Deborah Woo
Community Studies
University of California Santa Cruz
Abstract:
This paper addresses
threats to the public interest in a period where economic globalization has
promoted increasing university, industry, and government collaborations. A
significant focus of these partnerships has been industry-supported research
that purports to serve the public interest but instead creates conflicts of
interest for both universities and government. The implications are drawn
especially for academic researchers with entrepreneurial pursuits. In addition,
specific examples are given of how existing regulatory mechanisms have been
inadequate with respect to preventing the intrusion of corporate profit-making
over the public welfare. In the context of national and state budgetary
shortfalls, it will become that much more attractive for institutions to seek
commercial support to realize public interest goals. For this reason, the
impact of commercially funded activities deserves much more public policy
attention.
Introduction:
Economic
globalization is not new; nor are corporate partnerships with governments or
universities. However, the geometrically
increasing speed of technology transfer has added new dimensions to corporate
relations light years from the time when the English and Dutch governments
granted charters to their merchant companies in the fifteenth and sixteenth
centuries. High technology has
dramatically shortened the time from discovery to practical use in fields as
diverse as microelectronics, telecommunications, biotechnology, and information
technology. The concept of “intellectual property,” in turn, has altered the
relationship between academic researchers and both government and industry.
This interdependency is not merely symbiotic but a matter of survival for all
parties involved. Since World War II, the costs of doing basic research have
become so great that the federal government has played a key role in both
industry and university research. While
at one time it was even considered “improper if not unconstitutional” for
private universities to receive government grants (Price, 1969: 76), key arenas
of scientific research can now only proceed largely with such funding. The instability of government funding, in
turn, has made corporate funding indispensable to university research. Corporations, for their part, stand to benefit
from both the prestige and cost-savings gained from having their research
objectives met in university settings -- and could not conduct their research
otherwise.
In
many rapidly developing areas of technology, research breakthroughs are so
broadly distributed across both disciplines and institutions that no single
firm has all the necessary capabilities to keep pace…Consequently, in such
fields as advanced television systems, biotechnology, computers, optics, and
semiconductors, firms are turning to cooperation with former competitors, and
to partnerships with universities and government institutes (Powell and Smith,
1998: 173)
How
well does this interdependency and division of labor serve the public interest?
On the one hand, this interdependency has further blurred the distinction
between basic and applied research that once distinguished academic from
business research. By the early 1980s, the distinction was variously described
as elitist, “outdated and pernicious” (Bearn, 1981: 82-83), or else “fanciful”
and irrelevant to protecting science from external control (Noble, 1982:
148). While there are good reasons for
abandoning the distinction, there is evidence that where industry has sought
short-cuts to market, this has entailed circumventing basic research. Part of this paper, for example, discusses
how pharmaceutical industries have sought to identify new uses for existing
drugs. The objections to such research practice lie in the fact that basic
research questions are bypassed by efforts to apply a “drug solution” to a
particular problem for which that drug was not originally developed.
The
lure of commercialized research is more apparent than the risks to the public
interest. In 2001, 149 universities reported collecting $827 million from
payments derived from licenses on inventions, the top three earners being Columbia
University, MIT, and the University of California system (Blumenstyk,
2003). Private corporations have become
a major voice in those collaborations where government-university-industry
relations (GUIRs) are the primary conduit for private contracts: “although the
government usually supplies the greatest share of the money, corporations
usually have the most powerful voice in defining the project and universities
often contribute most of the knowledge or expertise, sometimes contributing
money as well” (Slaughter and Leslie, 2002: 152). If this is true, then such
alliances pose a significant risk to the public interest.
Entrepreneurial
ventures may be an important means for generating university revenue, but still
wanting are systematic checks to ensure that business pressures do not
interfere with the normal scientific research process, whether it is the
cumulative development of theoretical knowledge or the ethical responsibilities
of disclosure. The Nancy Oliveri case is
discussed to illustrate the clash between a university researcher’s fundamental
loyalty to her patients and the confidentiality clauses routinely written into
university-industry contracts. While the case is unique in the publicity it
received, it represents the tip of the iceberg, where researchers have
otherwise been cowered or muzzled by the threat of lawsuits into suppressing
findings unfavorable to a company’s product.
At
least regarding the most public face of their relationship, GUIRs relations
have been framed by their mutuality (as “partners”) rather than by implicit conflicts
of interest. However, where conflicts of
interest surface, they clearly show how the public interest is at stake, and
where oversight is needed. Concerns surrounding corporate lobbying have
prompted explicit moves (e.g., campaign finance reform) to address the fact
that much public policy gets determined by corporate interests in the context
of closed-door discussions rather than by public debate. The latter part of
this paper focuses on the National Science Foundation (NSF), for many years the
premier guardian and sponsor of scientific research, especially in the science
and engineering fields. By the 1990s, however, it would meet scandal when its
own internal research, unduly influenced by the industry perspective, led to
ill-advised government immigration policies involving increases in temporary
visas for scientists and other knowledge workers. Because this policy created a
glut that led to massive unemployment, the case would prompt Congressional oversight
into possible conflicts of interest.
There
is a growing body of evidence that the relationship of government and
universities to the public has been negatively altered by their relationship to
industry and by corporate values. What are some of the risks to the public as
revealed by this larger social perspective?
Corporate Juggernauts:
While
chartered merchant ships of the 15th and 16th century
exercised sovereign powers in the name of the crown, their modern-day
counterparts would successfully maneuver for greater freedom and protection
from government. By 1973
the most successful corporations were growing at an average rate that was “two
to three times that of most advanced industrial countries, including the United
States” (Barnet and Muller, 1974: 15).
