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Scripps' Latest Deal Sparks Debate : Research: Critics fault taxpayer- funded lab for giving a foreign firm first crack at technology.


The size of the Sandoz deal was attractive to Scripps because it will enable the lab to plan its budget more effectively. But Beers said the real appeal of the relationship with Sandoz is the "scientific fit": About 70% of Scripps research projects overlap with what Sandoz is pursuing on its own. Sandoz can request, but not demand, that certain research projects be carried out, Beers said.

He said Scripps scrupulously followed the letter of the law in drawing up the Sandoz agreement and that the controversy "seems to be over existing policies of the U.S. government which we are adhering to. If the Congress wants to implement changes, we'd be happy to abide by them."

The Bayh-Dole Act of 1980 regulates much of how government-sponsored research is commercialized. The law permitted, for the first time, universities and private research labs to patent government-funded research discoveries under certain guidelines. Above all, applicants must demonstrate an ability and readiness to commercialize the technology, a clause that addressed prior criticism of the government for "sitting on" government-owned discoveries.

The bill does not ban collaborative agreements with foreign firms as long as the products based on the government-sponsored technology are not manufactured offshore.

Dr. David Blumenthal, chief of health policy research and development at Massachusetts General Hospital in Boston, said laboratories such as Scripps that specialize in basic research are under more pressure than most to line up corporate partners because federal research budgets increasingly favor specific research targets, such as a cure for AIDS.

"From the researcher's viewpoint, they are an additional source of funding at a time (labs) are having trouble maintaining their funding base. Also, they are a way of getting results out more rapidly," Blumenthal said. "From a company's standpoint, the benefits are often intangible. They help in education and recruitment of new scientists and (provide a) window in what's going on in the field."

Do agreements with foreign drug firms constitute a threat to the nation's technology base? Blumenthal and other health economists stressed that they weren't familiar with the details of the Scripps-Sandoz deal, but aren't categorically opposed to deals like it.

"Firm rules against relationships with foreign companies don't make any sense until we understand what's gained and what's lost," Blumenthal said. "Money that comes in will seed the U.S. biomedical establishment and it's possible that Sandoz won't benefit. The research will get published and it's just as likely that the basic research that's funded will serve science generally."

Katharine Ku, director of the office of technology licensing at Stanford University, said the government is better off promoting research than devising new kinds of price controls. The government effectively has that power in setting reimbursement limits in Medicaid and other government medical insurance programs.

"They can always set price limits when the drug comes out on the market," Ku said. "What the government should be encouraging is development of technologies."

Scripps Research Institute at a Glance Location: La Jolla. Chief executive: Dr. Richard Lerner. Founded: 1961, as a division of Scripps Clinic. Incorporated separately in 1991. Research staff: 710, including 640 MDs and Ph.D.s and 70 graduate students. 1992 research budget: $114.5 million, of which $67.4 million, or 59%, came from National Institutes of Health grants, $10 million from corporate collaborative agreements and the rest from private sources.

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