Putting Profits First in the Health Industry

MGH Case

There are many issues involved that relate to the commercialization of MGH's technologies in the case "Technology Commercialization at the Massachusetts General Hospital." For one, the commercial activities of the hospital have expanded significantly in recent years, and this has led to increased demands on the Corporate Sponsored Research & Licensing office. In 2003, for instance, the group negotiated more than 100 technology license agreements and also facilitated the creation of seven new companies. In return, the group received a great deal of income from sponsored research and license royalties. However, this growth created tension and raised questions about how commercialization actually fit with the hospital's overall aims (West & Ashiya, 2004).

There are also concerns about the hospital’s conflict-of-interest rules, which might be blocking innovation. Some question whether these rules should be changed. There are debates about the goals of the group. Questions asked include: Should it be to raise as much money as possible for research, to speed innovations to market for the benefit of patients, or to help researchers? There are also questions about whether these pursuits can harmonize with one another or whether one should take place over another.

The hospital's endowment also needs to be enlarged to help stabilize the institution’s dependence on external grants. As revenues from licenses and royalties have increased, stakeholders within the MGH community want the office to be additional revenue source.

Plus, the hospital has interacted with companies like Johnson & Johnson and Hoechst, which has led to agreements that have caused concern within the hospital’s staff over the appropriate type of relations with for-profit industry leaders. By the mid-to-late 1990s, the MGH itself held patents on several products, but royalties were small. There was a growing awareness among junior investigators of the commercial applications of their research, and an interest in start-ups and technology licensing (West & Ashiya, 2004).