Of the world’s 100 largest economies, 52 are corporations (Mander,
Barker and Korten, 2001). Overshadowing governments as shapers of public
policy, transnational corporations view political structures such as the nation
state as unnecessary obstacles to their efforts to centralize operations in a
“rationally integrated” world economy.
Academic
opinion on whether
economic globalization is in the public interest ranges from qualified optimism
to ambivalence to undiluted criticism (Friedman, 1999; Korten, 2001; Stiglitz,
2002; Cavanagh and Mander, 2002; Hartmann, 2002). What is clear is that public
trust has eroded as corporations increasingly became big business, accountable
more to shareholders than to the public.
An
1886 Supreme Court case (Santa Clara County v. Southern Pacific Railroad) marked
a major reconfiguration of power by paving the way for corporations to gain unprecedented
status as “persons.” Previously treated as a legal fiction or as artificial
entities, they had been strictly regulated by state legislatures as bodies
accountable to citizens (Hartmann, 2002: 74-77; Grossman and Adams, 1993). Once corporate personhood was assumed,
however, the door was open to their claiming protection under the Bill of
Rights.[1] By successfully claiming First Amendment
rights to free speech, corporations were empowered to lobby politicians. Fourth
Amendment rights to privacy enabled them to close their records or facilities
to government inspection. Fourteenth
Amendment protection against discrimination enabled a chain store to challenge paying
a higher business license fee than that paid by local stores. (Hartmann, 2002:
120-121). The implications continue to be far-reaching. In the California
Supreme Court case of Nike v. Kasky,
the sports apparel giant recently responded to charges of false advertising and
unfair competition by claiming free speech protections. Having misinformed the
public and select customers that workers in its overseas factories were paid
the minimum wage and received free health care, Nike then sought exemption from
accountability on the grounds that these statements did not appear in paid ads
and that the labor practices themselves were publicly controversial (Van
Bergen, 2003; Peterson, 2003). If granted the First Amendment license to
misrepresent, corporations could effectively lie to the public on the grounds
that their practices had become publicly “controversial.”
Government’s power as federal regulator in the public
interest has been whittled down as corporations buy control or assert certain constitutional
rights (Hartman, 2000; Korten, 2001; Frontline, 1992). The institution that has historically spoken
against corporate power and acted as the conscience of society --- the media –
has had its own credibility and independence vitiated as their financial ties
to corporations have increased (McChesny, Nichols, and Chomsky, 2002). For universities, too, these ties have
erected barriers to free speech.
The
intrusion of industry interests into the core mission of the university is not
new. However, the possibilities for open
and uncensored discourse were significantly altered as university-industry
partnerships were taken to a new level by legal developments in the 1980s. These included the Bayh-Dole Act, which facilitated
the commercialization of university research, the Stevenson-Wydler Act, which
opened up research at government-operated labs to industry, and the Cooperative
Research Act, which enable university-industry collaborations to sidestep the
risk of antitrust litigation (Powell and Smith, 1998: 171-172).
In
general, these changes are the ripple effects of more global changes. The small
businesses that represented Adam Smith’s competitive ideal still exist but they
are eclipsed by the corporate juggernauts of today, whose huge capital
investments and global presence have fundamentally altered the nature of
competition. While some might argue that competition
envelops even the largest companies in certain industries (e.g.,
telecommunications, computer software, airlines, steel, and automobiles), it is
anything but a level playing field. For
one, the advantage of sheer size and concentration of power mitigate against
competition, allowing a few companies (and countries) to dominate an industry
(e.g., AT&T, Microsoft, United Airlines, U.S. Steel, General Motors). Speaking to this very issue of economic
concentration,
Richard Barnet and Ronald Muller (1974: 229) stated: “the power accumulated by
giant oligopolies by the late 1950’s to control supplies, set prices, and
create demand had made an anachronism of the classic concept of the market even
before Big Business became global. But globalization completed the
process.” The ability of large firms to
buy out other firms removes these competitors, and the pace of acquisition and
mergers has accelerated with globalization (Barnet and Muller, 1974: 229-232).
Second, large companies have frequently sought government bailouts (e.g.,
Chrysler, United Airlines) and other protections generally less available to small
businesses. The U.S. steel industry, for example, has sought to extend existing
tariffs, even though critics have argued this rewards inefficiency and
noncompetitiveness, and is in violation of international trade rules (Knight
Ridder/Tribune Business News, 2003a, 2003b; European Union, 2002).
Multinational corporations have a poor
record with respect to public interest issues such as sustainable environments,
public health and safety, democracy, civil rights and human rights, and social
equality, there being nothing in international trade law to protect the
public interest (Mander and Goldsmith, 1996; Nader
and Wallach, 1996). Furthermore, measures of material progress,
such as Gross Domestic Product (GDP), perversely convert social costs into
income.[2] Thus,
because car crashes, family breakdown, divorces, and prison construction
involve lawyer bills and spur the growth of certain industries, they are
treated as “economic gains” not as unfortunate human and social costs (Halstead
and Cobb, 1996: 200-202). More subjective measures indicate that quality
of life and psychological well-being as well are adversely affected by
commercialization (Kasser and Kanner, 2003). Disparities in
wealth, moreover, are increasing. In
1998, the top one percent of U.S. households owned 38 percent of all wealth;
with the level of inequality in 2003 double that of the mid-1970s (Multinational Monitor, May 2003). The
two hundred richest corporations in the world, moreover, have double the assets
of the poorest 80 percent of the world’s population (Hawken, 2000). Jeff Gates, founder and president of the
nonprofit Shared Capitalism Institute, questions the very goal of growth and
material prosperity without regard to how that wealth is distributed. The value
of Bill Gates, Jr’s projected individual wealth is staggering in and of itself
but also because our cultural values have sanctioned such accumulation without
regard to public interest values.
