The Future of Non-profit Funding in Biomedical Research

Gerald M. Rubin, Ph.D.

Howard Hughes Medical Institute

This presentation is about the future of all non-profit funding for biomedical research. This is a huge topic, and beyond my ability to address. One particular institution, the Howard Hughes Medical Institute (HHMI), happens to be the largest non-profit funder of biomedical research in the United States.

Funding from non-profits is very small compared to federal funding. The Hughes’ budget is about 2 to 3 percent of the total National Institutes of Health (NIH) budget, and about 5 percent of NIH funding for basic biomedical research. So even though we are the largest non-profit funder in biomedical research in the country, we are still small compared to the NIH. It is important that non-profits distinguish themselves from the NIH by being less risk-adverse. Once something becomes established, we should let the government fund it and move on. Another difference is that organizations like the HHMI and, to a large extent, the Markey Trust, unlike the NIH, tend to fund people, not projects. That is, they identify individuals who are talented, and give them money and freedom to pursue their own initiatives.

HHMI has an annual budget of $650 million. We are required by law to spend 3.5 percent of our net worth every year and we actually spend over 5 percent. In 2001, this amounted to about $515 million for medical research, $100 million for grant programs, and the remainder for administrative and other incidental costs. The grant expenditures are spread across a number of programs, including support for undergraduate science education in the United States, biomedical research in a number of



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The Markey Scholars Conference: Proceedings The Future of Non-profit Funding in Biomedical Research Gerald M. Rubin, Ph.D. Howard Hughes Medical Institute This presentation is about the future of all non-profit funding for biomedical research. This is a huge topic, and beyond my ability to address. One particular institution, the Howard Hughes Medical Institute (HHMI), happens to be the largest non-profit funder of biomedical research in the United States. Funding from non-profits is very small compared to federal funding. The Hughes’ budget is about 2 to 3 percent of the total National Institutes of Health (NIH) budget, and about 5 percent of NIH funding for basic biomedical research. So even though we are the largest non-profit funder in biomedical research in the country, we are still small compared to the NIH. It is important that non-profits distinguish themselves from the NIH by being less risk-adverse. Once something becomes established, we should let the government fund it and move on. Another difference is that organizations like the HHMI and, to a large extent, the Markey Trust, unlike the NIH, tend to fund people, not projects. That is, they identify individuals who are talented, and give them money and freedom to pursue their own initiatives. HHMI has an annual budget of $650 million. We are required by law to spend 3.5 percent of our net worth every year and we actually spend over 5 percent. In 2001, this amounted to about $515 million for medical research, $100 million for grant programs, and the remainder for administrative and other incidental costs. The grant expenditures are spread across a number of programs, including support for undergraduate science education in the United States, biomedical research in a number of

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The Markey Scholars Conference: Proceedings foreign countries with limited resources, fellowships for graduate students and fellowships for M.D.s to get postdoctoral research training after they complete their M.D. degree. However, we are phasing out the latter program because the NIH has instituted awards that do the same thing. We are delighted to let the NIH take over this activity while we pursue other approaches to funding physician scientists. If the NIH imitates us, it is the sincerest form of flattery. With regard to funding for medical research, 80 percent goes directly to HHMI Investigators. There are now 325 investigators at 72 institutions in the United States. The rest is controlled from HHMI headquarters in the form of space and overhead payments to the host institutions, and for major equipment items, which are given out separately to investigators. As the endowment increased from about $5 billion back in 1986 to a little over $11 billion today, the number of investigators has increased from 96 to a planned plateau of 330, however, there have been as many as 348. Some investigators leave to assume administrative jobs, or jobs in biotech or academia, which requires them to give up their appointment. In addition, we review our own investigators every 5 years, and about 20 percent are not renewed. These two sources of attrition are about the same magnitude. We have periodic competitions where we appoint new investigators. This was the situation two and a half years ago when Tom Cech took over as president of HHMI, and recruited David Clayton and me as vice presidents. We began to evaluate how the Institute spends its money to determine what changes would be appropriate for the future. When we started this examination the endowment had just gone through a period of rapid growth. We agreed that even if the endowment continued to grow, it would not make sense to increase the number of investigators to 400. There are two reasons for this conclusion. The first was that we know our investigators as individuals because the bureaucracy is not large. Our organization had already been strained with 330 investigators. To increase to 400 would mean that we could not maintain our style of review, and personal interaction. Moreover, at this time, the NIH was providing generous funding for many scientists. We felt that if we increased the number of investigators to 400, the best we could hope for was a 15 percent increase in the output. That did not seem like the best way to spend money. The primary mission of HHMI is to fund and advance basic biomedical research in the United States. Our challenge was to determine the best way to use this additional money. We anticipated additional funds of $50 million to $60 million. The cost of an investigator, if you include the money that is given to the host institution in payments for rent and utilities, is about $1.2 million per year. Not all the investigators are in this range, but that is the average.

