© Oo ku AN INTERVIEW WITH JOHN F. SHERMAN, PH.D. BY STEPHEN P. STRICKLAND, PH.D. ON THE OCCASION OF _ THE 1@0TH ANNIVERSARY IN 1987 OF THE NATIONAL INSTITUTES OF HEALTH and the 150TH YEAR IN 1986 OF THE NATIONAL LIBRARY OF MEDICINE SEPTEMBER 1986 Table of Contents Introduction and Biographical. Sketch Identifying Landmarks of Change and Development at NIH~ Balancing Expert Judgment and Government Individual Investigators, Scientific Infrastructure “Peer Review of Training Grants and Fellowships — expanding National Capacity , The Role of Contracts. Means ‘and Tools Available to Institute Directors Geogr aphical Di str ibution Impact of ‘NIH on Education and Research Financing Clinical Trials For-Profit Hospitals Role of Industry — New Issues Dr. Shermans curriculum vitae and publications listing - 198 il. 12 12 1300 15 7 DR. JOHN F. SHERMAN 7 oe “Introduction and Biographical Sketch This interview. with Dr. John Sherman is one in a series of “oral hsitories". focusing primarily on. the origins and development of the extra- “mural. programs —~ most especially the grants programs -— of the National Institutes of . Health, beginning with the establishment of the Division of Research «Grants in 1946. Like Dr. Sherman, most of those interviewed had eritical roles in the development of the extramural programs. John: Sherman is, in the view of colleagues at the National | Insti “tutes of. Health and the Association of American Medical Colleges, "the man in charge of making things go." Since his retirement from federal service, © he. has been Vice President and more recently Executive Vice President of '. the mentioned Association. At NIH, he was for more than five years Deputy ‘Director of NIH, for part of that period also serving as Acting Director. Before that, he had run the extramural programs of NIH, as NIH Associate Director. Earlier, the extramural programs of the National Institute of | Arthritis and. Betabolic . Diseases and the National Institute of Neurolo- gical Diseases and Blindness. John Sherman is a statesman in the biomedi- | ‘cal: research enterprise, and one of the most dedicated public servants in recent times. This oral history project “is being carried out, in 1986 and 1987, under a grant from the National Institutes of Health; administered by the National Library of Medicine. - STEPHEN P. STRICKLAND, PH.D. WASHINGTON, D.C. Interview with Dr. John. Sherman 1 by Stephen P. _ Strickland, Ph. Dee Septenber 5, 1986 SS: I am ‘talking this morning with Dr. John Shennan, ‘Executive Vice President .. of. the Association of American Medical Colleges, former Associate Director and - Acting Director of the National Institutes of Health, and | an old friend. - One “impression: I get. from ‘talking to ‘the picteers of the NIH grants programs, those great builders and enthusiasts, is that the. whole thing was simple at. first, but the structure was so. sound that the grants program has. -eontinued from. 1946 until. today with things being absolutely rosy most of. the time. This may be true, but it seems improbable. I wondered, in your years at NIH, if “you could help me identify some landmarks of change, development, division of authority, and how new situations were dealt with. .. JS: “fy would say that the basic element in that context was the simple yet el- _~egant ‘nature of the research authority enacted in the addition. to the Public ' Health -Service Act in 1944. To my mind, few people appreciate how that extre- ~ mely- innovative and broad legislation provided the framework for. the whole program in those early years. This was, of. course, before the establishment of most of the categorical Institutes. But it is a-significant landmark in the biomedical research enterprise, and it ought to be so viewed” with respect to - any other. landmark Pieces of . federal legislation, Given that, however, there were indeed, as you implied, some periods of contention or uncertainty as to either. the pace or the direction in which the program should evolve. For example, most of the early people involved were not academics, but were old-time Public Health Service officers who had little ‘ok no exposure to research. In this sense, it is somewhat remarkable that. the extramural program came out as well as.it did in its relationship to academic activities. I. guess in. part that was due. to the fact that both sides were. learning... The academic community hadn't had much responsibility to or. rela- tionship with the federal government except in time of war.. Therefore, it was all new to them. And the program was small, which made for an ease of. communi- cation even though the environments and. traditions were markedly different. That, I think, in turn is partially explained by the fact that when NIH star-. ted to expand after the war, there were a lot of people coming. in. from the academic environment. who tended to "balance off". For example, James Shannon and C.J... Van Slyke came from totally different backgrounds, but both of them _ played a major role-in-the early years. the establishment of the relationship between the academic community , in’ particular. the. academic medical community, and the NIH was not always smooth. There was a great deal of concern, as you know, centered not only over. the -enabling legislation for the National Science Foundation, but also the evolu- tion of programs at NIH as to what the various roles and responsibilities ought to be. I think it came out in a very useful way; the academic community didn't control the process, and yet.they were highly influential in helping to keep it from becoming a typical federal bureaucracy. The exception that I've reflected on was the myth that many of us promoted and believed -- the myth VV that we could» disprove. the contention that federal funds: meant: a substantial degree of federal control. That, I. think, has proved over time indeed to be a myth, ©. In the early days we had sort of a Camelot. in distributing funds. But I. am also. convinced that even though our conviction wasn't valid in the long haul, nonetheless: at the time it enabled the NIH to accomplish what it did, _ both in substantive as well as managerial senses. SS: Are you ‘saying that the pervasive acceptance of. this notion that. federal Influence wouldn't. be controlling made it possible to do as much as you did? js: I think so. It. ‘brought the two "cultures" together , ‘because otherwise the inclination of the AMA and of many people in academic medicine would have — “been to fight the NIH activity. The _ very wise move to bring in outside” experts who, of course, were concentrated in the academic community, served wonderfully. to | facilitate everything that's happened since,. That was very signficant. ; a SS: . One thing. that Ernest Allen said in an interview 25 years ago was that he and Dr.. Van Slyke were surprised at the number of research proposals they got after they had released a circular saying, basically, that the NIH was taking over wartime contracts and would have some extra money, so please submit any good research proposals. Missiles came. over the transom in surprising numbers, too many to handle. They started looking through "Who's Who. in. -Bmerican Science" and other . such sources to sée who knew about a particular - . aspect of biochemistry, etc. But Dr. Van Slyke had come out of a-medical school, chad he