This is the second article in a three-part series.
Part 1: A New Deal on Lifesaving Drugs
Part 3: Harvard Eyes New Future for Discoveries

A Harvard cancer researcher needed a rare type of hormone sample to conduct a cutting-edge experiment on fluid movement in tumors.

A biotech firm in Palo Alto, Calif., held exclusive rights to sell that particular type of hormone sample, known as human recombinant relaxin.

The firm, Connetics Corp., offered two free samples to the Harvard researcher and wanted to negotiate a long-term sample-sharing arrangement.

So why did Harvard require the researcher to cut ties with Connetics?

The researcher, a postdoctoral fellow from France, had worked alongside Professor of Genetics Brian Seed, a co-founder of Connetics. And Harvard Medical School’s conflict-of-interest rules create a wall between researchers and for-profit companies in which they have invested.

Seed said he would take no part in the postdoc’s experiment, but that didn’t satisfy Harvard’s conflict-of-interest monitors, who felt, according to Seed, that the deal would have benefited the company by giving it some rights to the discovery.

A committee at the Medical School’s teaching hospitals reviewed the proposed transfer. It took about a year before the panel approved the plan. By that time, the postdoc had returned to France.

“It was a Kafkaesque little kind of absurdity,” Seed says.

Seed isn’t the only Harvard professor for whom conflict-of-interest compliance has proved to be a trial.

Three members of the Radiology Department at the Medical School left Harvard because they found the University’s policies to be too restrictive, according to Harvard professor James H. Thrall, the radiologist-in-chief at Mass. General, one of the University’s teaching hospitals. Those policies prohibit faculty from accepting research funding from companies in which they have a financial interest.

All three sought to commercialize their discoveries through startup companies, but since the cash-strapped startups would compensate them in stock, they would not be able to continue research on their discoveries under the companies’ sponsorship. Thrall and other observers say those restrictions make it harder for academics and biotech firms to collaborate on potentially lifesaving treatments.

“I’m torn because I think we can be more efficient in the process if we were a little less restrictive,” says Thrall, who declined to identify the three individuals, citing confidentiality rules. “On the other hand, I see the devastating effects when people step over the line.”

That debate has taken center stage as Harvard bolsters its commitment to the sciences and encourages its researchers to bring discoveries out of the University’s labs and into the marketplace. In interviews, more than a dozen Harvard faculty members have said that the school’s unusually stringent conflict-of-interest rules have placed a hurdle on the path to innovation.

Complaints about Harvard’s policies come at what the University’s annual financial report describes as an “especially challenging” time for research scientists here. Federal funding for Harvard researchers grew just 1 percent in fiscal year 2006, slower than the rate of inflation. The National Institutes of Health (NIH), which provided $363 million in federal funds to Harvard last year, has seen its budget decrease in real terms every year since 2003. Corporate-sponsored projects account for less than 6 percent of research funding at Harvard, but the University may need to attract more private money in response to the federal funding slowdown.

“Research—that’s what this university runs on, and we have to fund it,” says David A. Weitz, a physics professor who directs Harvard’s Materials Research Science and Engineering Center. Weitz says the University may have to turn to private-sector sources—including venture capital firms—more frequently in the future as federal agencies tighten their purse strings.

The ability to attract private-sector funding could affect Harvard-based research on AIDS, tuberculosis, and other devastating diseases.

Will University policies that place a high wall between research and industry stymie Harvard’s efforts to advance the frontiers of science?

STOCKING UP

The policy prohibiting faculty from owning stock in companies that fund their research is just one of Harvard Medical School’s many conflict-of-interest restrictions. Medical School affiliates also cannot hold most kinds of management positions at for-profit biomedical firms—even if their own research is not linked to the businesses.

For faculty, conflict-of-interest compliance checks have become part of the research routine. “It’s kind of the like the way that you constantly check the way your lab is following the radiation codes,” says George M. Church, a professor of genetics at the Medical School.

