, corporate contributions to academic research programs grew from $850 million in 1985 to over $4 billion by the early 1990s. In return corporations receive licenses to the patents generated by that research. Do these new academic-corporate relationships threaten the traditional functions of our universities to educate and to serve the public good? Or does corporate funding serve the public good by bringing the fruits of research to the public sooner and more efficiently?

Recorded on Wednesday, June 28, 2000

Peter Robinson: Welcome to Uncommon Knowledge. I'm Peter Robinson. Our show today, the Academic Industrial Complex. Not long ago that term wouldn't have made any sense. Industry was industry and the Academy was the Academy. Hallowed halls, professors in their tweeds and caps, freed from the demands of commerce and able to pursue knowledge for its own sake. Over the last couple of decades, the relationship between industry and the Academy has changed. Between 1985 and the early 1990's, for example, the amount of money that corporations spent underwriting university research soared from eight hundred and fifty million dollars to more than four billion dollars. What do corporations get in return for all that money? In many cases, licenses to the patents that the research produced. Many professors, these days, are less furor academics than high-tech entrepreneurs. Indeed many own equity stakes in the very corporations that underwrite their research.

(using phone) Buy low, sell high. So it is that we do indeed face an academic, industrial complex. The question on our show is quite simple, is this academic, industrial complex good or bad for higher education?

With us three guests. Chris Scott is Assistant Vice Chancellor for Research at the University of California at San Francisco. Mildred Cho is a Senior Research Fellow at Stanford University and Donald Dahlsten is Associate Dean at the College of Natural Resources at the University of California at Berkeley. Three guests and, as you'll see, three quite different arguments.

Title: The Color of Money

Peter Robinson: In 1998, the University of California at Berkeley, your institution, signed an agreement with the Swiss Pharmaceutical giant, Novartus. The company agreed to give Berkeley twenty-five million for research. Berkeley agreed to give the company negotiating rights for licenses on certain products of that research. One member of the Berkeley faculty criticized the deal as follows, I quote, "This deal institutionalizes the university's relationship with one company whose interest is profit. Our role should be to serve the public good." Profit and the public good, at a university is there necessarily a conflict between the two? Mildred.

Mildred Cho: If you look at what a company does, they are responsible to shareholders…

Peter Robinson: Right.

Mildred Cho: …and the investors in that company and so that's their primary interest.

Peter Robinson: Right.

Mildred Cho: The problem with connecting that with an academic realm is the primary interest of an academic institution is not to shareholders but it's to science and knowledge and getting information and products, if they are useful to the public-to the public. And so sometimes those goals can intersect but sometimes they can be very divergent.

Peter Robinson: Chris?

Chris Scott: I think Mildred's right. At the university there is a emphasis on publication, the freedom to publish, the freedom to discover science in a question driven way. And industry is very commercially focused. Science needs to have a product.

Peter Robinson: Meet your quarterly numbers?

Chris Scott: Right. But oftentimes, these sorts of research focuses come together and it's at this interface, I think, where universities are becoming more and more steely-eyed about what value they might deliver to the corporate sector and also to society.

Peter Robinson: Don, necessary conflict between profit and the public good?

Don Dahlsten: Well I think so and it goes back to the early days of use of chemical insecticides for control of insect pests in agriculture and forestry.

Peter Robinson: You talking about the 1960's?

Don Dahlsten: Yes and there were conflicts then and there were major-major conflicts among the entomological pest management community because they felt that the chemical companies had undue influence on the direction of research at the university. The Novartus deal is viewed the same by many of the faculty in the College of Natural Resources but there's a number of faculty that support it. And the reason for supporting it is they feel that since research funds are waning that they have to do whatever they can to…

Peter Robinson: Sell themselves?

Don Dahlsten: Sell themselves, right.

Peter Robinson: All right now.

Peter Robinson: Does corporate involvement in university research provide universities with anything at all beyond the obvious monetary benefits?