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The Markey Scholars Conference: Proceedings Based on this number, $50 million to $60 million, would allow us to employ and support the work of 40-50 new investigators. Did we want to increase the number of investigators or do something else with these funds? In addition, we saw an advantage to having some of our programs not closely tied to our 70 host institutions, although there are clearly many advantages of working with host institutions. One is that we spend money efficiently when we house our investigators at host institutions because, although they become Hughes’ employees, they stay fully integrated members of the host institution, benefiting from its infrastructure. Taking advantage of the host institution’s infrastructure ensures that we can maximize the amount of research conducted. This is a huge advantage. So we anticipate keeping 80 to 90 percent of our research program in this mode. On the other hand, host institutions have their own culture and HHMI investigators must be part of that culture. Consequently, there are a number of factors that HHMI cannot influence, such as tenure decisions. These considerations led us to decide that rather than simply increase the number of investigators tied to individual host institutions we would set up a free-standing independent research center. We wanted to have a critical mass, and to have that critical mass associated with one or a small number of host institutions would upset the balance of our ongoing relationships. That said, we also wanted to avoid duplicating what we do successfully in collaboration with our host institutions. We did not want simply to create another Whitehead or Salk Institute, despite the fact that these are highly successful research institutions—and ones that each house several of our investigators. These are great places, but they function much like university departments. We found ourselves in a very unusual situation; we had a clean slate, no rules, and sufficient money to do something, but had not figured out what would be best to do. Two decades ago the Markey Trust found itself in a similar position. We began to examine issues that are particular to the current American biomedical research enterprise. First, there is a lack of places for scientists who want to continue to work in the lab with their own hands. Most scientists start as someone else’s graduate student and they serve an apprenticeship as a postdoc in someone else’s lab. As postdocs, they have varying degrees of independence, depending on the lab. They do that for several years, and then assume a faculty position and run their own lab. Especially in top-tier institutions, young faculty are increasingly advised not to work in the lab themselves, but to build a sizable research group with more hands doing more work publishing more papers. In many institutions, even medical schools with low teaching loads, the average assistant professor is out of

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The Markey Scholars Conference: Proceedings the lab within a year or two. While this may increase productivity and be an appropriate mode of operating for the vast majority of scientists, it is not ideal for the minority who do not really fit into this mold. This was an unmet need that we thought we could address. Second, the length of time spent in training—or worse, indentured servitude—has increased substantially in the last two decades. When I was a postdoc in the mid-1970s at Stanford, there was a big debate in the biochemistry department of whether to permit a third postdoctoral year, or if 2 years was the maximum amount of postdoc time before assuming independence. The extended postdocs of today were very rare back then. I became an assistant professor at the age of 26. The other two people hired in the same year in my department were also 26. Now people generally do not become assistant professors until they are much older, especially those with M.D.s. Even Ph.D.s are age 30 and over when they achieve independence. These forces conspire such that there is little or no period at the toptier institutions when scientists are both truly independent and afforded the time to be able to work in their lab with their own hands. There have also been changes in the culture of academic institutions in the award of tenure and expectations about publications that penalize small groups. In addition, we observed that there was no place for groups of people from different institutions to come together and collaborate. It is common for an individual to do a sabbatical in someone else’s lab. What is very uncommon is for three or four people to get together and collaborate in research. Imagine three people went walking on the beach and one of them said, “If there were someplace we could get together for a year, each bringing half a dozen members of our lab, and someone would give us money, we could try this crazy idea, and see if it works.” There is currently no place you can do this, and nobody would fund it. This is another unmet need we thought we could address by developing an institution that would reserve a reasonable amount of space, perhaps a third, for visiting scientists who would submit proposals for interesting scientific projects and come together on the project, which we would fund. To achieve these goals we would both include and reach outside our own set of investigators. At the same time we would provide a place to nurture creative individuals that do not fit in the current system. Many excellent scientists do not excel in the non-scientific skills needed to be successful in the typical academic setting. When you get your own lab you are required to do things for which you were not trained and have nothing to do with research. It is like running a small business. You have to hire people, fire people, evaluate individuals, motivate people, recruit graduate students, lure postdocs to your lab, and deal with their personal problems. Some people who would function extremely well as research

