In Defense of Physician-Investor Collaboration

Abstract

In his News Focus story Expert firms play a hidden role in connecting science and (11 January, p. [137][1]), J. Mervis reports on the inner workings of expert networks and how universities are navigating potential conflicts of interest. However, Mervis does not address the apparent disconnect in how users of expert networks are perceived by the university officials setting conflict-of-interest policy and the physician researchers providing advice. Based on the story, physicians seem to prefer advising investors in private companies that are developing medical technology with a long investment horizon. They are more skeptical of advising Wall Street analysts who plan to use the information for short-term stock trading. Yet, academic centers such as the Cleveland Clinic do not make this distinction or consider the varying risks; they only distinguish between using expert networks and consulting directly for companies that are conducting new research or trying to improve products. As a venture capitalist at a fund that has invested $600 million into start-ups developing new medicines, I find it unfortunate that academic centers are discouraging participation in expert networks altogether. Many users of expert networks are venture capital investors who are hoping to finance new research to develop medicines, rather than hedge funds that seek to swap stock on public markets and profit. Although venture capitalists attend symposiums and conferences, we rely on expert networks for timely access to physicians to provide information into treatment paradigms, patient epidemiology, and their unmet medical needs. Academic centers should not assume that all users of expert networks are financial firms, nor should they generalize the motivations of financial firms. Financial firms such as venture capitalists have very little motivation to benefit from insider information, because of multiyear investment horizons. Simply put, learning about trial data a week before a press release is not going to influence a venture capitalist to make a 5-year commitment to a new drug. Academic policy on expert networks should therefore focus on discouraging interaction with public investors such as hedge funds, not venture capitalists seeking to finance the next breakthrough medicine. [1]: /lookup/doi/10.1126/science.339.6116.137