Title: Strength in Numbers

Peter Robinson: Federal government still provides about fifteen billion dollars a year for academic research which works out to about sixty percent of the cost of academic research in America's universities. But the rate of growth in federal funding of research has been dropping for at least a dozen years and corporate giving is meanwhile on the rise. Corporate giving to academic research increasing from eight hundred and fifty million in 1985 to four and a quarter billion by the early 1990's to much more even than that today. Fact set number two, the law. In 1980, congress passes the Bayh-Dole Act which, for the first time, allowed universities to patent the results of federally funded research. Now the idea, as you all know, is to use the research in academic institutions to promote productivity in the economy generally. Since the passage of that act in 1980, congress has passed a lot of other laws to promote ties between universities and industry, including tax breaks for corporations that invest in academic research. So we have federal funding continuing to increase but tailing off at the rate of growth. Corporate funding increasing sharply and a legal regime that not only makes it possible but indeed encourages deals between corporations and universities. Now Chris Scott, you sit at the middle of that intersection between university life and corporate life. What good are you doing for your university?

Chris Scott: One benefit is the access to technology and resources. Many of the investigators that are involved in these sorts of relationships cannot access technology instrumentation knowledge that companies have come up with over the last ten years. So these are very much quid pro quo kind of relationships. It's very important to remember that technology transfer works both ways. And that's the way that science moves.

Peter Robinson: Right. Okay. So it's not just the corporations purchasing the brains of the-of the-of the brilliant people working at places like UCSF and Berkeley. The brains also get to talk to the brains inside the corporations themselves. What could possibly be wrong with that?

Don Dahlsten: I work for a state institution.

Peter Robinson: Right.

Don Dahlsten: We are servants of the citizens of the State of California and I do not feel that we should be bought off, so to speak…

Peter Robinson: Chris is saying it's not only good but it's necessary, benefits the univ-I mean, it's obvious the cash flow helps university research budgets but it also helps the universities do what they need to do which is to research at the cutting edge of technology. And Don says no. It's wrong in principle. We now turn to you to cast the third vote.

Mildred Cho: I think where the-the conflict really comes to a head is when you're thinking about, again, the role of the university as opposed to the role of the company and the role of the university, taking a long-term kind of a-a-a-a view on research and knowledge, and the companies having to focus necessarily in order to fulfill the-the obligations of the shareholders of a-of a more short-term product oriented approach. And so what could happen is if the university tends to shift its role towards more of a short-term focus then it can sort of-there's a potential for losing sight of fields that may not be hot now but they-they may be the basis of the foundation and generating the knowledge for hotter fields that will become products down the road.

Peter Robinson: So what's your…

Peter Robinson: Next question, do university contracts with corporations limit the free flow of scientific knowledge?

Title: Writers Blocked

Peter Robinson: Robert Merton, writing in 1940's, not a famous person to me but this quote that I am about to give you comes up all over the web. "The scientists' claim to intellectual property is limited to that of recognition and esteem." To Merton, writing in 1942, "It is of the nature of scientific knowledge that as soon as it is discovered, it should be widely and freely disseminated." Now the corporations get first dibs on discoveries, on research development and, indeed, the corporations get to say, we would like this kept quiet for six months or three months or a year after the discovery is made to give us a chance to figure out whether we can use it in a way that gives us an edge over our competitors after which you may publish it.

Chris Scott: Now you've mentioned a fairly long time span, anywhere from…

Peter Robinson: Give us a typical time span. Am I wrong about that, a year would be very long?

Chris Scott: Yes, very long and very, very uncommon. A thirty to sixty days is usually where we head and above sixty days, is-is very rare. Now it's important to distinguish between clinical trials research and basic research or the type we talked about today. In clinical trials research sometimes the delays are necessary to collate all the data. So that's the first thing. The second point, as these discoveries are moved into the commercial realm, the fact that companies can take them and actually do something with them is very important. This puts this technology close to the market and close to people who need to use it.

Peter Robinson: Mildred, you published a paper in the annals of internal medicine that produced some alarming findings. Would you care to tell us about that?

Mildred Cho: We examined a number of studies that were published in the medical literature, clinical drug studies…

Peter Robinson: A high number?

Mildred Cho: A high number.

Peter Robinson: Hundreds of them?

Mildred Cho: Right.

Peter Robinson: Okay.

Mildred Cho: And what we wanted to do was to examine whether the clinical drug studies that were funded by private companies had different outcomes from studies that were not funded from-by private companies. And when we did that analysis we found that overwhelmingly the studies that were funded by industry were favorable to the product being tested whereas that wasn't the case with the non-industry funded studies.