not? JS: . He had been in the Public Health Service for a long period involved with - venereal diseases, so’ he was- much less an academic than he was a federal - ‘bureaucrat. SS: ‘and Jim Shannon was out of industry, although he had served as chairman “of a study section. Js: His. formative years were in academia, before he went to Squibb. There was . some military orientation for the malaria program, but it- was influenced ~ by an academic attitude. Balancing Expert Judgment and Government Accountability — SS: . Another thing that Ernest said 25 years ago and repeated in the case of my interview with him recently, was that once the study sections were set. up, van Slyke and Dyer and Shannon were very watchful to make sure that nobody on staff who was acting as executive secretary, or in any other capacity, tried > “to second-guess the experts. ‘There was a deference to experts in 1 the academic institutions on the part of the bureaucrats. JS: That's right. - But there was also, ‘through the wisdom of that. two-tiered system -- the study sections and the advisory councils -~ a recognition of the two important features of that whole relationship: one, the dependence on ex- perts for evaluation of scientific merit, and at the same time,. the larger view from the councils in terms of the relevance of projects recommended for approval in the study sections process to programmatic objectives of the ‘Institutes. Still a semblance of control had to be there since it was federal money; the Surgeon General didn't have to make an award just because. of the © 2 . recommendations of the councils. IT. know several. instances where sim ‘shannon ‘put his foot down and said he didn't care whether. or not there was a recommen- dation» for. paying a particular grant; he, as responsible federal official did -.not feel it should be done. ‘There was a most ingenious’ arrangement there that -. enphasized quality and merit, and yet didn't unduly ‘diminish the authority of. . the responsible - federal official, regardless of what some of the: people in- -the “Bureau of the Budget -—- and in. political science ~- used to say. | SSt- ‘T-agree. And basically that balance still seems to be there. 383. T think it ‘exists ina very productive and reasonable fashion, respecting the need for flexibility in the management of the scientific enterprise, and also in the preservation of those things that result in reasonable accounta— ~ bility for public funds. I put it that way because. I still find myself frus—: trated and dismayed that we haven't been able to find a better approach to demonstrate real accountability - than to use an elaborate system of financial auditing as a surrogate. SS: Is’ that an example of a major change from the early days | to the present day? JS: We like to say that NIH ‘ran the grants program for about 15 years “before. it. realized it was supposed to have some regulations! That's an oversimplifi- cation, but. not by much. The programmatic objectives and the means to accom-. plish those were established --.setting up the instruments to distribute the money -= then we worried about cleaning up things with respect to regulations. I think that's the only way the _ Process — could flourish. And it did so with amazingly few major mistakes. . : SS: T. would say so, “But what did. the application of elaborate: regulations in reporting requirements ‘and auditings do to the. process? _ I. am sure it made it more expens ive . JS: Right. And to a significant, ‘but not lethal degree; it frustrated re— searchers and program managers because of the fact that, like many other acti- vities. in our society, it became overly elaborate. Therefore the ‘amount of effort that goes into "processing" the project grant systen is unnnecessarily complex. The result of that is that you develop, both in the institutions and _at the NIH, an elaborate bureaucracy with a lot of second-guessing or levels of clearance. Individual Investigators, Scientific Infrastructure - SS: The grants in the first instance were inspired by the. wartime experience and focused on. the individual. Back then the grants process really did re- fFlect the philosophy that if you picked a good man with a good idea and equipped him with the right resources, the grant should let him do what he decided was. important. to doin the broad context of medical science... Later, other kinds of grants were created. : a ~ JS ‘The next major consideration was Shannon's concern about an adequate in-- frastructure for research. That created an element of controversy both within and outside NIH. First, other than just the simple project grant system, “there was an emergent threat to the growth of the enterprise in the fact that — there needed to. be better and more facilities. We also had‘to worry about — “training... Another question was, if ‘there were” increasing amounts Of money, . could we continue to let the so-called retail approach dominate the system, or | did we need to. find some ways to complement that by packaging activities in - -blocks that permitted larger chunks of money to go out. T. think the first area “of disagreement occured over NIH's: role in train- “ing. Tf you recall, the Cancer Institute in 1937 had - received . authority to make research fellowships. After World War II, however, it was properly per- ceived that if anything was going to be done about categorical illness through research, there had to be an expansion of people who: knew something more about those particular diseases. Despite the expansion of those cadres during the - war, in the chronic disease area particularly — oncology, diabetes, rheuma—- tology and so forth —- there was a real paucity, not’ only of trained individu- als, but also of places to train then. So a major feature of the early expan- sion of. the NIH training program, beyond just the research fellowships, was a series.. of clinical traineeships that were frankly created to permit the expan- sion. of better trained diabetologists, and endocrinologists, and oncologists, - and cardiologists, etc. It was largely a non-research effort, although it was ~ hoped that there would be some research involved. Then came the graduate training grants, and it was there that I believe the biggest point of tension ocurred. There was. then a constant battle with the academic clinicians’ who were thwarted by not being able-to find ready sources of money support for - graduate medical education. In many instances, they converted the NIH gradu- ate -training grants to residency training support rather than the provision of same clinical exposure at the. graduate. level in. order to become a good clinical investigator, » to complement the basic research. That was one of the reasons for putting =a special payback provision in the National Research Service Award legislation... Oe “SS: Which requires what? _ gS: It requires that if the individual doesn't go into essentially a. research activity after the training, he/she has: fe pay. back whatever amount was involved. - ne : SS: - who were the "contenders". in this issue? JS: There were. two different forms. For example, the people in the mental health field were able to pursuade the Congress and the Executive branch that - the need for a larger number of better trained psychiatrists, particularly to “staff the public mental health hospitals, was a justification