What’s
the point of prosperity in a democracy? Is it a success no matter who reaps its
benefits? Apparently so. If the value of
the Microsoft stock owned by Bill Gates continues to grow at the same torrid
pace as it has since Microsoft’s 1986 initial public offering (58.2% a year),
he will become a trillionaire ($1000 billion) in March 2005, at the age of
forty-nine, and his Microsoft holdings will be valued at $1 quadrillion (that’s
a million billion) in March 2020, when he turns sixty-four.
Or is prosperity an opportunity for
widespread economic advance and social accomplishment? Apparently not. Today’s
rules are clear: Making the already-rich endlessly richer is now the best use
to which our expanding prosperity can be put. That’s what today’s policymakers
have concluded. How much is a million billion?
The 1998 gross world product was just $39,000 billion (less than 4
percent of a million billion). In May 1997, the journal Nature concluded that the planet’s ecosystems provide a range of
environmental and resource services worth $33,000 billion each year. If that
amount were capitalized using the interest rate paid on U.S. treasuries, that
puts the value of all creation at about $500,000 billion, one-half Bill Gate’s
projected net worth in 2020. (Gates,
2000: 21)
Private corporations justify their profit by
their philanthropic gestures
and by their alleged efficiency, rationality, and economy. Bill Gates,
Jr.’s six billion dollar donation towards drugs for AIDs patients presumed to
accomplish all these ends. There is
pathos, irony, and public appearance windfall from this gesture. Gates’ donation will save only a fraction of
the over 25 million South Africans infected with the virus, but he stands to
benefit enormously from a World Trade Organization (WTO) rule that erects trade
barriers that will prohibit AIDs patients getting the cheaper drugs they
need. The reason is TRIPS (Trade-Related Intellectual Property
Rights), which bars countries from buying cheaper medicine from other sources
because this would mean buying or selling outside zones carved out by brand
names (Palast, 2003a, 2003b).
Commercialization of
Academic Research
In the
U.S., the Reagan policies of the 1980s began a process of radically realigning
government in the service of big business. Despite free market rhetoric, large
corporations effectively became the beneficiary of
subsidies, entitlements, protective legislation, and other business friendly
tariff or immigration policies. These
policies have facilitated sales operations overseas and provided cheap domestic
labor for high technology needs in the U.S. (Cornelius, Espenshade, and
Salehyan, 2001).
Government
and higher education officials, persuaded of the greater “efficiencies” to be
gained through privatization, have outsourced many services they formerly
provided for themselves. Oddly, for the past five years, there has been a
precipitous decline in information and accountability, as far as how much the
federal government spends on private service contractors (Multinational Monitor, June 2003). Meanwhile, an emerging
literature has developed, documenting the rise of the corporate university
(Slaughter and Leslie, 1997; White, 2000; Johnson et al, 2003). The
effect of downsizing on the University of Pennsylvania from 1994 to 1998
was to create enormous pressures for this nonprofit academic institution to
operate as a business, an effect so devastating that it was dubbed by one
critical analyst as “the neutron bomb theory of excellence” (Ruben, 2000). In
much the same vein, Massachusetts governor Mitt Romney has proposed a major
reorganization of the state’s public higher education, including the University
of Massachusetts’ five campuses. While some, like UMass Boston’s Chancellor Jo
Ann Gora, have argued that the dismantling would not alter the basic mission of
the research institution, others have resisted the overhaul, precisely because
they represent moves to run the university like a corporation (Hayward, 2003;
Travato, 2003). Such developments have
radically altered the political economy of universities not only in the United
States but elsewhere. The North American
Free Trade Agreement (NAFTA) has enabled American transnational companies to
penetrate and commercialize education in Canada. For example, NAFTA conferred
upon these companies national treatment
rights, which means that the Canadian government cannot give preference to
domestic companies even if a Canadian perspective was considered vital. Bids for educational services must be
open to competing firms from the entire continent. Thus, when the government of British Columbia
needed to prepare its twelfth-grade provincial examinations, it decided to
contract this out to a foreign provider. The Department of
Education cannot return this function to the public sphere on the grounds that
cultural issues would be better served by local firms. To do so before the
expiration of the contract would require financial compensation to the company
involved. Moreover, once the contract expires, it would once again have to be
opened to firms competing from non-Canadian companies. Other kinds of school
support services that are presently affected include food services, school-bus
transportation, computer services, building maintenance, cleaning, and
consulting (Barlow and Robertson, 1996: 63-64).
Historically in the United States, the
federal government has played a major role in the growth of universities, first
through the conferral of land grants and then through the funding of
research. The American university that
was taking its earliest shape at the end of the eighteenth century was a
private institution with a primarily religious mission (training students for
public service) and a faculty composed almost entirely of the clergy. As the
federal government began donating public lands to states to develop secular and
public degree-granting institutions, universities would continue to pursue
their primary mission of educating students but would also begin to serve the
public interest through conducting vanguard research, which in the nineteenth
century meant agricultural and mining interests (e.g., the various state A&
M colleges that emerged across the Southwest).
In both religious and secular instances, a strong humanistic tradition
developed, promoting the free exchange of ideas, critical thinking, and service
or research on behalf of the society at large. This was true, even though this tradition was
often contested, sometimes undernourished and besieged, and in
the last
half of the twentieth century witnessed notable erosion (Brubacher
and Rudy, 1958). Though a chartered corporation, with a history
of its own internal sources of ideological repression, the university would continue to fulfill a
crucial and unique function as a center of independent inquiry and public
service, with free speech as the lifeblood of intellectual exchange.
