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National CrossTalk Fall 1999
News Editorial Other Voices Interview

News
1 of 4 Stories

UC Berkeley's Experiment in Research Funding
Controversial $25 million agreement with Novartis raises academic freedom questions

By Carl Irving

Berkeley, California

  Graduate student Johann Leveau works in a plant and microbial biology lab at UC Berkeley.
  Graduate student Johann Leveau works in a plant and microbial biology lab at UC Berkeley.  
ALMOST ALL FACULTY members in an entire department at the University of California, Berkeley, including plant specialists noted for their research in genetic engineering, have signed on to an unprecedented five-year, $25 million agreement with a single company.

In return for its investment, Novartis of Switzerland will have first bid on about one-third of the research discoveries of the highly productive Department of Plant and Microbial Biology, whether they were sponsored by the company or the federal or state government.

Some Berkeley faculty members have criticized the agreement because it ties the university too closely to commercial interests, others because it further erodes the faculty's role in campus decision-making.

But supporters, including 29 of the department's 31 professors, point out that the pact allows faculty members to choose the research, has no limits on publishing their findings, and creates a working alliance with a company that has a $2.5 billion budget for research and development in the life sciences.

The 29 professors have received their first installments from Novartis -- $50,000 to $200,000 each -- for studies subject only to approval by a committee, a majority of whose members are faculty colleagues.

They also will have access to Novartis' own research, information that proponents say no campus has the means, equipment or staff to collect on its own. They foresee that this will provide, for the first time, a path from basic research at the campus lab to application and development.

The Novartis database "enables us to interact with the company to let technology grow up," said Bob B. Buchanan, department chairman. "Technologies are often born in a university's basic research laboratory, but they can't grow up at a university...Faculty members now won't have to take machetes to cut through to make a trail.

"Without that money, we would have been in serious difficulty, and because of that support, we have a fine crop of students coming in who otherwise might have enrolled in better-funded, medically related fields," Buchanan said. Part of the Novartis payment is budgeted for graduate programs, fellowships and seminars, and for attending national conferences.

"Now we can tell grad students and post-docs that we can think longer term and say 'here's the direction' and 'we're going to go,"' said Peggy Lemaux, a member of Buchanan's department. An expert on using genomics to improve wheat and corn production, Lemaux received a $150,000 grant from Novartis this year. "Now we have the opportunity to say we'd like to try this sort of hare-brained scheme, because the university sees you have a track record of producing," she said. "Under the federal system, the project virtually has to be done before you can apply for money."

The arrangement also differs from far more typical contracts with private companies, in which individuals or small groups of faculty do specified research that might entail confidentiality and the sponsor's exclusive rights to findings.

The Berkeley agreement has inspired other major American research universities to seek similar agreements with industry. Dean Gordon Rausser, of the Berkeley College of Natural Resources, who directed the successful negotiations, said he personally knows of at least three such efforts.

Rausser said the alliance provides "an optimal fit" between academic research objectives and an industrial partner's goals, while maintaining "absolute faculty freedom and autonomy, obtaining otherwise cost-prohibitive technological resources for our faculty, and maximizing discretionary resources for our infrastructure and graduate programs."

Many agree with Rausser.

"This is a brilliantly conceptualized model for virtually every institution in the country," said Louis Berneman, managing director of the Center for Technology Transfers at the University of Pennsylvania and president of the Association of University Technical Managers. "It preserves academic freedom (but) allows knowledge created responsibly to be applied for the public good from the laboratory to the market place."

The pact provides that Novartis has the right to submit the first bid on faculty discoveries sponsored by it or by government agencies, up to the proportion of its support for department research -- about one-third of the total.

Novartis' new partner -- Berkeley's Department of Plant and Microbial Biology -- is regarded by peers as one of the best in the world. For instance, Buchanan and others in his laboratory have discovered a way to exploit a naturally occurring product, called thioredoxin, to make proteins, such as those found in wheat and milk, more digestible and less allergenic.

Eleven members of his department have internationally known research programs in biotechnology, and the faculty includes some of the world's leading experts on plants and microbes. Their studies locate and determine the functions of genes in crops. The next step, genetic engineering, is more controversial. It involves splicing genes from different organisms, leading to discoveries which increase crop production and produce more effective pesticides.

Yet deep differences persist on campus over the terms of this alliance and its consequences. Many professors outside the department believe that the faculty Academic Senate was shut out of a vital discussion about an agreement that some fear could ultimately threaten traditional academic principles.

  Dean Gordon Rausser of the UC Berkeley College of Natural Resources, directed negotiations with Novartis.
  Dean Gordon Rausser of the UC Berkeley College of Natural Resources, directed negotiations with Novartis.
"There is an underlying competition for the soul of the university," said Todd LaPorte, political science professor and chairman of the Academic Senate's research committee. Many faculty members fear the Novartis deal signifies a major step in a trend toward diluting "the degree to which we continue our commitment to a wide range of needs to our society," he said.