for a straight-_ out clinical training program, with research being completely supplemental, off to the side. Neurology took a somewhat different approach. They conten- ded . successfully for awhile that they were a so-called academic discipline, ‘that is,. all neurologists were practicing within academic medical centers in contrast to those such as internists in private practice. . They went so far at one time as to almost require that an institution wouldn't get a neurology training grant unless it was willing to set up a. department or division within the medical school with a neurology designation. that situation caused consternation, both within the front office of NIH and also in the dean's offices. The aftermath of that was a growing sense of 4 - OQ we AS JY imbalance in the ability of the school as a whole to maintain a well diversi- fied, high-quality training program in medical education because you had. then, aS you may see now for different reasons, an increase in the automony of the program directors and department heads at the expense of the cohesiveness of ‘the educational program asa. whole. We've gone beyond that kind of impact. .~ ~ from. the impact of research funding. Now the problem is what results-from the a faculty . practice plans. ‘the power within the schools resides.in a series of departments. In the early days it was research and training money that was coming: in, and now it's the faculty practice money: that's coming in. The _ consequences: are much the Same . Peer Review of Training Grants and Fellowships — SS: .. How did the review mechanisms work with respect to training grants and fellowships? It's fairly easy to see how a scientist (or group of. scientists) with a project gets reviewed by peers, since the only question is whether the science is good science, and the scientists competent, and in the second round,» whether. the project is in accord with program goals. But how did the review process work in these other areas? . a JS: -In the fellowship’ area it was simple. Like a research project, it con- "cerned a single individual who was proposing a research project under a desig- nated ‘sponsor. So .the fellowship component of the whole training effort flowed rather smoothly. It was in the training grant.area that one ran into ~ . the uncertainties and difficulties because, on the one hand the agency was ~ trying - to build a capability for clinical investigations in categorical areas, and the people involved in the institutions were still. confronted with this. --desire to expand the specialties and subspecialties of medicine, fully aware - that research was important, but staying more concerned about the overall educational. program. So, first of all one had a set of guidelines for the program objectives that were not contradictory, but a little confusing in: terms of the objectives, since it didn't say right out that it was only for research. The guidelines used to say that the grant was for "academic medi- cine", but you couldn't be a. good clinical. teacher without having a firm ‘grounding in your specialty or. subspecialty. You also. couldn't be a good clinical investigator unless you had some very good research training. In, the -area of clinical. investigation, that. research training was dependent on a thorough grounding in the subspecialty of choice. ‘Thus, there were dual, sep- arate but related purposes which permitted the people in the institutions to pursue their interests, and in other respects, permitted the agency to achieve | its primary. purpose of getting on with the. research enterprise. ss: so ‘that: was one tension. But who are the "peers" who review whether , say, Washington University gets a training program or not? _JS: They are the same types who, say, in St. Louis are wearing one hat as the chairman of the department of medicine or surgery, and another hat when they come to Washington to look at how we expand the manpower pool of clinical investigation. Given the lack of funding elsewhere for other desirable purposes, residency training, - for example, NIH had. to be pretty creative, - Let me give you.a specific example on this: At the time that Secretary Caspar. Weinberger decided to do away with the training grant program in 1973, the Neurology Institute set out a specific set of © objectives for a training : 5 NY grant - program | saying that they were training people for research, basic and. clinical, inthe neurological diseases. Weinberger. essentially said, “Look, this» “whole idea of NIH-supported training is for the birds." ‘The letters’ that no came in to-the Bureau of the Budget all complained not that research training ‘in general .was going down the drain, but that the termination would destroy the specialty of neurology. So theré was a constant tension which. derived: from the fact that a- good clinical investigator had to have training in both sectors: research and his or her special ty. : “gat But was. there no difficulty in finding people. who were object ive about: the capacity of agiven institution. to have such a clinical training program so.as to provide the right setting for carrying out the research? I would have. thought that the competition would have been a little keener, and make it harder to be objective if. you had to bring people in from- one medical school into a study section to look at whether another medical school would qualify. JS: ‘There was remarkably little of that, Steve. SS: Could you discuss the Shannon research and training grants illustration? " IS: Jim Shannon certainly recognized and vigorously defended . the importance of the project grant system as. the keystone of the whole extramural | enter- prise. But. at the same time, he was concerned about the infrastructure and, - interestingly enough, about help to medical education. He wanted to find some way that the institutions could exert greater control over their. own destiny. | So he devised the idea of what he used to refer to as the "general research and training program" which is now called the Biomedical Research Support Grant, aS a means by which the institution would be granted, on a formula basis,’ additional money dependent on its success in the project grants system. The purpose that he had in mind was to balance the institutional impact, the . internal impact, of a heavily. emphasized - project grant system with some flexible money, xresearch-oriented, that would be under the control of the institution. and thereby permit the institution to balance off internally its research activities and overall strategy. That initially created two sets of tensions, one within’ the institution, where the faculty frequently described those funds. as. "the Dean's kitty", with a considerable amount of resentment. — They. saw it ‘as draining off money from the project grant system... The other area of tension. was within the NIH, where the Institute extramural staffs, including myself at the time, felt that this was a threat to the categorical concept and therefore to the individual Institute's categorical programs. So, this is a good example of tensions that resulted from an effort to do: “something other. than just simply support. ‘research through project grants. SS: Your. other point was that this was a Shannon idea based on Shannon! S per. “spective of possible adverse consequences to the institution as a