Few faculty members oppose Harvard’s rules governing clinical trials, since those rules directly concern the health of patients. But when Harvard officials shut down basic research efforts because of conflict-of-interest concerns, some faculty members say the University is stepping over the line.

“Suddenly you, the inventor, who knows the most about this subject, are enjoined from working on it directly,” says Thrall, the Mass. General radiologist.

Venture capitalist Mark Carthy says that Harvard’s policy is “ridiculous”; professors often have to drop their research at the moment that private investors step in. Carthy is a general partner at Oxford Bioscience Partners, a firm in Boston that has supported several companies based on Harvard’s research.

When a Medical School researcher obtains a patent, he or she often sells licensing rights to a small biotech startup rather than a pharmaceutical giant. Large firms often are unwilling to take risks on new and untested technologies.

But startups “usually don’t have much cash to start with,” Carthy says. So they often pay the researchers—and Harvard—in stock.

In many cases, that means the researcher can’t continue to develop the patented technology.

“In the biomedical area, ideas that come out of labs typically are years, maybe a decade, away from being realized, and so there’s a lot of work still to be done,” says McKay Professor of the Practice of Biomedical Engineering David A. Edwards. “By virtue of those walls being set up, it limits a lot the ability of the faculty to help make those ideas pan out. And that is very likely part of the reason why more ideas don’t come out of the University and affect healthcare.”

‘A SHOT ACROSS THE BOW’

Harvard implemented its current conflict-of-interest policies amid public criticism of research practices here.

In 1988, The Boston Globe reported that a doctor at the Harvard-affiliated Massachusetts Eye and Ear Infirmary allegedly altered the course of his trials on an experimental eye ointment while he owned stock in the company that was set to manufacture the prospective drug.

Early tests suggested that the treatment might not prove effective, and the changes to the trials—made without informing the oversight committee—constituted a violation of hospital policy.

The doctor’s family earned several hundred thousand dollars through stock sales and other financial rewards from the company, according to the Globe report.

At the time, Harvard did not expressly prohibit stock ownership in drug companies. Even though a Massachusetts medical board later dismissed all charges against the researcher and his supervisor, the report raised concerns that Harvard had not provided sufficient safeguards to protect against potential conflicts.

“That just was like a rifle shot right across the bow of fair Harvard, and the Medical School immediately swung into action and put into place one of the most restrictive policies in the country,” Thrall says.

In 1990, two years after the Boston Globe report, the Medical School required all faculty and trainees to inform it of potential conflicts—a policy still in place today.

A decade later, the Medical School considered loosening its regulations and convened a faculty committee to assess them. The school’s dean, Joseph B. Martin, elected to let the current policies stand, “rather than add yet another variation,” he wrote in a statement at the time. And the policies have changed little since then.

One concern is that a faculty member’s financial ties will skew the results of research. “When money is in play, mischief is a constant companion,” Thrall says.

Margaret L. Dale, the Medical School’s dean for faculty and research integrity, says the school is also concerned that if researchers are too closely tied to outside firms, “it becomes a company laboratory.”

“Harvard is very conservative in that regard,” says Channing Professor of Medicine Dennis Kasper, who has served as an executive academic dean at the Medical School. The underlying philosophy, he says, is: “Why should someone on Harvard’s time, on Harvard’s space, and Harvard paying the electric bills, be doing research that could possibly profit them through a company they are forming?”

NOT ‘RUNNING TO THE BARRICADES’

Though some Medical School faculty maintain that Harvard’s conflict-of-interest rules are reasonable, “no one says they’re too permissive,” according to Christopher T. Walsh ‘65 , former chair of the Department of Biological Chemistry and Molecular Pharmacology, who has sat on committees to review Harvard’s policies.

Opposition to the rules hasn’t led to a mass movement at the Medical School. “On balance,” Professor of Medicine Thomas P. Stossel says, “the really entrepreneurial faculty is a distinct minority, so you don’t see anyone running to the barricades.”