"Absent state support, our leaders are pushed into a commercial direction. How far are we down the path of privatization, of essentially diluting the public patrimony of an intense institutional investment for the public in the interest of some part of that public? There's been an explosion of faculty concern, on the part of a faculty that usually focuses on its individual research and teaching activities," LaPorte said.

He cited a disputed survey which purportedly shows that two-thirds of the faculty in the College of Natural Resources disagreed with the terms of the contract.

Seventy-five of 120 faculty in the college's four departments responded to the poll conducted late last year by Ignacio Chapela, chairman of the college's executive committee and assistant professor of microbial biology in the Department of Environmental Science, Policy and Management. But Dean Rausser contends that the survey contained biased and misleading questions which skewed the results. He claims that the answers to the direct questions regarding the contract show "overwhelming support."

Chapela vigorously denied this. The majority oppose the contract, he said in an interview, because "it is about the extension of this agreement, initiated by a few faculty members, to this college and campus...The most important thing is not the research but the image -- we are selling the logo of the university very cheaply."

That gets to the heart of the objections, according to Robert C. Spear, chairman of the Academic Senate and director of the Center for Occupational and Environmental Health in the School of Public Health.

Spear is "ambivalent" about the agreement but said "there are faculty members within the college who feel that they're not a part of this and don't want to be part of this, but they are a part of it just because of the way the agreement was concluded. I think they're worried about guilt by association in a way, because this agreement was entered into without their consent. That's what bothers people."

"We fear that in our public university, a professor's ability to attract private investment will be more important than academic qualifications, taking away the incentives for scientists to be socially responsible," two of Chapela's department colleagues, Associate Professor Miguel A. Altieri and Professor Andrew Paul Gutierrez, wrote in a letter published in the UC Berkeley alumni magazine California last summer.

Altieri said in an interview that he spent the last two decades "trying to make agricultural systems self-sufficient by using natural enemies that cannot be captured by corporations, so that farmers don't need to buy their pesticides." But Berkeley lost support for such efforts eight years ago when it eliminated its division of biological control, which had concentrated on such goals.

"For more than 40 years we trained leaders in the world about biological control...A whole theory was established here, because pesticides cause major environmental problems," Altieri said. "They lose their impact, and the cost of human poisoning of farm workers in California and worldwide is alarming."

Altieri says angrily that the leadership at Berkeley headed in the wrong direction, seeking support for gene-altering research, while his and colleagues' research has received no such support. "Who are they to decide for the university?" he asked. "This is a public university. We have social responsibilities to the state. Who gave the right to a group of professors and deans to do this deal, when it's supposed to be a public university with faculty governance?"

Donald T. Kaplan, a professor of plant biology who is in his 35th year at Berkeley, agrees with Altieri. Kaplan is one of the two department faculty members who refused to sign up with Novartis. He said the deal "drives a further wedge between research and teaching...The university no longer is an independent force. Its research is done as a tool for industry."

As at other research campuses, faculty members perceive a waning role for academic leadership as boundaries between campus and private business ventures fade away.

The contract "is one step further away from the reality of a publicly-funded university, where all ideas rise or fall on their own merit and where tensions exist between the demands of academic freedom and the politics of the state of California," Robert Berring, a law professor at Berkeley's Boalt Hall, wrote in the alumni magazine. "For all the anger, silliness, and lugubrious pretensions of Berkeley campus politics, the one thing that has always impressed me was that it was a faculty-controlled campus."

"To some degree the Senate has been ignored and emasculated (by the administration)," said David Littlejohn, emeritus professor of journalism and chairman of the Academic Senate's academic freedom committee. "That's very rare." Questions submitted by the Senate to the administration were ignored. "'Trust us' was the sum and substance of the response," Littlejohn said.

But Berkeley Chancellor Robert M. Berdahl said in an interview that the faculty was kept fully informed and that all traditional faculty rights and freedoms remained fully protected. In fact, Dean Rausser contends that the faculty got unusual attention:

"When's the last time the entire Academic Senate and other faculty have seen an agreement before it was signed?" he asked. "It hasn't happened on the Berkeley campus, and I doubt seriously that it's happened anywhere else; in fact I know it hasn't happened at places like MIT or Stanford."

Eight three-hour meetings between administrators and faculty preceded the agreement with Novartis, according to one administrator. Berdahl and others call the agreement an "experiment" that will be monitored by experts appointed by the chancellor. And they note that, under terms of the contract, the agreement can be cancelled after a year's notice.

The formula for limiting Novartis' funding to a third of the department's total research support insures academic freedoms, the University of Pennsylvania's Berneman said in an interview. He cited a study published in the New England Journal of Medicine in December 1996 by David Blumenthal, an associate professor of medicine at Harvard Medical School, who surveyed more than 2,000 faculty members in the life sciences at 50 U.S. universities. Blumenthal concluded that their research remained unbiased if support from business and industry totaled less than two-thirds of the funding.