whole, and- to medical education, if project grants were the only way in | which the NIH could support research and research training. - JS: Shannon's attitude was exemplified by an experience we had with MIT. Back in the early '6@s the engineers at. MIT had decided that they ought to organize a medical school. at. MIT and apply engineering concepts and approaches that. they thought could straighten out the health care system at. the Cambridge Hos— . pital. There was much talk about the possible establishment of an MIT medical 6 . co Nt te Qs - &, Vo school... Jerry Weisner was close to Shannon and asked him’ to. come up to explore | this on a retreat with some of the senior engineers and others on the MIT ~ faculty. Jim, Joe Murtaugh and I. spent about three days with then. Jim gave _ one of the most lucid. explanations of what is involved in a medical center in terms. of .research and education and. patient care. The thing I've always .remem- - bered about that, which I think is an absolute truism, was when:he outlined on™ the blackboard a message that in the area of research: and education, you can “call the shots" fairly well from an. institutional point of view, and there-— fore” contrel your destiny to a large degree. Even though Shannon felt.at times — _ that medical «schools had taken on more research than was justified for their . education program,. nonetheless -he accepted it because he felt that. there was reasonable. control. He told us, basically, "Once you get into: patient care, the control of your destiny shifts to the community, or to those. consumers. who _-look to you for the provision of. care". I've often thought about that from my position here, because the schools and teaching hospitals try to compete. with comunity hospitals and therefore the faculties are now increasing primarily on the basis of service needs rather than for educational requirements. That broad sensitivity and vision of Jim's was absolutely crucial to the quality | and - productivity of. the research Program, § as well as how it fit into a broad scheme of health activities. : : 88: Well, he certainly did have that enormous range of view. Expanding National Capacity JS: when Shannon realized that ‘the money .was going ‘to continue to flow, and in. relatively copious amounts, - and he and others in the science field felt that there could and should be an expansion of the nation's -scientific capa-_ ~ bility, - he devised a program called "health science advancement awards". This ‘was an effort:-to upgrade an ill-defined group of institutions that weren't quite in the first rank of research-oriented academic institutions. He decided | to. set up a program that would try to identify that group of ‘institutions and give some large sums of flexible money with the express purpose of upgrading _ the research -.and = research training capability of that group of institutions. ‘This was the first instance in which one couldn't define the process clearly; how to set. up review criteria, for example. I remember: the. National Health Council. meeting where Harold Enarson, then president of Ohio State University, just gave. Jim hell because this was "a bureacratically dominated, poorly defined program that was giving money to a favored few", and so on... It was finally. abolished with only a total of eleven grants awarded. The objectives. were reasonable and probably desirable, but the ability to make the effort into a real operation was never realized. SS: What kinds of grants did the NIH have the most control over? Looking at the review. process, we know that, even’ though there was always the two-tiered review, experts had the most influence on project grants. But I assume that some of the other efforts you've mentioned were designed in such a way that made it easier for the agency to achieve its objectives. The Role of Contracts JS: There really wasn't any grant instrument available in that area, Steve. wd es Ne Wy That! s why the contract played an important role and should play a more impor- tant role than it does now. ‘The only problem was’ that the contract mechanism ~ was at least confused if not ill-used in. some instances. There were allega- tions of favoritism, especially in the relationship between the use of the contract mechanism. and intramural. scientists. Originally the " contract had © been used at NIH solely. to provide additional resources, like the provision of chemicals that weren't necessarily. available on the open market. When the -. cancer program started to expand back in the mid to late 1969s, some of the | » intramural people, having access. to the contract mechanism, built huge empires -- only about four or five of them -—- but there was a lot of criticism that the intramural people were placing _ the extramural people at a-disadvantage © . because the latter had. to compete through” the project grant. system. ‘The contract instrument was solely under the control. and authority. of the bureau- crats -— the intramural scientists or Institute directors -- and many felt it was being misused. SS: I never knew that contracts were made with intramural scientists. -JSs Not with | them directly. put they controlled ‘the process and "thereby controlled a good deal of money. SS: . But the National Cancer Institute didn't make a contract with an intra- . mural scientist? : JS: No. It was the fact that the intramural scientists’ program had access to external capabilities through the contract mechanism. In my mind, a good Institute director needs an instrument of that sort to which he has access, in contrast to the grants program whose scientific direction is primarily in the hands of the biomedical community. I think the system ought to provide a cap- able program manager with a degree of managerial flexibility that the grant system denies him. Therefore, the contract could serve the overall strategy of. the program manager well, and it has. I don't think that it is conceivable — that one could. run-a good grant program and have it as something other than a- passive . instrument for the program manager. Although an Institute director is in charge of a program, he has little control over the direction of ‘the grants program. He has little control over his intramural programs also, because the intramural program functions largely like the extramural component as far as its scientific content is concerned, even though the monies flow differently. Therefore, if the director takes a look at his overall program, perceives an area. that offers promise and needs to be pursued, the only way he can do that on his own initiative is through an instrument under his personal control, like the contract. Thus I have always felt that ideally the NIH program would: consist of a small but strong contract | Program in addition to the intramural and large extramural components . Means and Tools Available to Institute Directors SS: There are Some other 1 means by ‘which a director can influence direction, I would assume .