A
dramatic turning point in the history of American universities occurred in 1980
with the passage of
the Bayh-Dole Act. The brainchild of corporate CEOs, backed by a select group
of university administrators without faculty consultation, it would give
private companies easy access to publicly funded research. Specifically, Bayh-Dole granted universities
title to inventions developed from federally funded grants, whereas previously
these inventions belonged to the public. Up until then, universities
had been agents of the government, representing the interests of the public
whose tax dollars paid for their research. Once designated owners of this research,
the universities became less beholden to the public as their faculty became
oriented towards selling their discoveries to corporations. One effect has been to increasingly divert
scientific attention away from basic research towards short-term marketable
products, without considering the long-term public interest. Second,
as academic discoveries thus became transformed into
“intellectual property,” corporations, in turn, leapt at the
chance to obtain the exclusive license to manufacture. A sharp growth in university patenting can be
traced directly to Bayh-Dole (Powell and Smith, 1998: 176; Press and Washburn, 2000:
41). Previously
such licenses were sold only on a non-exclusive basis, enabling greater market
competition, thereby protecting the public from monopolistic pricing. A third
effect of Bayh-Dole was to introduce a culture of secrecy and confidentiality
aimed at protecting proprietary craft knowledge, and to raise the specter of
possible conflict of interest as faculty became increasingly involved in
commercial ventures, including the launching their own companies. Problems
presently facing higher education are to varying degrees discernible as
connected to this singular change in the incentive structure of universities.
The
problems of higher education – the fraud, the tuition increases, the falsified
research, the transformation of teachers into workers, the scramble to steal
intellectual property by administrators from faculty and students, and by
colleagues from one another – are all new problems….
Bayh-Dole
leads to the displacement and subordination of the humanistic tradition and
collegial society integral to the university, and will never be identified as
the source of the problem. The public knows very little about it and the
university community most affected was – carefully – not consulted. To this
day, the public knows little about the act or its effects, and most faculty
have never heard of it. (Minsky, 2000: 97-98).
In exchange for the passage of the Bayh-Dole
Act, industry assured government that it would protect American jobs from
foreign competition, once it gained the “competitive edge” in the global market
(Minsky, 2000). It was this promise,
along with lobbying by university presidents, which won over then President
Jimmy Carter. The U.S. economy at the time had been declining, and American
corporations were faring poorly against their German and Japanese
counterparts. According to one interpretation, American business had refused to
plough their profits back into basic research, as was the norm (Minsky,
2000). According to others, it was
global rivals that allegedly did little of the internal research but were
“quick to exploit the developments of others” (Powell and Smith, 1998: 173). In
either case, the legislative maneuver now enabled industry to benefit from an
academic research infrastructure already in place, paying only a fraction of
what it actually cost to conduct the research (Minksy, 2000: 99). Big business
failed, however, to live up to its promise to protect American jobs. As
we shall see in the latter half of this paper, the National
Science Foundation (NSF) would help support an industry agenda that brought
access to cheap, highly skilled immigrant labor at the expense of American
jobs. That it did so by suppressing
respectable research serves as yet another example of how commercialization
undercuts academic integrity.
Industry Research: “New
Uses” for Existing Drugs:
The distinction between basic and applied
research fades as commercialization blurs the traditional division of labor
between academia and industry. The loss of this distinction in drug research
sharply illustrates how, in their rush to market, drug companies have
increasingly bypassed basic research focused on finding cures and shifted their
attention towards marketing existing drugs for new uses. These new uses are
presented as “therapeutic breakthroughs,” which presumably warrant the
exorbitant costs patients must pay.
Federal Drug Administration (FDA)
approval for a new use or “indication” takes less than 18 months, as
opposed to eight years to bring a drug from lab to pharmacy. The selective
serotonin reuptake inhibitors (SSRIs) are a case in point. This family of pharmaceuticals, which
includes Paxil, Prozac, Zoloft, Celexa, and Luvox, were originally approved
simply and solely for use as antidepressants.
Brendan Koerner (2002) explains how SmithKline Beecham was able to
increase Paxil’s market share, when in
1993 Paxil lagged behind its competitors
-- Prozac (an Eli Lilly product) and Zoloft (owned by Pfizer). SmithKline subsequently found two disorders
in the Diagnostic Statistical Manual of
Mental Disorders (DSM) for which Paxil might be prescribed, namely, “social
anxiety disorder” and “generalized anxiety disorder.” It would not be long before Pfizer, in turn,
would seek a new use for Zoloft, specifically as a medication for
“posttraumatic stress disorder.” Although DSM entries are shaped by social and
cultural norms, and the politics surrounding them (e.g., homosexuality was
diagnosed as a mental disorder up until 1973), the DSM notation is considered
sufficient proof by the FDA that a disease actually exists, and in-house
corporate studies are basically unquestioned, even when companies fail to make
their data or methodologies available to other members of the scientific
community, as would be essential for professional academic acceptance.
In August 2002, escitalopram became the
sixth member of the SSRI family. Its birth came about as a result of another
kind of pharmaceutical marketing and development strategy. The strategy is not to find new uses for an
old drug but to push an old drug as if it were new. Drug companies do this by manipulating a
chemical molecule known as an isomer and then selling what amounts to a
chemical mirror image of the original drug.
…an isomer…is, chemically speaking, a molecule containing identical
atoms to another molecule, but differently arranged: a mirror image, to be
precise. Consider two isomers of a certain molecule to be like a pair of gloves
– same number of fingers, just arranged differently.