Rausser and other administrators contend that objections on campus tend to reflect a mix of naivete and envy that could block efforts needed to adjust to the changing world.

"If we allow a minority of students and a handful of faculty to control the research agenda for other faculty, fewer outstanding professors will come here, fewer of the best students will enroll and ultimately the university will attract less public support," Rausser said.

Many members of the Academic Senate who got involved "know nothing about industry-university collaboration, and fastened on to aspects of this agreement that were represented to them as a great departure," said Vice Chancellor and Provost Carol T. Christ, Berkeley's second in command, who helped get the contract approved. "I don't see it as that unique. This is not like a sort of satanic force. Proponents argue it's a carefully prepared agreement, an appropriate way to respond to changing conditions of the biotech industry and the changing face of university research.

"The college contains a very wide mix of disciplines and very opposite political points of view...It's a very contentious college, because you have everyone from the kind of Birkenstock-wearing, save-the-planet types to people who are very much involved in genetic research and modifications of the genetic structure of plants in order to create greater productivity in agriculture," she added.

  Professor Robert C. Spear, chairman of the UC Berkeley Academic Senate, worries about pressures the agreement might put on faculty members.
  Professor Robert C. Spear, chairman of the UC Berkeley Academic Senate, worries about pressures the agreement might put on faculty members.  
"The college has a history of intense political animosity in it," the vice chancellor said. "On the shoulders of the Novartis agreement rests a much larger debate about biotechnology. I've been concerned personally that the university doesn't seem to be engaging that debate in a constructive way."

Chancellor Berdahl believes there is no alternative to accepting research support from private sources, something that has in fact been happening for decades. The Novartis agreement is different only in that it was negotiated with an entire academic department rather than with an individual, he said. The chancellor contended that the university cannot depend solely on publicly-funded research, although "our public interest has to be of paramount concern to us."

The Novartis contract has its roots in earlier efforts at Berkeley, plus a steadily growing commitment among firms to sponsor university research. Nationally, industrial support reached $1.8 billion in 1998, a 33 percent increase in five years, and double the amount spent a decade ago. Last year, industry support represented more than seven percent of the overall amount spent on campus research nationwide, and is expected to double in the next decade.

Such agreements became possible following congressional legislation in 1982, giving universities the right to license patentable inventions. Before then, many discoveries sponsored by federal research had never become commercialized. Since then, campuses increased patent licensing by 75 percent from 1990 to 1995, while patent royalties more than doubled and licensing fees nearly tripled, from $248 million in 1992 to $611 million in 1997.

UC President Richard C. Atkinson has encouraged more research ties to industry. His office boasts that the nine-campus system "is the most productive university in the country in moving its ideas into the marketplace," leading the nation in the number of patents produced and in patent revenues. In the past five years, the Berkeley campus alone has had 29 "spinoffs" -- companies founded by faculty or graduates.

Two unusual contracts involving private institutions preceded the Berkeley-Novartis agreement.

The Monsanto Company has been providing varying amounts, currently about $5 million a year, for biomedical research at the Washington University of St. Louis medical school since 1982. The company, headquartered in St. Louis, provides grants through a committee composed of three Washington University faculty members and two Monsanto employees, and the awards are based "more on scientific merit than on industrial relevance or market issues," according to Andrew Neighbour, associate vice chancellor for technological management. "It's a valuable program, and both parties are delighted with it," he said. Monsanto has the right to first bid on research it has funded, but all Monsanto-sponsored research is subject to campus patents, and faculty investigators are free to publish results.

An outgrowth of the long-standing ties, Neighbour said, has been the non-profit Donald R. Danforth Plant Sciences Center in St. Louis, involving Monsanto, Washington and Purdue universities, and the University of Illinois.

A decade later, Scripps Research Institute (SRI), which is not affiliated with any university, agreed to terms with Sandoz, a pharmaceutical company that subsequently merged with another firm to become Novartis, for $30 million a year in exchange for the right to first bid on all biomedical research findings. The National Institutes of Health interceded because it did not want a single private company to monopolize the research of a major center that receives NIH funding. As a result, the agreement was amended to limit Sandoz to 39 percent instead of 100 percent, and funding was reduced to $20 million annually, about ten percent of SRI's budget.

Grants are unrestricted, and one of the benefits has been to recruit new scientists, including beginners, SRI officials said. "At no time can Novartis tell us what research to do or not to do or prevent us from publication," said Arnold LaGuardia, SRI's senior vice president. "We preserved academic freedom with unrestricted money."

