Academe Inc.

University, Inc.

An interview with author, Jennifer Washburn.
by Jennifer Borden, Special to CorpWatch
April 11th, 2005

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In 1998, the University of California at Berkeley struck a deal with Novartis, a Swiss agricultural-biotechnology firm (now called Syngenta), in which Novartis funded one-third of the research budget of a department within the university’s College of Natural Resources. In exchange, Berkeley gave Novartis exclusive patenting rights to one-third of the discoveries generated from the department and allowed Novartis to occupy 40% of the committee that decides where that research money is allocated.

The agreement ended in 2003, but was highly contested by both students and faculty. Dr. Ignacio Chapela, an assistant professor of microbial biology and a prominent critic of genetic engineering who lost his tenure at around the same time, went on to become the center of a fiery international debate.

The Novartis/UC deal might be the best known example of the kinds of challenges that arise when corporate interest and universities mix. But, as Jennifer Washburn, author of University, Inc.: Corporate Corruption of Higher Education, explains below, it is not unique.

CorpWatch: What inspired you to write University, Inc.?

Jennifer Washburn: I had gotten very interested in the privatization of various areas of public life. We had seen the privatization of prisons and K through 12 education, and increasingly private providers were moving into all areas of public life. I stumbled upon an article by a sociologist and was amazed to find out what was happening with the universities – that in many ways they, too, were becoming privatized. The dynamics were different, but it was a similar intrusion of market forces into an area that had previously been governed by non-market principles.

CW: How does corporate influence on the universities affect the “information commons” you refer to in your book?

JW: I think the threat to the public commons is really at the heart of my book. Historically, universities have played an important role in preserving the public domain for knowledge that we all can draw upon for free. We do not tend to think about knowledge as something one can own. People don’t realize how much we depend on this free flow of information, but historians of scientific innovation, economists and legal scholars are starting to grow very concerned about this shrinking of the public domain, particularly as it affects innovation and new technological discovery.

The basic building blocks of science need to be commonly shared in order to advance scientific ideas. Many people now question whether we would even have had the biotechnology revolution or the computer revolution -- which were both born in these academic research labs -- in this more corporate, proprietary atmosphere. Now the universities are trying to make a lot of their discoveries proprietary, even very fundamental, basic research.

CW: Can you give an example or why this is such a problem?

JW: There is a case at the University of Utah in which a professor discovered a human gene that is responsible for hereditary breast cancer. This research was funded by U.S. taxpayers – approximately $4.6 million – and the University of Utah did not make that gene broadly available to the scientific community. They raced to patent the gene, they licensed it to the professor’s own start-up company, Myriad Genetics. Myriad Genetics proceeded to hoard the gene and prevent other academic scientists throughout the world from using the gene in their own research. That’s a very vivid example and I could point to many others. Basic stem cell research has been exclusively licensed to private companies.

CW: Can you explain the Bayh-Dole Act and talk about why it is important?

JW: It’s named after Birch Bayh and Bob Dole, Senators in Congress who sponsored this legislation in 1980, which gave universities automatic intellectual property rights to federally funded research. In the past, universities did not own publicly funded research on their campuses. Now, they were told, “You own the research. You can patent and license it however you see fit and if you license it to industry, you can extract royalty revenues and this can be a new income stream for the university.” The intention of the legislation was actually quite noble. It was, I believe, inspired by concerns about economic stagnation in this country and rising competition from Germany and Japan.

The problem was, no one really thought through what this would do to the university itself. The Bayh-Dole Act introduced a profit motive into the university for the first time. Never before had the university itself tried to gain financial rewards from professors’ research. Professors started their own businesses on the side, working part time in the lab and part time at their own for-profit companies. The question of who owned academic knowledge became increasingly complex. Graduate students and post-docs were now working in labs where the research was proprietary. If they were working on something they planned to use as part of their thesis, how were they going to negotiate who owned that knowledge? In the past, those issues just didn’t arise in an academic atmosphere.

CW: Can you give some of the economic context for the shifts towards academic-industry partnerships?

JW: U.S. universities have long had relationships with private industry. Many of the land grant institutions had, as part of their mandate, a mission to serve local industrial interests. That meant they should provide expert advice to industry and be thoughtful of the needs of industry, etc. During the industrial era you saw the rise of chemical engineering departments that rose up in tandem with these new industries. Professors consulted for industry, their graduate students would often go on to work in industry after they graduated, but there was a very clear line between what was academic and what was commercial.