Peter Robinson: You found that ninety-eight percent of papers based on industry sponsored research reflected favorably on the drugs being examined as compared with seventy-nine percent of the research that was not funded by industry. Now doesn't that as a-as an academic, doesn't that just chill you to the very marrow? I mean, here you have a clear instance in which industry dollars appear to be influencing the outcome of scientific inquiry.

Chris Scott: It does chill me. I'm not sure it chills me to the-the bone. I think more research is needed…

Peter Robinson: Goosebumps on the flesh that…

Chris Scott: Maybe goosebumps. And also I think Mildred's study is a-is a very good one. I-I've read it. It could be, and I think that Mildred may bring this up in her paper, that companies are actually selecting-there is a selection bias-investigators that are going to be successful.

Mildred Cho: That is a-a potential explanation for the results but I'd like to point to another area which we didn't address specifically in the study which is how influence could be felt. And-and I think Don sort of alluded to this as well. And that is not just the outcome of the study but what is the overall topic or set of topics that are studied and how may that be influenced by the involvement of industry and industry funding. And I can just give you a sort of example of that.

Peter Robinson: Sure please do.

Mildred Cho: One is that there's a lot of funding in biomedical research now, for example, in the area of cardiovascular research because that's a big market. That may be a good technology to transfer for some people. There may be some people who don't have access to those kinds of technologies that really need to have some new device developed for them. But the overall question that-that sort of isn't addressed here is, should the university put its efforts into making more cardiovascular devices when we maybe should be looking at vaccines for malaria or maybe we should look at nutritional interventions that don't require a product at all.

Peter Robinson: Okay. Now this-let's…

Peter Robinson: Mildred makes an interesting point that corporate funding may be changing the focus of academic research. Let's look into that.

Title: Beetle-mania

Peter Robinson: Academics, being human, will tend to focus their work where the money is. And where the money is is not always necessarily going to be where the public good lies. So, for example, tell me about your situation at Berkeley. You do-your work is biological control?

Don Dahlsten: I'm basically an ecologist and I'm entomologist, ornithologist, work in pest management.

Peter Robinson: Right. So you worked on…

Don Dahlsten: Work on natural processes.

Peter Robinson: Right. You fight bad beetles with bad beetles or with…

Don Dahlsten: …with good beetles.

Peter Robinson: …with good beetles. All right. All right. But the kind of work that you've seen being done more and more is molecular biology.

Don Dahlsten: What has gone on is that the emphasis has gone to the molecular because it's very exciting. There has been less emphasis in the organismal area which is the area that I work in. Less in ecology.

Peter Robinson: And you have seen, over the years, in your own practice as a researcher, the emphasis shift in the direction where the money is. Is that roughly accurate?

Don Dahlsten: Yeah, it's roughly accurate.

Peter Robinson: Okay. Is that not a problem for academia?

Chris Scott: I believe that, and these are questions I think for the universities to decide, that the focus on one type of research over another and perhaps even on non-scientific areas of the university, for example, the humanities, is a big question and I think we are leaving very important areas of academic study behind.

Peter Robinson: Stop there for one second. Study that I came across. One study finds from 1970 to 1994, the number of Bachelor degrees conferred in English, foreign languages, philosophy and religion all declined while there was a five to tenfold increase in degrees granted in computer and information sciences. If you look at the great campuses in California and you just fly over them and take time lapsed photographs of where the construction has occurred over the last five or ten years, you will see one new engineering quad and biology building after another and t'aint nobody building additions to the history complexes or the English complexes. The very nature of universities in America is changing and it is not altogether clear that it is for the better.

Chris Scott: Right.

Peter Robinson: Push back on me on that one.

Chris Scott: But I do not believe that you can blame this or that you should blame this on the industry funding of science. This is a scientific change that's blowing and that we have to engage in some sort of public debate about the sciences and the humanities that are potentially going to get left behind in this process.

Peter Robinson: Mildred, do you shed tears when you see the humanities withering relative to the sciences?

Mildred Cho: Well I think it's something that universities have to-to think about. Again, it's a long-term focus issue and maybe universities are-are struggling with their own budgets these days and feeling the pinch and trying to deal with that by going to corporate sources or-or trying to beef up the-the industry in science related parts of their campuses. So…

Peter Robinson: It so happens that I have a few solutions to these problems myself. Let's see what our guests think of them.