- 7 ‘JS: You have "REA'S", requests for applications. SS: | would he have any authority or money to call a \ conference like they used to do in earlier years? wy O JS: No, not a “great deal. Most of the conferences. are supported through grant ~ money, but on the other hand, a whole galaxy of mandated advisory bodies have © grown up that aré statutory bodies. I don't have intimate knowledge of how — they operate, but I have the sense. that they're controlled as much by the: community as they ‘are by the director, just because of the fact that they have - -.. been put in legislation by virtue of. the pressure from . lobbyists on: the out ~ side, : . . : SS: - Are yb saying that the intramural. scientists still have the greatest control over the contract program? gs: “Now The alleged abuses resulted in considerable changes.’ In previous days, there was a virologist whose research was funded probably 98% with contract money, quite in contrast to the usual intramural scientist and his access to resources. SS: Obviously there has been some push and pull over that. I ‘have always thought that the director of an Institute should be in a better position to see research needs than anybody else in the country. Even if that is true, - but they have no authority or money to: do. anything about it, that would Seem _ _.to be a waste. : _ JS: 1 think an NIH Institute director these days has. ‘surprisingly little au- - thority over what. happens in his Institute. That is further exacerbated now by something we're trying to explore, namely the apparently lessened degree of managerial flexibility at NIH. Restrictions are imposed by. such things as Congress specifying a fixed number of competing grants to be awarded, which is established at the NIH level, but then has to be divided up among the 12 In- stitutes. Also, the’ Office of Management and Budget has now changed its -apportionment -process. Instead of the simple one that obtained for years that said, “Here's the appropriation for X Institute divided into four parts of, re- latively equal magnitude," and then said to the Institute, "0O.K. You have this much money to. spend and no more than that for this period," now it is my un- derstanding that they require an internal allocation of that quarterly appor- . tionment by activity, that is, research grants, training grants, contracts, ets. The combination of the two types of specifications is very restrictive. °. _§S: And they're making this kind of division each quarter? JS: Right. SS: ‘that would mean the director has very. little control.. Pretty soon we could. put it.on “automatic pilot"! That's an unfortunate situation. Can you think of other examples of difficulty where the established mechanisms 5 simply - didn't encompass ‘a new situation, or where controversy arose? JS: One issue had to do. with the ‘training area, with a period between the completion of traineeship on a training grant or fellowship, and the indivi- dual's established role as: a researcher within the institutional framework. There is often‘a gap of a few years there that is very crucial in the transi- tion for. the. individual. ‘There was a great deal of concern in the late ‘50s — and. early —'68s about how you stabilize investigators and faculty members. The first effort was. in the form of "career professorships", which went well until wy om oe some of the institution people felt: that - it was a threat to their autonomy in. terms -of faculty management. - ‘Who would do the appointing? The federal agency the school, in the normal academic process? And so the desirable objective - . OE finding a way. to provide the institution with some money for designated individuals on a career basis wound up causing a great concern, to the point. that there was. finally. a meeting where Sidney Farber got up and walked: out, back.. to Boston, because this concept had been largely his brainchild, and he was. seeing his idea go up in flames because of the criticisms. That program — just barely got off the ground before’ it was halted. (except for the -conmit- ments that had already been made). In that case, an attempt by the NIH to do ‘something. for the institutions to fill a very real gaP in faculty support got a very negative response. S820 “Apparently only the Pope has the authority to. intervene in institutions . of higher education in. this country! . JS: Of course, NIH has: maintained a career development award. which is time- limited. | They also introduced.a series of other clinical investigator awards ~~ to try to bridge that apr and those have worked well as far as I know. - Geographical Distribution ss: How were discussions of geographical distribution handled? There had to. . have been. some,. because members of Congress put pressure on every agency of the goverment to spend money on their states or districts. Was. there a sense o£ the inevitable evolution of a major biomedical research program, financed through the extramural program, that would finally encompass all. good — institutions in the country? . os St No, there \ was remarkably little political pressure | at. NIH, Steve. It raised itself aS a worrisome spectre once in. awhile, but the only area where geographical distribution was a factor was in the construction program, where there was a general sense to try to spread the money across as wide a geogra- " phical range as they could. There weren't definite allocations on a regional ‘basis, but geographic considerations entered into the review of the awards. _ In. other areas, in contrast to other federal programs, there wasn't more men- tion about the distribution in Congress, due in large part to the attitudes of | people like John Fogerty and Lister Hill and a willingness of people like Bill Carey of B.O.B. and Jim Kelly and various secretaries of HEW not to contamin~ ate the NIH operation by that requirement.. I think a perfect example of that is . Fogerty. He really didn't try to do a lot for the state of Rhode Island as far as NIH was concerned. . SS: You can't say the same for Lister Hill. JS: True, to some degree. . But you know, it's interesting that Senator Hatfield, during the "pork barrel" debate cited Magnuson's contributions to the University of Washington, but except for a couple of non-university activities out there, the Hutchinson Cancer Center, and maybe one or two other things, those things:all went through the regular process. © Though Maggie took great pride in. what went on out there, I. don't think there is evidence that _ his influence and position resulted in much unwarranted diversion. of funds to the University of Washington. 19 Se 3 w oY Impact of NIH on Education and Research: SS: Can we talk now for awhile about the impact of the National Institutes of Health, particularly the grants program, on the development of a national network. of.. health science education and scientific research centers? Where - would we be in 1986 if we had not had for 48 years a growing program of grants to individual researchers and. institutions in biomedical sciences? JS: I don't think there's any question about the “impact, of the NIH grants program on the institutions. The network of academic centers would hardly be -of the same size and same quality as we have now. If one reviews the history of the evolution of these. institutions, it's fascinating to ponder the proba- bilities. First, the acceptability of the NIH grants program and the way that it emerged in a non-institutional. nor individual threatening way paved the way for the developments in biomedical. research, and for later support by the. federal government for the expansion of the production of physicians and other. health - professionals that certainly wasn't politically acceptable