….Separating these mirror images and
selling only a single mirror image as a “new “ drug is a successful business
scheme, not a strategy to improve
public health. This may be likened to selling one glove and claiming that it is
as good as or better than two. (Public Citizen Health Research Group, March
2003: 2)
The Public Citizen Health Research Group
(2003: 4) advised against the use of this drug until 2005: “for practical
purposes it is the same drug as citalopram and it has no therapeutic or safety
advantage over citalopram or other SSRI antidepressants.”
Because
corporations have become primary funders of biomedical research, their impact
on public health is enormous. Yet their obligations to the public have not
matched their rhetoric of public service. Not surprisingly, corporations have sought to disguise their
influence when their public image is tarnished. Performing its own form of
“smoke and mirrors,” tobacco manufacturer Philip Morris renamed itself Altria
in order to portray itself as an objective source of information about the
dangers of smoking. The company has
unashamedly continued to promote the industry’s interests in minority
communities and developing countries (Public Citizen Health Research Group,
2003; Schapiro, 2002). Moreover, in
March of 2003, it was ordered by an Illinois judge to pay $10.1 billion in the
first consumer fraud class-action lawsuit involving “light” cigarettes to go to
trial: the company was found guilty of intentionally deceiving smokers into
believing that “light” cigarettes were less dangerous than regular cigarettes
(Price v. Philip Morris Incorporated, March 21, 2003). Philip Morris is
currently asking the Illinois Supreme Court to prevent the plaintiffs from
enforcing the $10.1 billion judgment (Altria Group, Inc. July 18, 2003)
The funding of proprietary research has
led the push to subordinate academic science to
corporate values and agendas. With Bayh-Dole, knowledge within
the university was no longer common property but intellectual property.
Scholars were discouraged from sharing their findings with their colleagues,
and could no longer be completely trusted as the purveyor of disinterested
knowledge, especially when their research findings threatened corporate
profits. To dispel the appearances of ethical impropriety, university
administrators have called for disclosure, but this is limited to private
disclosure within the university (e.g., reporting to some supervisory authority
or administrative head), not public disclosure.
….the issue of what is a conflict can get
murky….so many university scientists have started their own companies that
deans of medical schools no longer talk about eliminating conflict of interest;
the current buzzword for dealing with conflicts is “management.” The primary
management tool, university officials say, is disclosure. But that means disclosure to supervisors –
not to the public. (Stolberg, 2000).
Oliveri: Academic Freedom Bloodied
As the incentive structure within the
university shifted towards the market, it altered the academic culture,
creating conflicts
of interest particularly for medical schools and research centers with ties to
pharmaceutical companies. In general, scientists are strongly
motivated to publish their results and to do so quickly in order to be credited
with their contributions to scientific knowledge. At issue in the case of Nancy
Oliveri, A University of Toronto clinical researcher, was whether she could
promptly release her results not to
this group of scientific peers but rather to (a) investigators administering
the same experimental drug at collaborating research centers as well as to
appropriate regulators and (b) patients being exposed to newly discovered risks
in these clinical trials. Certain
contractual constraints with her corporate sponsor, however, impeded her
ability to exercise this academic freedom.
Beginning in the early 1990’s, the
University of Toronto had discussed the possibility of a multimillion dollar
donation from Apotex pharmaceuticals to build a biomedical research center. The
Oliveri controversy eventually led to suspension of such discussions.
Dr. Oliveri attracted public attention in
mid-August 1998 when it was learned Apotex had tried to suppress adverse
findings uncovered in the course of the clinical trial conducted under a grant
secured by her co-investigator, Dr.Gideon Koren. Two unexpected medical risks would be
discovered in connection with the randomized trial of an experimental
iron-chelation drug that seemed to be a promising alternative to a more onerous
but standard drug administered to transfusion dependent patients. Oliveri’s
patients suffered from a genetic disorder, thalassemia, which required regular
blood transfusions. The transfusions themselves brought an increased risk of
long-term damage to bodily organs from too much iron in the blood, something iron-chelation
drugs seek to offset. The experimental
drug aimed at countering this problem, however, were discovered to have two
main side effects: the loss of sustained efficacy and an increased risk of
liver fibrosis.
Oliveri’s 1993 contract with Apotex had a
one-year, post termination confidentiality clause. Her 1995 contract with
Apotex had no confidentiality clause though the pharmaceutical manufacturer
reserved the right to terminate the trial at any time. It did so abruptly and
stopped supplying the drug -- but without notice to patients, who were left in
an uncertain situation – issuing legal warnings to Oliveri for which there was
no contractual basis. Obligated by the requirements of informed consent,
Oliveri sought to exercise her academic freedom to counsel her patients and
publish the adverse findings. By
contrast, Dr. Koren sided with their corporate sponsor by publishing an article
that testified to the drug’s efficacy. No mention was made of Apotex funding
nor Oliveri’s opposing findings. Details
regarding the dispute are documented extensively by a committee which
investigated the case over two years (Thompson, Baird, and Downie, 2002).
Neither the University of Toronto nor the
Hospital for Sick Children, the affiliated teaching hospital where Oliveri
conducted her clinical trial, supported her on the issue of academic freedom
and protection of the public interest.
The Hospital, to the contrary, took active steps to remove her from the
program directorship and to disrupt and discredit her work. The only legal support forthcoming came from
the Canadian Medical Protective Association, which was primarily mandated to
reduce her legal risks as an individual client rather than to protect the
larger public or societal interests.
The case, in short, pointed to a
systemwide problem where those directly or indirectly involved were unable to
resolve the conflicts of interest raised by corporate sponsorship. A major
lesson from this case is that confidentiality clauses for clinical trials are
inappropriate. Oliveri had signed different contracts with Apotex: she should
have refused to sign, without modification, those contracts which contained
post-termination confidentiality clauses, one of which was a three-year,
post-termination confidentiality clause inconsistent with University of Toronto
policy (Thompson, Baird, and Downie, 2002: 25).
