Dear Colleagues:

I thought y'all might like to read this.

TB

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 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