earlier. We. had at least two major benefits as a consequence of the. NIH grants program not. only . being created and growing, but also in its operating ‘withing a framework that was non-threatening. IT think it is important. to make a distinction between substantial influ- ence and dominance. There was a myth for awhile that there was not going to be much influence except in the scientific sense of quality, and an increase in the output of new knowledge . But it certainly avoided any kind of domina- ~ tion, .8S:- As you suggest, that made it easier than for the. federal government to support. medical education in a variety of ways. The old argument was even in the 1958s that once you let the. federal government get a toe in the door it. would take over completely and dictate everything. You've been at the AAMC for twelve years and were at the NIH a long time before that, so you've seen this - growth from both sides. Over the last twelve years, has the role of NIH grants -changed as a part of an institution's overall activities? JS: I think it's changed in a couple of major Ways. The most. prominent one is the fact that the rise of practice-plan income on the part of clinicians in these institutions is now the fastest growing source of revenue within the total institutional budget , replacing the. NIH money in the total operating budget. SO SS: In the '6@s and early part of the '79s was NIH the dominant component ? ~ JSs Yes. It varied tremendously from school to school, but in the aggregate at the national level, it was a dominant. feature of those operating budgets. SS: To that extent, schools planned for the expansion of their research acti-— vities,, or at least made it possible for then to expand, and I take it today that is not. the case. There is only stable if not static support. Are insti- tutions struggling to maintain the appropriate level of biomedical investiga- tion? —— JS: Oh yes. I don't know of any institution that ‘doesn't: aspire to have a stronger biomedical research base than it has, but you are. correct in viewing 1l wa NU the situation as one ‘OE. considerable stability at the moment , not only in- terms. of. the size of the enterprise, but more importantly in terms of which -institutions. within that - GEOUD, command the largest: part of the NIH extramural — puget « Financing Clinical Trials $8: Has ‘there | “been any shift towards - more clinical research as opposed. to more fundamental research? _ . ee JS: No, I don't think ‘one can: say that. As a matter of fact, one of the big “concerns a..number -of us inside and outside NIH share at the moment has. to do with the question of program balance at NIH among the various types of activi- ties and what that means to the institutions. As you know there has always been, particularly in the last fifteen years, a growing debate on how, for - example,» clinical trials ought to be financed: Should they be financed by NIH or by some other source? In those: areas questions are ‘still unresolved. ~ $$: For medical schools and their ‘teaching hospitals, with the new, most im-. portant. growth element being payment ‘Plans, the dominant element consists therefore of patient care? JS: I find myself a bit ambivalent about that, Steve, because of, first of all, the success of medical research funding in the last few years; research © has struck a responsive note in the Congress and we've had better increases, even in very difficult fiscal times for the federal government than was true in the late .'7@s and early '80s. Second, it seems to me that there remains, even despite the fact that the only real expansion that's taken place within - medical school faculties. has been for clinical purposes, recently there is still a very strong: emphasis on research in those institutions. Tt still fi- gures very prominently in such things as promotion patterns and things of that sort. What changes will take place will probably be marginal in the size and other characteristics of the research programs. It is still unclear what's going to happen with respect to industry. The uncertainties range all the way from the impact of the tax legislation to attitudes within the institutions as to. how to sort out the relationships between academia and industry. Again, I think the impact will not be major.-~We're still. looking to the federal govern-. ~ ment as the primary source of support for biomedical research, and those in- stitutions are still going to do whatever they can | to promote it. For-Profit Hospitals SS: Another new element is the for-profit hospitals, particularly the large chains. Some of: those have now become affiliated with university teaching hos- - pitals. Is that something that will have an affect? JS: Ir think that has pretty much run “its course. There was a big move a few years ago that was a matter of considerable interest to our Assocation, be- cause with the effect of the prepayment. system and concept, and the growth of _ the for-profit chains, we wondered how many of our flagship hospitals. would be _ taken. over or would be managed by for-profit organizations. All of a sudden the whole situation within that communi ty Changed . They stopped buying 12 Veo. hospitals and. went ‘into insurance programs and other pre-paid activities. Now some of the major ones: run have been running into hard times... I don't. think © that in itselt . is going to be as much of a change agent to our institution as we perceived. ' $St If a major “research proposal was received by ‘a group of: clinical. resear— chers at, say, St. Luke's, which was being managed by. a _ for-profit group, would that make any particular difference? . jon” I don’ t think so. The. bigger ‘concern that we had Sag tho Shaceion field, which would. suffer because the relative stability, in the sense of - being able to count on. the federal government, is not really matched by a Similar commitment except in some.of the states through their institutions for - the education purpose.» Since the late '4@s, education. funding has been the > "third element" in these institutions; patient care, and research revenue always expanded before education, -even with the flux of federal money. So, when: those developments started to move to the profit groups, we were more “concerned . about the impact on medical education, particularly in the clinical group. Role of Industry SS: So, today you would say that the NIH grants program is in fact a stable element in health — science centers" planning in medical education. It causes the balance among the teaching, research and service functions to be as it has always been, with only marginal changes, and is still a major element in medi- - cal schools, but not the dominant. ruling one... “Can we talk more about industry? Tt is still amazing to me to see ela- borate stories about new breakthroughs -- including the most recent one ‘dealing with an AIDS-restraining chemical -- as if they were the exclusive province of Burroughs-Welcome or some other pharmaceutical company, without any. mention of the. role .of NIH in. supporting the basic research or helping coordinate the overall nationwide effort going on right now. Is that chan- ging? Is industry surging ahead with chemical breakthroughs? JS: Of course they are always . trying to do that. I don't know of any major leader in the pharmaceutical industry who,.if questioned, wouldn't