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The Markey Scholars Conference: Proceedings scientists, do not excel in these other things. They have difficulty making the transitions necessary to succeed as independent investigators in typical academic settings and might do much better in an environment where they could concentrate more fully on research. As an example, here is a self-assessment by one of these “impaired” individuals: “I have indeed actively tried to avoid both teaching and administrative work. This was partly because I thought I would be no good at them, but also out of selfishness. I do not enjoy them, whereas I find research most enjoyable and rewarding.” “Of the three main activities involved in scientific research, thinking, talking and doing, I much prefer the last and am probably best at it. I am all right at thinking, but not much good at the talking.” “‘Doing’ for a scientist implies doing experiments, and I managed to work in the laboratory as my main occupation from when I started as a Ph.D. student until I retired. Unlike most of my scientific colleagues, I was not academically brilliant. …However, when it came to research where experiments were of paramount importance and fairly narrow specialization was helpful, I managed to hold my own …” By his own assessment, this person would not have done well as an assistant professor in most institutions, but in actuality he managed to do very well. This quote is from an autobiographical essay by Fred Sanger (Ann. Rev. Biochem. [1988] 57:1-28), who, as many of you know, was the only person to win the Nobel Prize twice in chemistry, first for devising methods for sequencing proteins and then for sequencing DNA. There is a need for places for people who are very creative and want to muddle about in the lab with their own hands for their entire career; such individuals do not really fit into most academic institutions. There are places, like the NIH, where scientists can do this. In this sense we are not inventing anything new. Our goal is to create a home for people who want to be directly involved in the conduct of research with a small research group of their own without the distractions of grant writing, teaching, committee work, and other administrative responsibilities. The way you build critical mass for larger projects in such an environment is by interacting with your colleagues to create larger, perhaps interdisciplinary, groups. Let me state that, for most individuals, we expect we will be providing a way to delay non-research activities rather than totally avoid them because our view is of a place where people would spend the beginning of their independent career, when they really want to work in the lab. Later, when they transition into a more typical university lifestyle, mid-

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The Markey Scholars Conference: Proceedings way through their independent career, they can assume these other responsibilities. One of the things that we hope to provide by postponing grant writing, etc., is to enable scientists to focus on science in a less pressured and an unscheduled environment. It is very, very rare in a university environment to be able to talk spontaneously with colleagues for a couple of hours without worrying about appointments and other time obligations. Our hope is that by getting rid of these distractions we can provide that time. Most assistant professors probably spend 30, 40, or maybe as much as 50 percent of their time not on their own scientific research, but dealing with their grants, classroom teaching, worrying about hiring support staff, and worrying about other issues. Such an environment might enable scientists to succeed while spending only 50 hours a week doing their research, rather than needing an 80-hour workweek, because we eliminated 30 hours of activities that are not directly related to their research or to interacting productively with their colleagues. That is our goal. In addition to having a place to do this, you also need to establish a culture and a scientific program. I am going to focus mainly on the culture here because I think that, by far, it is the most difficult and the most important to develop. You can always change your research program and indeed you expect the research to change over time. But once you establish a culture, once your reputation for a given style of operation has been made, it is very difficult to change. Here is another quote. This one is from the person who I think has been the most successful in establishing a culture in a research institution. This is from Max Perutz (from the Preface to I Wish I’d Made You Angry Earlier [Cold Spring Harbor Press, NY, 2000]): “Every now and then I receive visits from earnest men and women armed with questionnaires and tape records who want to find out what made the Laboratory of Molecular Biology in Cambridge (where I work) so remarkably creative. They come from the social sciences and seek their Holy Grail in interdisciplinary organization. I feel tempted to draw their attention to 15th century Florence with a population of less than 50,000, from which emerged Leonardo Michelangelo, Raphael, Ghiberti, Brunelleschi, Alberti, and other great artists. Had my questioners investigated whether the rulers of Florence had created an interdisciplinary organization of painters, sculptors, architects, and poets to bring to life this flowering of great art? Or had they found out how the 19th century municipality of Paris had planned Impressionism, so as to produce Renoir, Cézanne, Degas, Monet, Manet, Toulouse-Lautrec, and Seurat? My questions are not as absurd as they seem, because creativity in science, as in the arts, cannot be organized. It arises spontaneously from individual talent. Well-run laboratories can foster it, but hierarchical organization, inflexible, bureaucratic rules, and mounts of futile paper-