The Hospital’s Research Ethics Board, for its part, approved these
contracts without ensuring that there were provisions to protect trial
participants in the event of premature termination of the research. In short, policies and procedures needed to
be in place at every level (investigator, research ethics boards, universities,
hospitals, regulators, federal and provincial governments, industry) to ensure
that contractual agreements related to communication and disclosure did not
have clauses or protocols to restrict communication. The committee report concluded with a series
of recommendations outlining a structure of accountability whereby various
stakeholders party to a company-sponsored relationship would each have some
individual or institutional role in the oversight process, specifically to
ensure that contracts did not require secrecy.
In a parallel move to ensure data access
and publication among researchers involved in multicenter studies, a group of
Duke University researchers reviewed U.S. medical schools for their compliance
with guidelines laid out for academic-industry partnerships and developed by
the 2001 International Committee of Medical Journal Editors (ICMJE). The results of this evaluation study were
“dismal”: there was little if any compliance; researchers had severely
restricted access to data, and the requirement to publish their data were often
nonexistent.
To put it mildly, the
results were dismal….The universities reported that a median of 1 percent of
their studies had provisions for such access. In one study that was not a focus
of the report, even the principal investigator did not have unfettered access
to the data, forcing him to publish a paper with only 90 percent of the data.
The agreements were often lacking
other crucial elements. Only a median of 5 percent of studies addressed plans
for data analysis and interpretation, opening the doors to industry mischief in
the forms of data massaging or the reaching of conclusions with an eye on
marketing rather than science. Extraordinarily, a median of 0 percent of study
contracts required the data to be published. (The Public Citizen Health
Research Group, 2003: 11-12).
A median of 0 is technically not the
typical statistical median, which designates the midpoint. As The Public
Citizen Health Research Group (PCHRG) noted, this was “extraordinary,” yet
another measure of the dismally low rate at which study data were made
available. Like the Oliveri Committee,
the PCHRG offered several recommendations to ensure publication and disclosure
of data. These included (1) the development of a standard contract by the
Association of American Medical Colleges, (2) accreditation denial to those
universities failing to develop such a contract, (3) denial of National
Institute of Health (NIH) funding to those failing to implement a contract, (4)
publication refusal by medical journals unless authors have met all ICMJE
guidelines, and (5) further studies by ICMJE to determine the extent of
compliance.
A
recent report offering an overview of the state of medical research ethics
confirmed these observations – that academic researchers cannot meet their
scientific or ethic responsibilities largely because the guidelines in place to
prevent conflicts of interest with corporate sponsors are “written vaguely and
enforced half-heartedly” (Mangan, 2003).
Infiltration
of the National Science Foundation:
The
National Science Foundation has been a putatively objective, neutral evaluator
of research, historically providing federal support to academic institutions for basic research. Since the 1980’s, it has been a chief
architect of the research arrangements involving government, university, and
industry relations (GUIRs). According to Stephen Stigler (Cited in Power and
Smith,1998: 172), the NSF presumably found it “easier to explain large-scale
projects and research centers to Congress than to argue convincingly for the
diffuse benefits of a broad-based funding of individual projects…” NSF-sponsored
centers would eventually require an industry component and a review process
involving corporate participation in the evaluation of a proposal’s merits.
In
1992, NSF was found to be engaged in partisan research that promoted industry
interests. Not only was this research
tainted with bias and flawed methodology, but the effect of policies issuing
forth from it was to create a market glut of workers, which benefited
employers. Although industry was a major
beneficiary, it was not alone. The
resulting scandal involved a wider network of stakeholders that included
government and universities.
Relevant to the discussion here is how these interests were accommodated and
furthered by NSF under former director Erich Bloch.
Eric Weinstein (n.d.) reports that
beginning as early as 1975-76 and continuing from 1986-1990, employers in
government, industry, and universities engaged in discussions that would lead
to policy depressing the wages of scientists, engineers, programmers, and
information workers. Industry claimed
that higher education was not producing a sufficient number of graduates in
these fields, projecting the specter of a labor shortage that would slow
economic growth. Genuinely alarmed
members of Congress responded to this desperate call for assistance by passing
the Immigration Act of 1990. The Act, among other things, greatly simplified
the process by which employers could hire foreign workers. The effect was to
flood the labor market.
In
the ideal free market situation, employers typically respond to labor shortages
by increasing salaries and other terms of employment so as to attract the
necessary talent, thereby honoring a basic relationship between the law of
supply and demand. Neither government, industry, nor higher
education, however, saw it in their interest to compete with one another in a
tight labor market. Their shared
interests were explored through a Government University Industry Roundtable
convened and headed by NSF Director Bloch.
Working scientists were never consulted, although the final policy
outcome would adversely affect the careers of students and workers, domestic
and foreign. Under the directorship of Peter
House, the Policy Research and Analysis (PRA) division within NSF would
generate an in-house study supporting industry’s claim of imminent labor
shortages. Based on “supply-side”
economics, the PRA study predicted that between 1986 and 2011, there would be a
shortage of almost 700,000 bachelor degrees in science and engineering
(S&E). The scarcity study, however,
was contradicted by an internal NSF statistical analysis that did not foresee
such a shortage. As Joel
L. Barries, who supervised this report, testifies, the PRA and its director,
Peter House, moved to actively suppress this competing evidence.
"...after PRA began
doing its modeling work, our work [that of the SRS statistical subdivision] was
scaled back, and PRA began to interfere in the text of the section on the
science and engineering workforce in Science & Engineering Indicators
and other SRS work through the review process. It was at this same time that
former NSF director Erich Bloch was trying to get Congress to appropriate money
to revitalize science education programs.