say that they . are _truly dependent on the basic research supported by the © federal gov-— ernment. © Certainly, Ted Cooper of Upjohn and Bill Hubbard and.a number of the other pharmaceutical company leaders are on record that their well being and _ advances depend on that base. I think they are just as supportive, for exam- ple, as the Packard-Bromley Report of academic | science, although that is ~ broader than just the biomedical field. There is a recognition there that not ~ only should the country' Ss academic science flourish, but that those companies! ~ economic well being is dependent on that. SS: You | don! t see that-as a changing dynamic then. and specific advances or patented products are not indicative of a shift in the telationship between private enterprise and the fundamental research supported by NIH? JS: There is a statistically significant increase in the amount of money that industry ‘is putting into the pot that is outside of its own laboratories, but 13 I don't. think that presages any change in the relationship. However, the big area. of change that is still ‘unfolding is biotechnology, which has'a lot of ©: potential as far as application is concerned , in agriculture, medicine, etc. That is. now. where. the action is. _ Who was. in ‘control of the clinical trials relating to AIDS? JS: It has been shared, with ‘the Allergy Institute funding roughly nineteen "treatment evaluation units in centers scattered » around the. country. That is a good. - example o£ how industry and government and the institutions can work to- gether under the pressure of a very highly publicized public’ health threat. From what I. gather, all three of these groups mobilized quite rapidly in the cause of an AIDS cure. ~ SS: We were talking earlier about the question of who supports clinical tri- als. Has the ‘balance shifted there more to industry? JS: It depends on the area. Burroughs-Welcome has put a lot of money ‘into the clinical . trials, but I think the system is still heavily dependent on the fed- eral. government. Tom Chalmers, who used to be at the Clinical Center, and re-~ cently. retired as President of Mt. Sinai Medical Center in New York, has for a. long time pushed the idea that clinical trials ought to be funded by a tax on either the pharmaceutical industry or somewhere other than the research ~ budget. I.am inclined to agree with him on that. In the first place, they are big and expensive -—- to carve that out of the NIH budget almost exclusively | doesn't seem to. me to be good public policy. SS: . To carve out an increasingly large portion of an increasingly stable, stationary budget, is problematic. It's amazing that so many things now seem ready for clinical trials. It strikes me that one measure OF progress is the ‘number of clinical: trials going on right now. - IS: I think there isa good indicator available, and that is that, for exam- ple, in. our ad hoc group, which is composed of about 159 organizations that _ Support’.a.. single figure recommended for. NIH, about 2/3 of those are categori- cal organizations, and what they worry.most about is the fact. that there isn't . enough money. somewhere else, so they concentrate on the NIH budget for more clinical trials. . Yet, they are very supportive of a diversity of activity within the NIH framework. ~ But they want to see more in the way of clinical. trials. , SS: Is there. any demand or interest in making major modifications in the- grants program on. the part of institutions? JS: Every once in awhile you get some cry from the have-nots that there ought to be a different way, but for the most part, even among those institutions that. aspire to more research activity, there is very little pressure, except maybe once in awhile’ over facilities, to go outside of the present system for funding. . It's remarkable to me that these institutions are willing to play the risk of the peer review process in a competitive grants program. Even though I am’ sure every one of them would like to get more money, they aren't bucking the system in order, to do it, There has been a valid desire to find some way of getting a little more’ money into the biomedical research support grant, which was the - formula grant 14 ~ tied to the success. of ‘competition for projects. But again, the. amount of ‘money .involved isn't great. That program is funded for maybe $59-6@- million i -. per year, and I.don't know of anyone who would propose doubling that. It was > - started by Shannon back» in the early "69s. oe SS: The program ‘project grants: are » still intact? JS: .. They have waxed and- waned ; in part over the concern “about quality, and in. ee part. because sometimes it is an artificial forcing into a package that doesn't — make clear sense. Nonetheless, as far as I know, every Institute still puts a fair amount of money into Program projects. New Issues SS: What, in your judgment , will be the next round of issues Erom the medical schools' point: of view regarding NIH and the grants program? JS: . First of. all, I think they're going to be overshadowed by what happens with respect to the outcome of reimbursement patterns of patient care on these institutions and the attention that is going to generate. For example, one of the questions in my mind is how you sort out, in terms of control, whether the practice plan revenue goes in an academic or purely economic direction; whe- ther it remains largely in the school or in the hospital. That becomes a much ‘greater institutional issue that still needs:to run its course.” In the re- search area, it seems to me the concern will be in manpower uncertainties. It | - could be that. what people are referring to as a "glut" of physicians -- the - - output . is still climbing -- may overcome the current problems of the percep- - tion that there are too few physicians being trained for careers in research, particularly as clinical. investigators: The proportion, as well as absolute — numbers of M.D.s who are principal investigators at NIH, on NIH grants, has steadily fallen over the past decade. Most people feel that that represents a major area of concern, if that surplus of physicians doesn’ t turn that around , something else will have. to be done to increase the number. A second problem is indeed the question of how far you go in expanding . that research enterprise -- what is the optimal size, the ideal size? That is | a perennial issue. A third one has to do with the question of technology assessment and = the transfer - process. My sense is that the institutions are going to be the source of that type of activity. The Institute of Medicine is. now establishing a council on technology assessment. That may bring some order ' to what is now an uncertain situation as far as how the transfer process ~. |. OCCUrS. _ My». fourth candidate would be the relationship between the Congress and the NIH regarding macro versus micro management. There are two new bills now _ pending in the Congress, one on Alzeheimer's Disease and the other on pulmon- ary diseases. It's another manifestation of Congress' desire to exert more - control over medical research: every time you enact one of those pieces of legislation, despite the general agreement. on the objective, you further impinge on managerial flexibility in the agencies « So. that is a very signifi- cant: issue. “I must