for R&D investment in the 1981 Economic Recovery Act, which provided a 20 percent tax credit for incremental increases in R&D spending. Similar research investment incentives to encourage research activity and the translation of research into products have been used since that time.

During the 1980s there was also increased interest in the commercialization of the results of academic research. The 1980 Patent & Trademarks Act stipulated that inventions made by academic scientists on federally funded research projects were subject to institutional policies and were not the property of the government. In effect, academic institutions were granted the authority and incentive to protect the intellectual property of their faculty who were supported by federal research funds, own patents resulting from federally sponsored research, and seek industrial partners to transfer technology to the marketplace (Waugaman and Porter, 1992). The U.S. General Accounting Office, an investigative arm of U.S. Congress, reports that large numbers of faculty have linkages with for-profit companies, and the control of inappropriate access to federally funded research results is causing growing uneasiness in many sectors (U.S. Government Accounting Office, 1992b). This was particularly evident in the Scripps Institute/Sandoz Company agreement announced recently in which Sandoz was to have exclusive rights to license the research results of scientists at Scripps even when the research was underwritten by U.S. taxpayers. This agreement has subsequently not materialized. In the worst light, this has been described as "science for sale" (Malone, 1992).

The increased interaction between academic institutions and industry has also stimulated an increase in technology transfer, which some would argue has reached its highest level of expression in the biotechnology industry. Biotechnology is defined as "any technique that uses living organisms [or parts of organisms] to make or modify products to improve plants or animals or to develop micro-organisms for specified uses" (U.S. Congress, Office of Technology Assessment, 1988b). These methods were revolutionized during the 1980s, and there has been a huge investment by the federal government in such research. This explosion of biological knowledge, together with the ability to apply the knowledge to increasing the understanding of disease states and the development of biotechnology products to modify diseases, led to intensive activity in the academic community to commercialize the discoveries. This activity has led to the formation of hundreds of biotechnology companies, which often represent a positive interaction between the academic community and the investment community (Blumenthal et al., 1986a and 1986b).

These dramatic changes have created unprecedented opportunities for innovative new product development to improve health care, but the new developments have also led to novel situations that must be dealt with by industry, government, and academic institutions. Clearly, innovation and the translation of fundamental research to improved health care rely on the interdependent relationships of research institutions, government, and industry.



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