It worked as follows: SRS
publication underwent "anonymous" review by the Scientific,
Technological and International Affairs Directorate (STIA) of which both it and
PRA were a part. However, this "anonymous" review was usually done by
PRA. After beginning the scarcity studies, PRA and Dr. House began to force
changes in Science & Engineering Indicators that weakened our conclusions,
based on past history and likely projected supply/demand scenarios that the
labor market would adjust to any spot shortages in personnel.
For example, in 1989 I
supervised the preparation of a report entitled "National Overview of
Scientific and Technical Personnel," which had a new section on the
projections based on the SRS model. The report did not project any significant
personnel shortages. Mysteriously, it was held up for a year in STIA's
"anonymous" review process. Finally, William Stewart, then SRS
director, arranged a meeting with Peter House to see what the problem was. At
that meeting, Dr. House said the problem was that the report did not support
the director's position that there would be serious personnel shortages in the
1990s."
Statement of Joel L. Barries, Hearing
Before The Subcommittee on Investigations and Oversight of the Committee on
Science, Space, and Technology, U.S. House of Representatives, One Hundred
Second Congress, April 8, 1992, pg. 404-405 (cited in Weinstein, n.d.,
p. 21)
Even if the more pessimistic claims of a
shortage were substantiated, it did not follow that extraordinary corrective
measures were needed. As Weinstein points out, other PRA
analysts had in fact carefully analyzed the demand side of the equation as well
and explicitly stated that shortage could be offset if employers increased
wages or salaries at almost double the 1982 salary level. PRA director House, however, prevented the
publication of this report and circulated it only to select representatives. University
of California President Richard Atkinson was one of the few PRA outsiders to
receive a copy, and he too would reject the market solution as a corrective
measure: "Market
mechanisms will no doubt reduce projected shortfalls between supply and demand,
but they will be slow in coming and expensive. [P]rudence suggests, therefore,
that we pursue intervention strategies to increase the future supply of Ph.D.s
..." (Atkinson, 1990: 3).
It is
ironic that while anti-trust laws have prohibited business from forming
monopolies that interfere with the natural workings of wage and price dynamics,
NSF succeeded in obstructing this very dynamic.
During the 1992 Congressional oversight hearings investigating how NSF
predictions could have gone so awry, Representative Wolpe poignantly expressed
his disappointment in this highly respected and trusted scientific
establishment in his comments to Peter House, NSF’s chief policy analyst.
"Hundreds if not thousands, of
people believed that your study had something definitive to say about the
scientific and engineering needs of this country. Science education,
immigration policy in this country have been affected by the study and by the
number that was its product.
One has the sense that the goal was to create the impression of a crisis to
lend urgency to the effort to double the NSF budget; nothing inherently wrong
with such an activity. It happens, as some people have noted, on Capitol Hill
every day. Democrats and Republicans will selectively present any set of
numbers in a different way to make their case.
But the difference here is that everyone
up here is well aware of how that game is played. We look at each other's
numbers with a great deal of skepticism, and the media shares that skepticism
sometimes to a fault.
But no one expects the NSF to play that
game or to take a study that has been so severely criticized from so many
quarters and to pretend as if there is nothing wrong and to go forth with that
in advancing its own agenda.
The NSF is the nation's premiere
scientific agency. Everyone, including I think most of the media, accept as a
given that NSF's pronouncements are the result of good science, really analytic
kind of work.
This was not good science, this study
that you produced. It has been relentlessly criticized by labor market experts
both inside and outside the NSF. If you had performed this analysis for a
member of Congress privately as a private kind of action, initiative, you
wouldn't be here today.
But you work for the National Science
Foundation, and a different standard, I think, must apply as we deal with this
question."
Howard Wolpe to Peter House, Hearing Before The Subcommittee on
Investigations and Oversight of the Committee on Science, Space, and
Technology, U.S. House of Representatives, One Hundred Second Congress, April
8, 1992, pg. 556-558 (cited in Weinstein, n.d., pp. 21-22)
In
sum, Eric Weinstein’s research reveals how the mission of one of the country’s
premier publicly funded institutions was deflected by NSF staff research which
was both methodologically flawed and propelled by political biases sympathetic
to industry. The high-level secrecy not only betrayed the scientists it was
entrusted to support but other staff researchers who had little to do with the
misdirected study. The effect was twofold: (1) to give the nation’s major
employers the wherewithal to exploit lower salaries available through a global
labor market, and (2) to produce massive layoffs and double digit unemployment
derailing careers and other “forgotten stakeholders,” i.e., the families of
scientists and engineers.
In
January 2003, the Chronicle of Higher
Education reported that fewer and fewer U.S. students are seeking degrees
in science and engineering (Potter, 2003). While industry rhetoric has supported
educational initiatives that encourage students to enter math and science
careers, employers have been unwilling to retrain or raise wages and salaries
to draw more students into these fields (Weinstein, n.d.; Matloff, 2002).[3] The shortage claim that
originated
around natural scientists and engineers has also affected
knowledge workers in the information technology field, especially programmers.