Even the Massachusetts Institute for Technology (MIT), which has had some of the closest relationship with industry, was wary of anything that smacked of commercialism. For instance, all of the patenting and licensing they did up until the 1970s was contracted out to an independent, third party. So, if a professor felt that he needed to patent his research in order to commercialize it, it would be handled outside of the university. Now, instead, all of these universities have set up very expensive patenting and licensing operations on campus and they are trolling the different labs looking for commercially lucrative inventions.

CW: In University, Inc., you pose the question, “Are conflicts of interest in the university bad for out health? Aside from the breast cancer gene example, can you name other examples that get at the answer?

JW: Medical schools are probably the most conflicted in terms of industry intrusion. So many professors now receive substantial consulting fees from the same drug companies that manufacture the drugs they study. They serve on [drug company] speakers bureaus. They go on junkets to fancy resorts. You might even have a professor who owns the patent to the drug that he is testing in a human clinical trial on campus. This happened at the University of Pennsylvania.

There was a young man named Jesse Gelsinger died in a gene therapy experiment, in which there were violations of federal human subject protection rules. Later, it came out that the lead investigator and the university itself had equity interests in the company that stood to profit off of the research. The public was very alarmed because suddenly everyone realized that [the university] had a profit interest in that study coming out favorably. Certainly, we cannot prove that is why Jesse Gelsinger died, but most of us can see that it is very important to preserve the academic sphere where there is disinterested research we can trust. Otherwise, we have no idea if the drugs we put in our bodies are safe for us or not.

CW: Many of our readers are international. Can you talk the global impact of the corruption in American higher education?

JW: Yes, absolutely. This has been a huge issue with regards to intellectual property. In the past, it was very important that knowledge developed in the first world was usable by third world countries. Many professors worked on third world diseases that are actually very prevalent, but most drug companies have no interest in funding that research because the people who receive the medicines don’t have money to pay for expensive drugs. That would certainly not go on if universities were simply driven by more commercial, market-oriented research.

There is some very interesting developments with regards to intellectual property and AIDS drugs. For instance, Yale University exclusively licensed publicly funded research that developed the AIDS drug, D4T, to Bristol-Myers. Later, students at Yale, together with Doctors Without Borders, tried to expose the fact that the university was actually profiting off of this patent, while the drug was too expensive for the vast majority of people who suffer from AIDS throughout Africa and the world. If universities were more focused on protecting the public domain and insuring broad access to their research, this would not have happened.

CW: In your book, you talk about potential solutions. Can you go into some of them here?

JW: People who are on these college campuses must look into where industry money is playing a big role. Increasingly, universities are signing contracts that allow industry to dictate the terms of the research in ways that violate academic freedom. The only ways those contracts can become public is if someone starts to raise questions and insists on openness. A lot of these contracts are considered proprietary, and even public universities are reluctant to make them available. At U.C. Berkeley, it was very important that professors and students insisted on making the contract with Novartis open so that people could see the terms of the contract. Public exposure is critical.

The public also has a responsibility. Part of the reason these institutions are becoming more dependent on industry funding is because of cutbacks in public support for higher education. It is critical that we realize that our taxpayer dollars are what keep these institutions public in nature. People frown on any increase in taxes, but if we do not have the tax base to support these institutions then, in some sense, we are forcing them to go into the arms of industry. I think we have broader questions that we need to ask.

Do we want our higher education system to remain a public good? If so, are we willing to support it as such?

CW: In your book you talk about various student groups that played a role in raising awareness around these issues…

JW: Yes, [it was] students who exposed the fact that Yale was profiting off of the D4T drug, while people in Africa did not have access to this drug. The professor who invented D4T was so upset to learn that his invention was not being made broadly available, that he actually wound up siding with the students and that humiliated Yale University.

Essentially, it became such an embarrassment that Bristol-Myers caved in and substantially lowered prices for these drugs in the developing world. Students have enormous power because a lot of the activities that universities are involved in fundamentally go against their educational research mission. These institutions depend on public support and they do not like to look like they are profiteering or self-interested. If students can point that out, it’s a strong leverage point. And just being students at the campus, they are in a very unique position to expose problems.

CW: Is there anything else you want to say about moving forward?

JW: Well, I do have a lot of suggestions in the book. We need stricter conflict-of-interest rules from the federal government. We need to get patenting, licensing and commercial activity out of the university and we should go back to the model that I spoke about earlier, at MIT, where an independent, third-party would handle all the commercial activities to get that profit motive out of the heart of the university.


Want more? Read an excerpt of University, Inc. from the American Prospect Online Edition.