Harvard Has Controversial Scheme to Fund Research

Harvard University said Wednesday that it is raising $30 million to start companies to commercialize medical research, a move that academics believe creates potential conflicts between the pursuits of knowledge and profit.

The decision comes eight years after Harvard scrapped a plan amid controversy to invest in a professor’s genetic engineering work after the university’s involvement in business was deemed unethical.

Administrators said the new scheme would raise sorely needed money to supplement Harvard Medical School’s $350-million research budget and speed up development of medical innovations while preserving the school’s academic freedom.

“There is, by definition, no conflict because Harvard is not the decision maker as to where the investments would be made,” said Harvard Vice President John Shattuck. “It doesn’t direct researchers in particular directions that are financially important.”

Under the plan, Harvard would raise $30 million from outside investors to develop health-care businesses under a limited partnership called Medical Science Partners. That partnership would be run by another limited partnership headed by Andre L. Lamotte, a former drug industry executive, and Ion Inc., a Harvard subsidiary.

Harvard would get 10% of any of the company’s profit, which would then be reinvested in medical research.

The new investment structure, formally established this month, differs from those at other universities because Harvard is directly involved in raising the money used to start up the companies.

Most research universities have licensing offices that patent and market professors’ work through existing companies and then divide royalties among the university, the department and the professor.

Stanford University last year earned $9.1 million through licensing fees, tops in the nation, while the Massachusetts Institute of Technology made about $3 million.