As evident in subsequent layoffs, this claim too was a self-interested product
of industry myth-making. Computer science professor Norm Matloff thus
testified:
When the industry claims a shortage of programmers, what
they mean is a shortage of cheap programmers….The fact that the industry cries
of “shortage’” were nothing more than a political ploy was illustrated by the
fact that heavy layoffs in the industry began around January 2001, just two
months after the industry lobbyists were insisting to Congress that there was a
‘”desperate” shortage … (Matloff, 2002:
11)
The present recession has prompted
Congressional moves to recognize employer abuses of these foreign visas and to
consider eliminating them (Beauprez, 2003; Lochhead, 2003). Where NSF is concerned, The
National Academy of Public Administration is seeking to address key issues
revolving around the impact of NSF’s organizational structure and management
processes on research opportunities, including whether the recruitment of short-term
managers from academia poses a real or perceived conflict of interest. Yet as long as corporations exert their
influence through interlocking directorates, their formal and informal
influence will be felt in a number of high-level structures, university bodies
as well as government. Among the nation’s top universities, twenty-four out of
fifty of its presidents served on corporate boards; and CEOs are the largest
single group of university trustees (Kniffen, 2000). Not surprisingly, universities
have been strongly motivated to tow the industry line as a leverage for more
resources, from both government and industry (Matloff, 2002: 25-26).
Conclusion
An overarching thesis of this paper has been that
corporations have increasingly become more influential than other institutional
actors, especially in government or university partnerships of crucial
consequence for the public interest. This would not be a concern were market
values not so fundamentally at odds with public interest values. Nevertheless, a
major critic of the excessive corporate power, Thom Hartmann (2003: 23) states
that for-profit activities are not inherently in conflict with the public
interest: “Running a for-profit company that’s beneficial to humans and the
community is not just possible: it’s normal.
Entrepreneurs and small companies have historically been the engines that have
fueled the great majority of new jobs, new economic opportunity, and
innovation.” The problem, in other
words, has to do with an inordinate or singular focus on profits, combined with
lack of accountability, huge size and a personhood status that has enabled
industry giants to wedge their influence in ways that undermine the public
interest. Thus, for example, Executive
Order 13303 issued by President George W. Bush may now give U.S. oil companies
blanket immunity from criminal prosecution associated with the sale of Iraqi
oil even if it were proven that there were human rights abuses, bribery, false
advertising, environmental damage, or retaliation against whistle blowers. The
order apparently refers specifically to corporations as “persons”(Girion,
2003).
The context for corporate ascendancy is thus value-laden,
legal, and resource-related. All three of these issues must be directly
addressed if the public interest (as reflected in concerns for public
health, social equality, equal employment opportunities, for example) is to be
rescued and affirmed. This recommitment needs to be institutionalized and
supported with relevant bureaucratic measures, as the Oliveri case illustrated.
Furthermore, while resource dependency is responsible for much collaboration
with industry, and thus some of the unprecedented and undesirable changes
occurring in the nature of academic work (Slaughter and Leslie, 1997), new and
different kinds of collaborations should be encouraged and supported by the
government. For example, in a move to
counter the reluctance of drug companies to invest in academic medical
discoveries, Stanford University and the University of California campuses at
San Francisco and San Diego have entered into a consortium with SRI
International, a nonprofit research institute, to conduct more basic research
on drugs. If this move signals a trend, it would enable promising avenues to be
pursued, including research into rare diseases, otherwise neglected by
pharmaceuticals because they do not represent large markets (Pollack, 2003).
More
fundamentally, there needs to be a conscious effort to fund public causes and institutions over
private ones and simultaneously develop a better accounting of how these
respective ventures compare when addressing pressing social
problems. Despite moves towards privatization, we cannot simply assume, for
example, that private sector management practices will automatically be suited
for public administration (Brook, 2002), or that corporate taxcuts will devolve
into a public good (Orszag, 2001). Since nonprofits have tripled over the last
three decades, their special tax status further narrows the tax base upon which
government can draw (Weisbrod, 1998). As government funding dwindles, nonprofit
organizations have taken up the public interest in a wide-range of industries, e.g.,
nonprofit hospitals and universities. At the same time, they have been
increasingly forced to turn to commercial activities to finance their operating
costs. In their doing so, an emerging issue is the extent to which their
altruistic mission has been compromised. The larger question, however, is how
we as citizens wish to fund those activities deemed essential to the common
good. If public interest is not to be a residual category, it must have some
clear place of priority in our set of societal commitments, including if
necessary priority over private considerations.
It is still possible to envision a world where profit is no
longer a primary motivating factor but rather one subordinated to and in the
service of altruistic values and a sense of responsibility to community and
society. Faculty engaged in entrepreneurial
pursuits cannot automatically be assumed to have forsaken their public service
commitment. Instead, as some research has indicated, some have “elided altruism
and profit, viewing profit making as a means to serve their unit, do science,
and serve the common good” (Slaughter and Leslie, 1997: 179). About the increase in commercial activities
among other nonprofit (nonacademic) organizations, it has also been observed,
“if a nonprofit becomes more commercial in its pursuit of revenue, it does not
necessarily imply a forsaking of ‘core’ values or mission” (Weisbrod, 1998: 9).
What is so very necessary then is to discern the conditions under which this is
more or less likely to occur, and to encourage those activities which are
functioning optimally in this regard.
The same is true for corporations. Where comparative studies exist,
firms have variously measured met high standards with regard to consumer
satisfaction, employee-friendly standards, social responsibility, or some other
criterion, such as diversity in management.
This is partly indicative of subtle variations in core values (Peters,
1982, Federal Glass Ceiling Commission, 1995; Collins and Porras, 2002).
Globalization and corporate personhood, however, have joined to create a
corporate monster programmed to meet relentlessly certain bottom-line
imperatives (i.e., profit and returns), even when it includes outcomes beyond
the original intent of its human creators.
Although there are certain resemblances here to the robotic nightmare of
machines so complex and all-compassing that they cannot be intelligently
controlled by humans (Joy, 2000), a
citizenry which is informed of the nature of corporate encroachment is that
much more empowered to counter and rectify the unequal balance (Hartmann, 2000).
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