Medical Conflicts of Interest

Institutes of Medicine Places Harvard in Dubious Light

BOSTON--One hundred yards from the Medical School, the University is transforming the 10-story carcass of the old Boston English High School into a center of research called the Harvard Institutes of Medicine.

Once construction and planning problems are worked out (neighbor-hood activists claim Harvard did some building without building permits), top University-affiliated researchers will work at what promises to be a sparkling new $90 million center. But the project has already bumped up against concerns about space and ethics.

Originally, Harvard planned to work closely on the project with a curious partner: Healthcare Investment Corporation, the largest venture capital firm in biotechnology. The investment firm's role was to get Harvard researchers and private companies together for joint ventures.

Harvard billed this as the best thing since the polio vaccine. And money-wise, before the recent obstacles, it promised to be a great deal. Engineered by one of Harvard's most brilliant and arrogant administrators, Medical School executive dean David M. Bray, the arrangement called for Harvard to keep all patents (a veritable gold mine: revenue from the University's patents are going up 20 percent a year) and for the companies to pay Harvard steep licensing fees. The University would also get rental fees from biotech firms that plan to rent out floors in center, and there was hope that the Institutes' novel approach would generate philanthropic interest.

I am happy to report that the project came undone because Harvard and the investment firm couldn't get along. The breakdown comes a little more than a year before the planned March 1996 opening of the Institutes' first three floors. Now, according to Medical School officials, it isn't clear whether private companies will ever inhabit the Institutes.


These problems could end up infuriating the Boston officials who had backed the deal. The Boston Redevelopment Authority had expressed support for the sale of the old high school to Harvard because it appeared as though the city would be receiving tax revenues from the business inside. Officials at the BRA aren't talking, but most observers think that with Boston facing budget cuts, they are likely to be upset by the Medical School's about- face.

John Littlechild, vice chair of Healthcare Investment, a Cambridge-based firm, says his company was ready to go forward with the project. But then the Medical School got cold feet.

"Harvard Medical School and the affiliated hospitals decided that they needed all of the space right now," Littlechild says.

Ann L. Schwind, the Med School's administrative dean for planning, tells a slightly different story. She says the investment firm asked for too many floors in the Institutes at a time when Med School faculty and the Harvard-affiliated hospitals are desperate for new research space.

Schwind also says there was concern over whether Healthcare Investment could find new biotech companies willing to use the Institutes as an incubator during a time when the biotech industry was in a slump.

But Littlechild says that's wrong. "It would have been possible to find the tenants," he says. "No question about that."

Why the contradiction between Schwind and Littechild, who should have their stories straight? Sources at the medical area suggest that ethical questions about the project may have been the deciding factor in the school's decision to kill it (though Schwind vigorously protests the suggestion).

Still, the idea of the Institutes is not dead yet, according to Schwind. "Probably, for this project, we won't have the outside companies," she says. "But we remain very open in the future to similar projects."

Traditionally, university researchers have focused on projects that were of interest to academics, the government or both. Companies relied on outside experts for research (some of whom were, of course, academics who wanted to make a buck). Only occasionally did the two meet.

Now, with projects like the Institutes of Medicine, the lines between corporate and academic America are becoming increasingly blurred.