Shortly after the SRI agreement was signed, former Berkeley Chancellor Chang-Lin Tien established a biotechnology planning board to develop strategies for stable long-term arrangements with corporations for technology transfers in biotechnology. The model provided for undesignated research support in return for the first right to negotiate for a fixed percentage of patentable discoveries.

Tien, a professor of mechanical engineering, had watched nearby Stanford University flourish with such arrangements involving computer and related technologies that helped create Silicon Valley. He also had watched UC Berkeley faculty and graduates help to establish some of the world's leading biotech firms, such as Genentech and Chiron. So Tien and his advisors anticipated that medical and cell biologists would provide Berkeley's first model contract. But negotiations with a large pharmaceutical firm fell through and five years passed before the plan was used successfully by Dean Rausser and the Department of Plant and Microbial Biology.

The department sought industrial support, Rausser and Buchanan said, because private spending for food and agricultural research tripled between 1960 and the 1990s, while federal and state support declined. By the '90s, support for such studies had dropped to less than two percent of the annual federal research budget.

Rausser led the search for a contract by turning traditional university-industry negotiations upside down.

Ordinarily, campuses and their faculties seek research support by writing requests and then waiting passively for research proposals from government agencies or industries. But Rausser drew up a plan based on the Tien group's design and called for competing bids. "Contrary to prior practice," Rausser said, "the alliance was structured by Berkeley, and the corporate candidates were asked to compete among each other to meet its conditions."

After interviewing a number of interested representatives, the dean invited five firms to submit proposals, and three responded: Monsanto, Novartis, and a partnership between DuPont and Pioneer Hi-Bred. Assurance of academic freedom, faculty ownership of discoveries and Novartis' "adherence to university professional standards," were key reasons that its offer was accepted after lengthy negotiations, Rausser said.

Administrators held 28 meetings with scientists and Novartis officials before the contract signing. "One wonders if as much thought went into the Magna Carta, let alone the Declaration of Independence," Buchanan said.

The Novartis agreement caused no stir among members of the UC Board of Regents, according to Bill Bagley, a former state legislator and a regent for the past decade. In fact, Bagley could recall no board discussions on such issues, and he regards increases in industrial support as inevitable. "Forty years ago the state covered 60 percent of the operating budget," he recalled. "It's been going down steadily, so it's no longer a state university but a state-subsidized one."

Clark Kerr, a former UC president and Berkeley chancellor, said agreements such as this require "supervision -- an individual faculty member wants to get his money and isn't concerned with all the repercussions about what he's doing. So you can't leave it up to the individual researcher."
The contract illustrates Dean Rausser's vision of a successful research university: one surrounded by a cluster of industries feeding on "usable research" produced on the campus. The path from innovation to the marketplace travels full circle, he told a national meeting of fellow agricultural economists in August, because the industries hire the graduates, enriching the campus with patent royalties, and helping to make the campus attractive to the best faculty and students.

"Without proper policy design and implementation, universities could become pawns of powerful private interests," Rausser said. But he believes universities must help spawn commercial applications, because the lines between pure and applied research have faded.

  Miguel Altieri, one of two department faculty members  who refused to sign the agreement.
  "Who gave the right to a group of professors and deans to make this deal?" asked Miguel Altieri, one of two department faculty members who refused to sign the agreement.  
"Now that a number of companies have moved forcefully into long-term research and development in the field of life science, their planning horizons have become more aligned with those of research universities," Rausser said. "If it were not for public/private research partnerships, it is unclear when or if critical technologies such as lasers, protease inhibitors and bioengineering would have made their way into the marketplace...Now, if over time there is a drift away from faculty exercising their best judgment, and their judgment (is) being influenced by the incentives that exist with regard to commercialization, then it's a failure."

This prospect nags at Robert Spear, Berkeley's Academic Senate chairman, who has no doubt that Novartis will influence research in the Department of Plant and Microbial Biology. "The question is: How pervasive is it? The agreement permits Novartis first bid on about a third of the research results. That's clearly a big chunk."

Spear expects that new faculty in the department will be under pressure to join in the Novartis contract. But Rausser says that, in fact, two newly hired professors in the department this year declined to become part of the alliance at this point. The department was able to hire them because of the overhead funding that came with the contract, he said.

Yet there is that permanent "philosophical crevasse," in Spear's words, within the College of Natural Resources, between those who favor gene engineering and those who talk of sustainable agriculture through biological control.

The dean is all too aware that such differences won't end any time soon. During a ceremony in which he publicly announced the Novartis agreement last fall, he spotted a pie sailing toward his head and had to call on his experience as a teenage boxer. Rausser, who had been a welterweight Golden Gloves title holder, ducked just in time, and the missile splattered harmlessly on a blackboard behind him, only briefly interrupting proceedings. Although the incident involved off-campus demonstrators, it could not have surprised many administrators or faculty.

Carl Irving is a freelance writer who lives in the San Francisco Bay area.

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