Title: Show Me the Money

Peter Robinson: In the field of academic research, a new professional ethic needs to be established, a full disclosure. Somebody at Tuft studied sixty-two thousand articles published in academic journals, discovered that in something like a third of those articles, one or more of the authors had a financial interest in the subject of the research but that in only point five, one half of one percent of the time was that interest disclosed. Well that's-that's outrageous, isn't it? Right? That's outrageous? Okay so we can say there should be an ethic in academic research just like the ethic in journalism where if a journalist is covering something where he has an interest, that's disclosed. And if he doesn't do that and he's found out, it is a serious detriment to his reputation as a journalist. So you'd be-you'd agree with that?

Mildred Cho: I know that this is a topic that, for example, publishers of scientific information such as journal editors have talked about for many years.

Peter Robinson: Have they done anything-I mean, annals of Am-internal-what was it-what was your…

Mildred Cho: Annals of internal medicine…

Peter Robinson: Right. So do they require disclosure of interest before they'll run a piece?

Mildred Cho: They do but the catch is that almost all of the major medical and biomedical journals require disclosure to the editors. But the editors don't necessarily pass that information onto the readers. So…

Peter Robinson: Why, what are they scared of? What's going on here?

Mildred Cho: Well I think-I think they're starting to rethink this position. I-I think the-the idea is maybe that the readers don't really know what to do with that information and the editors do.

Peter Robinson: Send them a tape of this show, the three of you don't agree on anything else but you do agree on this point, right? Now here's what we do next. We repeal Bayh-Dole. We make it illegal, once again, for universities to patent the results of research conducted with federal funding. You for that?

Chris Scott: No.

Peter Robinson: Absolutely against it.

Chris Scott: Absolutely against it.

Peter Robinson: How come?

Chris Scott: Well Bayh-Dole over the last twenty years since its inception in 1982 has put into the public realm over seventeen thousand inventions that are being benefited directly to people who-who need it. Last year alone in the fiscal year of 1999, over forty billion dollars of gross national product are related to inventions that came from universities. Over three hundred thousand jobs were created from the-from partnering with companies through intellectual property transfer from universities.

Peter Robinson: You're-you're in favor on repealing Bayh-Dole? That-that tidies up the whole problem for you, doesn't it?

Don Dahlsten: Not necessarily. Not necessarily.

Peter Robinson: Oh okay. Why's that?

Don Dahlsten: I don't think it's bad for the universities to be able to patent certain products that are developed. I think however, if the products are developed in concert with company money, I might have a problem with that. I-I-I'm not as concerned about…

Peter Robinson: It's not the patenting that bothers you. It's accepting corporate money. That bothers you.

Don Dahlsten: Yeah.

Peter Robinson: Would you simply pass a decree that universities don't get to accept corporate money for anything other than building buildings, let's say? Would you do that?

Don Dahlsten: Okay, I'll do it.

Peter Robinson: You would?

Don Dahlsten: Yeah.

Peter Robinson: What about you, Mildred?

Mildred Cho: Well, I mean, I think if corporations want to contribute to research, one way of mitigating the conflict of interest that wouldn't be popular with companies is to contribute to a generalized fund that can be distributed to researchers who have to apply for grant money just as they apply to the government. And so you remove the link…

Peter Robinson: And the company gets what? Just a feeling of well-being and…

Mildred Cho: Well just generally promoting the research, supporting it.

Peter Robinson: But they don't get license agreements in return?

Mildred Cho: Right. And that-that's where I think the issue is in terms of Bayh-Dole where I-where I come from, is not necessarily the patenting that-that is the problem but it is the sort of these-there are specific kinds of deals where companies automatically get certain kinds of intellectual property in exchange for sponsoring research. And not all deals are like that.

Chris Scott: Mildred has a point and her point really is twenty years old. In 1980, corporate funding of academia was exactly as she described it. These would be called-I call them pleasure of association of relationships. Now that, ten years ago, disappeared and companies started sitting around their corporate roundtables like this and they looked at their executives and their scientists and said, we're going to give a million dollars to Stanford next year and the scientific officer of that company said, you know, that million dollars, I could really use for my project. What value is Stanford giving to us in terms of its intellectual property, discoveries, information, whatever else you want to call it? And companies, frankly, became a lot more steely-eyed about these sorts of relationships. I think where you protect it and where you help guard against the things we've been talking about today is on the front side. It's the negotiation that's very important. It's guaranteeing that the university's missions of freedom to publish, disseminate research, ownership of data, ownership of intellectual property, are guaranteed.

