Dear Colleagues: I thought y'all might like to read this. TB **** Date: Mon, 13 Apr 1998 12:15:30 -0400 From: Ashley Stevens <xxxxxx@bu.edu> To: xxxxxx@erg.sri.com Subject: NBC Nightly News/Boston Globe Spotlight Series Last Sunday, Monday and Tuesday, the Boston Globe ran a major series in their Spotlight section on who makes money out of the results of Federally Funded research. The general theme was that the Federal Government puts in grant funds and doesn't receive any return on the funding, drugs are priced out of reach of the uninsured, and that faculty make too much out of their inventions through royalty sharing and stock ownership. Among the specifics they discussed were the case of Respigam, sold by MedImmune, which had been the subject of a well publicized investigation by the Inspector General of the Commonwealth of Massachusetts over the transfer of rights from the Massachusetts State Biologic Lab to an independent 501(c)3, and a software spinout from U.Mass, Amherst. A number of us felt that the story did not present a balanced account of how academic technology transfer works, and in particular how the current environment was established because of the ineffectualness of the pre-Bayh-Dole model. Boston University agreed to my writing a letter to the editor to try and tell the other side of the story. The full text of the letter we wrote is below, but it got subedited down to about 200 words, which reduced its impact somewhat, and appeared this morning. >From trailers I heard over the weekend, it sounds as if NBC Nightly News tonight is picking up on this theme in a "Fleecing of America" segment. *********** April 8, 1998 To the Editor The Boston Globe Your Spotlight team has apparently sought to make the case that Federal funding of biomedical research represents a classic case of corporate welfare, waste and mismanagement. The truth is that the stories they outline represent the extraordinarily successful culmination of Federal legislation instituted in 1980 to encourage the commercialization of University developed technology for the benefit of all. Senator Edward Kennedy chaired the Senate Committee, the Judiciary Committee, that passed this legislation. When the Federal Government started funding scientific research at Universities in a major way after WWII, it owned the rights to any resulting patents. It even owned the patent rights if it funded only part of the research. It did a miserable job of licensing the resulting patents -- licensing only 4% of the 28,000 patents it owned by 1978 (well organized Universities, by contrast, successfully license up to 50% of their patents, depending on their commercial potential). In the mid 1960's, it even asserted that it owned the rights to 5-fluorouracil, an anticancer drug still widely used today, even though subsequent investigation showed that it had provided only a small fraction of the funding that went into its discovery. The result was that for the next 15 years, no company would touch University research that had been Federally funded and the creativity of University researchers was lost to the commercial mainstream. In 1980, Senators Robert Dole and Birch Bayh initiated bipartisan legislation that allowed Universities to own title to patents resulting from Federally funded research. The Senate Judiciary Committee, in its discussion of the Bill, fully acknowledged that this would result in a substantial windfall to Universities. They asked whether the Government should participate directly in the income stream and decided instead that the Government's return would come from the taxation on the increased economic activity that would result. They required in the legislation that Universities share the rewards with the inventing scientists, but they also required that products sold in the US be made in the US and that Universities' share of the rewards be spent on research and education -- i.e., reinvested in the processes that produce the people and ideas that are the key to this nation's prosperity. This enlightened policy has been spectacularly successful. The Boston economy owes a good part of its resilience to the constant flow of new ideas from our Universities into the private sector. Nationally, a study by the Association of University Technology Managers has shown that the economic stimulus to the US economy in 1997 from the licensing of University inventions was around $25 billion, almost double the entire funding of the NIH and NSF Budgets. Taxation on this, at the Federal, State and local levels, and consequent benefits to taxpayers, is considerable. This realization is one of the reasons that both Congress and the Administration are planning to double investment in University research over the next 5 years, and that foreign countries are rushing to emulate the American system. Academic science works. In 1993 then Representative Ronald Wyden proposed legislation that would have given the Government a role in pricing of a drug if Federal Funds had been used in its development. The proposal was not adopted. In 1995, the National Institutes of Health, with the concurrence of Congress, dropped the fair pricing provisions from one of its main technology commercialization tools, the Co-operative Research and Development Agreement. Whenever the issue is examined, the conclusion is that the over-riding priority is to remove barriers to the early adoption of new technology and let market forces take over. Do some Universities and some scientists make money, perhaps even a lot of money out of this system? Yes -- that's the American way and that possibility helps drive the whole process. But let those individuals spend the money and the Government will get its share -- that's also the American way. Yours sincerely, Ashley J. Stevens, Ph.D. Director, Office of Technology Transfer Boston University Ashley J. Stevens, Ph.D. Director, Office of Technology Transfer Community Technology Fund Boston University 108 Bay State Road Boston, MA 02215 Ph: (617) 353-4550 fax: (617) 353-6141 We use MS Office 97 We encode in BinHex ***************** Anthony M. Boccanfuso, Ph.D. Associate Provost for Research and Federal Relations Bowling Green State University 106 University Hall Bowling Green, Ohio 43403 419-372-2481; 419-372-0304 (fax) xxxxxx@bgnet.bgsu.edu http://www.bgsu.edu/offices/spar/HomePage.html