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The Markey Scholars Conference: Proceedings work can kill it. Discoveries cannot be planned; they pop up, like Puck, in unexpected corners.” Max Perutz was the first director of the Medical Research Council Laboratory of Molecular Biology (MRC), arguably the most successful scientific biological research institution for 30 years from the 1950s to the 1980s, although I may be biased because I did my Ph.D. there. Perutz made it successful for a number of reasons. Let me point out two things about him. First was his desire to minimize bureaucracy; he ran an institution with 300 people and yet managed to spend most of his time working in his laboratory. Second, which is probably more important, was his remarkable ability for recruiting talent, nurturing that talent and not taking credit for that talent’s work. Most people in this room probably would not be aware that when Watson and Crick discovered the double helix, Watson was Perutz’s postdoc and Crick was Perutz’s graduate student. In fact, Crick was Perutz’s second graduate student. His first graduate student was John Kendrew. Here is a scientist whose first two graduate students and first postdoc all won the Nobel Prize, less than 15 years after starting in his lab. I do not think that anyone is going to match that record, but it shows a major reason why the MRC was so successful. So when we examined models for our institution, the MRC is one of the institutions we looked at and, for the non-biological sciences, the ATT’s Bell Labs. These laboratories share some common attributes. They both had small group sizes. Their PIs work actively in the laboratory. They tend to be places where people spend part of, but not their entire career. So these are two of the most influential models we are using to guide us. We are imagining a facility of about 400 persons, running the gamut from graduate student to technician to principal investigator. We expect a core of about 180 resident scientists and then about 120 support staff providing services ranging from the cleaning of glassware, to tissue culture to sophisticated machine shops. We will reserve about 100 spaces for visiting scientists who will work, fully funded, for periods of 3 weeks to 3 years, while retaining their primary appointment at their host institution. We want to copy the successful arrangements at places such as the Carnegie Institution of Washington, the Whitehead Institute, and at University of California, San Francisco (UCSF), of having fellows enter right after graduate school with a non-renewable 5-year appointment so they can engage in an independent postdoc, perhaps supported by a technician or two. My friends at the Whitehead Institute indicate that this plan works well, but would be better with more fellows to reach a critical mass. So our goal is to accommodate up to 20 of these fellows.

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The Markey Scholars Conference: Proceedings Following the model of HHMI investigators based at our host institutions, we will have resident investigators who get research support including salaries for up to six additional individuals. The goal is to keep the group sizes small enough that people will interact and to also allow the group leader to be an active scientist. If you want to have an interactive environment, you have to have a small group size. I know of no institution that is truly interactive with large group sizes. How do we get people to come to this facility? Why would young scientists want to come here as opposed to going to Harvard, Massachusetts Institute of Technology, or UCSF? We are not going to award tenure; I do not think an institution like this should have tenure because we are small and need the flexibility to change research areas with time. We will have an appointment cycle, similar to that which we use for our current investigators, which works quite well. This would include a review after 5 years with either a 2-year transitional period if they are unsuccessful in their review, or another 5-year appointment and the ability to come up for another review. HHMI investigators have the ability after they pass their first 5-year review to transfer their appointment to another institution. So in our case, we could say that passing the review is the substitute for tenure; you become an investigator with the right of transfer, and you can move to any of our 70 host institutions that will have you as a HHMI investigator. We think many people might prefer to spend the first 8 to 10 years of their career in a place like this, without distractions, knowing that if they are successful they can move on to become a HHMI investigator in another institution. Indeed, our view is that people will not spend their whole career at the institution we will establish. We anticipate recruiting half a dozen senior scientists to provide mentorship and leadership, and those people might arrive midway in their careers and complete them here. But the idea is that most of the individuals that come here would stay for a relatively short part of their career and then move on. Although there would be the opportunity for some to stay indefinitely, they would have to embrace the small group size, the structure, and the culture of the place. So in closing, I want to give some physical reality to this intellectual construct. We are currently in the planning phase and expect to become operational in early 2006, three and a half years from now. My primary job at HHMI is planning this new facility, and my current focus is more on the physical space and less on the culture and on the program. That is why much of what I put forth today is trial balloons and I am very open to receiving your comments. We have purchased a piece of property, which is called Janelia Farm, and we decided to keep that name. Like Cold Spring Harbor and other