Peter Robinson: But the universities themselves are…

Peter Robinson: Here's my last solution and the one I like best. Just let market forces take care of the problem.

Title: Corporate U.

Peter Robinson: Some universities are going to cut deals that would strike you as outrageous. Let them and just see what kind of research talent they'll be able to attract. Their reputation will adjust in the academic world accordingly. Some universities may discover that they need to position themselves or it is to their advantage or historically, to position themselves as huge research institutions that are always going to slight the humanities by comparison with their research establishments. Forget about it. Don't worry. There are small colleges like Dartmouth of which I'm a graduate which has no competitive advantage in building a huge research complex. Dartmouth, Amherst, Middlebury, little schools will spring up for students who want a traditional, liberal arts education with a focus on teaching undergraduates. Just let the market forces work. These things will sort themselves out. Don't you agree Chris?

Chris Scott: Well to a point. And I'll give you an example of where a market-a market reaction has helped universities. The Human Genome Project that is creating vast amount of data that need to be used to develop drugs and to help people kind of deal with disease. Now there has been a movement afoot in companies, in small companies, to actually patent pieces of genes and thereby provide a limited monopoly through which companies and universities have to pass to get to research results. Now what has happened is that the pharmaceutical companies, the companies that actually design the drug have engaged in an unprecedented partnership, eight of them actually have come together and are now funding parallel efforts with universities that put these data in the public domain so that everybody can use them. So that's an example of actually a defensive strategy that's helping.

Peter Robinson: See. Relax! Let the market forces work.

Don Dahlsten: These techniques, modern molecular biology, are not necessarily going to solve the world problems. There has to be an organismal, an ecological perspective, an overview of this and that is what's happening…

Peter Robinson: The market won't give it to you?

Don Dahlsten: No it's not giving it to us and what is happening with this is that the organizational structure of the universities is becoming biased toward the molecular, away from the organismal.

Peter Robinson: Mildred, let the market forces work. What do you think?

Mildred Cho: I don't think that that's going to be good for the public in the long-term or even potentially in the short-term.

Peter Robinson: Okay. It's television. Our time is almost up. Let me ask you to make a prediction. At the beginning of the show, I mentioned that federal funding now accounts for about sixty percent of academic research. So five years from now, what will that mix be? Is corporate funding going to be up and federal funding down, proportionally?

Chris Scott: If I was to make a prediction on the strings attached kind of research, that is the type of research we've talked about today, under contract…

Peter Robinson: Explicit, contractual deals?

Chris Scott: Right. I think that this will increase and I think it should increase. I do not believe that it is going to comprise the majority of research. At UCSF, we have three hundred and eighty million dollars every year that comes from all sources and industry represents about five percent of it. What I'd like to see..

Peter Robinson: Is it going to stay at five percent?

Chris Scott: I'd like to see it double. I…

Peter Robinson: To ten percent?

Chris Scott: Ten percent.

Peter Robinson: Still on the…

Chris Scott: I do not think it should predominate and I think you should set up things on the front-end to make sure that the mission of the university is intact.

Peter Robinson: Don, what do you think?

Don Dahlsten: I want to be idealistic about this. I think what's going to happen is that the pendulum is going to come the other way when the public discovers, and others discover, that molecular techniques are not necessarily going to solve these problems. And, in fact, they're going to create some, that the types of public interest research will become more common in five years.

Peter Robinson: Mildred, what do you see? What are the vectors that you see and where will they take us five years from now?

Mildred Cho: Well I think just looking at the trends, that corporate funding will increase but what universities can do, especially top flight universities like UCSF and Berkeley and Stanford, can do is use the leverage that they have in their high quality of research in negotiating with companies and making sure that they use that-their quality and all the companies that are trying to beat the doors down to get at the-the technology that could come out of a university, use that leverage to protect the academic mission more than perhaps they have.

Peter Robinson: Don, Mildred and Chris. Thank you very much.

Chris Scott: Thank you.

Mildred Cho: Thanks.

Peter Robinson: Industry and the Academy. Is it a case of barbarians at the gates? If it is, the barbarians are armed with billions of dollars. I'm Peter Robinson. Thanks for joining us.

More from Uncommon Knowledge