Church, the genetics professor, adds that Harvard’s conflict-of-interest policies don’t “stifle creativity necessarily, but they might stifle people from coming here.”

“People who say it stifles creativity often aren’t creative,” he adds. “If you’re very creative, one of the creative things you do is you go to another university.”

But Harvard is encouraging its faculty to become more entrepreneurial, especially as the University tries to catch up with peer institutions that earn hundreds of millions of dollars a year off professors’ patents. A study by the Milken Institute last year ranked Harvard 18th among North American research universities in “technology transfer,” the process of converting research advances into revenue-generating innovations.

In a bid to strengthen ties with industry and bring more inventions to the marketplace, Harvard has hired Isaac T. Kohlberg to reorganize its historically lethargic tech transfer office.

Kohlberg’s success may depend on the Medical School, the source of 85 percent of the school’s tech transfer revenues last year.

Have Harvard’s strict conflict-of-interest rules created an obstacle on this path? Kohlberg says no. “If you look at our policies, they are not very different than conflict-of-interest policies at other leading research universities,” says Kohlberg. “I really didn’t see any effect or any negative impact.”

MIT’s technology licensing director, Lita L. Nelsen, says that her school’s policies for non-clinical trial work are “at least as stringent as Harvard’s.” But at Johns Hopkins, Stanford, and Yale, conflict-of-interest rules are in many ways more flexible for early-stage research.

While all three of those schools provide for committee review of potential conflicts, none of the three holds to a hard-and-fast prohibition against professors investing in companies that fund their basic research.

At Harvard, “we tend to have this categorical, black-letter-law approach,” says Dale, the Medical School research dean.

One reason for Harvard’s inflexibility is its sheer size.

With 10,000 faculty members and affiliates, Harvard Medical School must keep clear-cut policies to avoid being overwhelmed with exemption requests, Dale says. At smaller schools, “it’s much easier to form committees to oversee these kinds of protocols,” according to Kasper.

At Yale, for example, the number of medical faculty and affiliates is slightly more than 3,000. There, faculty members may be allowed to continue with basic research if “the likelihood of any distortion of the research endeavor is minimal,” according to the school’s official guidelines.

Some Harvard researchers are resigned to the fact that the mammoth Medical School may never be nimble.

“If you grow up in bureaucracy, that’s how bureaucracies work,” says Seed.

Seed has found a way to navigate the bureaucracy. He says he has been “very careful to never initiate an enterprise that was based on anything that has come out of my lab.”

And Seed himself has become a tech transfer success story. Research in his lab led to the development of Enbrel, a rheumatoid arthritis drug. His hospital, Mass. General, has sold rights to the discovery and earned $400 million for itself.

Seed’s own cut from the contracts: $133 million.

—Staff writer Nicholas M. Ciarelli can be reached at ciarelli@fas.harvard.edu.

—Staff writer Daniel J. T. Schuker can be reached at dschuker@fas.harvard.edu.


THE CHRISTOPHER J. GEORGES ’87 FELLOWSHIP

‘Research for $ale’ is an examination of the process known as "tech transfer," by which innovations move from Harvard’s labs to consumers and patients across the globe. It is funded by the Christopher J. Georges Fellowship, an annual grant awarded to journalists on the staff of The Crimson and administered by the Nieman Foundation for Journalism. The fellowship supports investigative projects that exemplify Chris Georges’ commitment to in-depth reporting on issues of enduring social value and the human impact of public policy.Chris Georges ’87 was an executive editor of The Crimson and a magna cum laude graduate of the College. As a reporter in The Wall Street Journal’s Washington bureau, he covered politics, economics, and budget issues. Three of his stories on the welfare system were nominated for a Pulitzer Prize in 1997. Georges also served as editor of The Washington Monthly and worked at CNN, The New York Times, and The Washington Post. He died in 1998 at age 33 from complications related to lupus.