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The Markey Scholars Conference: Proceedings similar facilities, the name will not constrain what we are doing there even into the distant future. Janelia Farm is 40 minutes by car from our headquarters. It is also 40 minutes from the White House and downtown Washington. It is only 15 minutes from Dulles Airport, which is very important for a place with a lot of visitors. We are close enough to a major metropolitan center to accommodate two-career families. Our proximity to Dulles Airport means we are within a few hours of any major, scientific center in the world. It is slightly isolated in the sense that it is not on a university campus. We view the isolation as an advantage. In my experience, interdisciplinary collaboration is counterintuitive at a place like Berkeley. It does not happen because departments are insular. While it helps to have a great computer science department on campus because my graduate students can take the programming classes necessary to do bioinformatics, in my experience the computer scientists are not really interested in our problems. Computer scientists have their own career structure, and the reward structure in universities penalizes interdisciplinary research. The underlying message is that if you want tenure, work in your own discipline; don’t get involved in anyone else’s discipline because you will lose your champions. Figure 1 shows an aerial photograph of Janelia Farm. Its borders are Route 7 and the Potomac River. There are some existing office buildings and other buildings such as the old farmhouse. We will not utilize these buildings initially. Rather, there are plans for a building that will have about 200,000 square feet for research. We’re going to have a 250-seat auditorium, a 100-seat auditorium, a conference facility, about 100 hotel rooms, and, 24 studio and 36 two-bedroom apartments on site. One way to overcome the isolation is to have external scientists come in for conferences, a strategy successfully employed by Cold Spring Harbor Laboratories. The architect is Rafael Viñoly, who is involved with a number of science buildings. For example, he is working on the genomics building at Princeton. He has also designed the Kimmel Center for Performing Arts in Philadelphia, the David L. Lawrence Convention Center in Pittsburgh, and a number of other similar buildings. Figure 2 shows one of the architect’s conceptual drawings of the main science building. It will be built into the side of the hill, utilizing a natural slope down toward the river. The bottom floor will house most of the non-research space. The top two floors will house the labs, support and office space. Because we have 260 acres, we do not have a site problem. You could not build a building like this on most university campuses, where there is not a lot of land available, and where you may need to build an eight-story tower to fit the required square footage onto your building lot. To put things in scale, the National Institutes of Health cam-

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The Markey Scholars Conference: Proceedings FIGURE 1 Aerial photograph of Janelia Farm. pus is 330 acres. So we have a lot of land on which to construct a small number of buildings. We anticipate that the program will enable people to make technological advances and have access to the support staff required to develop novel instruments—a resource most academics do not have. While a number of universities are developing interdisciplinary programs, there are still many problems. Until recently, the development of bioinformatics in academia was crippled because the computer scientists did not consider bioinformatics to be real computer science and the biologists did not think bioinformatics was real biology. So there was no common ground for interdisciplinary work to develop, given that individuals needed a home in either a computer science or biology department. The same thing is now happening with instrument designers and instrument builders. They do not really have a home, and one of the things we can do is create a home for them. I think that would be an important contribution. The institution we are planning might be described by some as technology focused. I do not think that is really right. I think it is an institution that is focused on unsolved problems in biology, which of necessity makes it technology driven. Unfortunately, the structure of universities limits

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The Markey Scholars Conference: Proceedings FIGURE 2 Architect’s conceptual drawing of the proposed main science building. the ability to do technology development at the required level, which may be why a lot of the most interesting technological development is happening in the private sector. I think it would be good for some of this work to return to the public sector. We hope to facilitate this by providing the kind of funding, team work, and technical support that you find now in good biotech companies, but not in the universities.