say, I get mixed signals about this. In that article that. ap- peared in the Times a few months ago on the Hughes Institute, centered.on the 6 “change of attitude. at vale, the vale people, after negotiating with Don Fred- os rickson, felt = much. more at ease about the Hughes approach to their funding -. biomedical research than had been. the case before. On the other hand, I have ~ heard. from» other. places that the new adminstration at Hughes is getting more dictatorial, more insistant about following their pattern, ¢ of how they want the relationship to be. ss: How do they fund? They. are apparently trying to concentrate thei resour- . ces in certain areas, _ but what more? gs: What ‘they < do. is, in effect, set up within an institution (a non-federal one usually). a little Hughes operation; the investigators and staff are on the.. | Hughes. payroll, not the institution's, yet they sit in the midst of the insti- = “tution. and. the .institutions go after that money because it is . reasonably stable... How that will-all play out in terms-of the stability of the funding and. the relationship between those individuals and that activity and the rest -of the institution is one relevant question. SS: Do we know wnat the timing is for the burgeoning of their resources? JS: > It is starting now. I think the money that they had to dispose of this - year was about double that of last year -- although I'm not sure which 12- month year that included, but it went up from roughly $199 million to $396 million or so. ce SS: “That is substantial, but it's not anywhere near the $5 billion that. NIH has, except that I think that only about 68% of that actually goes to the medical schools. Js: I think the other dimension, however ,, is the ‘fact that Hughes tends to concentrate by amount. and scientific area. — , . ; SS: This has been enormously helpful. ‘Thank you, John. ~ 16 “CURRICULUM VITAE JOHN F. SHERMAN, PH.D. "PERSONAL ee ‘Date of Birth: September 4, 1919 Place of Birth: Oneonta, New York Marital Status: Married, Two Children Education: - February 1946 - June 1949 Union University College of Pharmacy, Albany, } NY B.S. - June 1949 (Cum Laude) September 1949 . - January 1953 Yale University, New. Haven, CT a os Ph.D. - June 1953 PROFESSIONAL EXPERIENCE February 1987 = present . Executive Vice President, Assoc. ‘of Am, Medical Colleges. March 18, 1974 - | Vice President February 1987 ~ . Association of American Medical Colleges, _ Washington, D.C. (March 18, 1974 to June 30, 1976 - also Director, Department of Planning and Policy Development, Association of American Medical Colleges) November 1, 1968 - Deputy Director : — March 15, 1974 National Institutes of Health, Bethesda, MD (January 22, 1973 .- May 29, 1973. - also Acting Director, ‘National Institutes of Health) _ January 1, 1964 - Associate Director for Extramural Programs October 31, 1968 National Institutes of Health, Bethesda, MD January 15, 1962 - ~ Associate Director for Extramural Programs December 31,.1963..- = National Institute of Arthritis and Metabolic . ' Diseases, NIH, Bethesda, MD : ~ July 1, 1961 - Associate Director for Extramural Programs January 14, 1962 ~ National Institute of Neurological Diseases. and . “Blindness, NIH, Bethesda, MD October 8, 1958 - Deputy Chief, Extramural Programs © ~. June 30, 1961 -.. National Institute of Arthritis and Metabolic | Diseases, NIH, Bethesda, MD August 8, 1957 - . —_ Assistant Chief, Extramural Programs October 8, 1958. National Institute of Arthritis and Metabolic Diseases, NIH, Bethesda, MD july, 1956 a August 1957, = sisday V368 wo July 1956. MILITARY AND UNIFORMED SERVICE: HONORS- AWARDS: 2 “Assistant to the Chief, Extramural Programs”. National Institutes of Arthritis and Metabolic... Diseases, NIH, Bethesda, MD Research Pharmacologist, Laboratory of Tropical. Diseases. National Institute of Allergy and Infectious Diseases, NIH, Bethesda, MD ee Private to : Major. Army of the United States February 1941 - 1946 Commissioned Corps - ‘U. S. Public Health. Service, Assistant Scientist (Lieutenant J.G. ) to Assistant Surgeon | General (Rear Admiral) January 1953 - November 1968. Decorated Bronze. Star, Army of the , United States. June 1945. = Meritorious Service Medal, US. Public Health Service -- Commissioned Corps, 1965 oo _DHEW Distinguished Service Award, 1971 “DHEW Secretary's Special Citation Award, 1973 National Civil Service League Award for Distinguished Career Service, 1973 Honorary. Sc.D. Albany College of Pharmacy, Abany, NY. 1970 Distinguished Alumnus Award, Union University Pharmacy College Council, Albany, New York, October 1974 Feltow of the American Association for the, Advancement _of Science. (AAAS), 1982 OTHER ACTIVITIES: 41976 = 1976 - | 1978 - 1982 1979 - 1981 1980 - 1982 1976 - 1978 1978 - 1983 November 1975 - December. 1976 ~ January 1977 -- . November. 1979 December 1979 July 1976 . June 1979 July 1979 June 1980 January 1985 Member, Panel on Clinical Sciences (National Research Council - Commission on Human Resources/National . Academy: of Sciences) Member, Institute of Nedicine, National Acadeny of Sciences Member, Membership Committee, Institute of. Medicine, National Academy of Sciences Nenber, Committee on Federal Research on Biological and Health Effects of Ionizing Radiation (National. Research Council - Assembly of the Life Sciences/National Academy of Sciences) Member, Advisory Committee, Five-Year Outlook Project, - (American Association for the Advancement of Science) President, Coalition for Health Funding, Washington, D.C. ~ Member, Board of Directors, Coalition: for Health Funding, Washington, D.C. ‘Member, Board of Directors, National Society for Medical ‘Research, Washington, D.C. Vice President, National Society for Medical ‘Research, Washington, D.C. President, National Society for Medical. Research, Washington, D.C. Member, Biomedical Library | Review Committee (National - Library of Medicine), Bethesda, Maryland = Chairman, Biomedical Library Review Committee (National Library of Medicine), Bethesda, Maryland Member , Research Programs Advisory Committee, National Multiple Sclerosis Society PUBLICATIONS: “Taylor, D. J.3 Sherman, J. F 3 and Bond, He We "“Amebacidal Activity of Puromycin in the Guinea Pig," ~JACS, 76, 4497, 1954. Taylor, D. J. ; Bond, H. W. ; and Sherman, J. Fey ore : "Puromycin. I. Activity Against Experimental Amebiasis," — Antibiotics Annual, 1954 - 1955, New York, Medical Encyclopedia, Inc., p. 743. “Bond, He We » Sherman; J. F.; and Taylor, I D. J: ’ ~<"Puromycin. Il. Effect on Structural Changes on. Amebacidal Activity," Antibiotics Annual, 1954- 1955, New. York, Medical Encyclopedia, Inc., p. 751. Sherman, J. F: ; Taylor, D. Jd.3 and Bond, HL W. “Puromycin. II]. Toxicology and Pharmacology," Antibiotics Annual, 1954 -. 1955, New York, Medical Encyclopedia, Inc. p. 757. : Luttermoser, G. W.;. Bond, H. W.3 and Sherman, d. F. "Chemotherapy of Experimental Schistosmoiasis.. 1V. Oral Activity of Antimony Trichloride Antibiotic Complexes," Proc. Soc. Exp. Biol. and Hed. » 205 122, 1955. Sherman, J. F. oO . "The Binding of Puromycin by Plasma Proteins.’ Antibiotics - and Chemotherapy VI, 116,. 1956. Sherman, J.. F. “Enhancement of the Central Nervous ‘System. Effects of Strychinine and Pentobarbital by. Diphenhydramine. " Science, ‘123, 1170- 1171, June 29, 1956. “Greenberg, Joseph; Taylor; D. J.3; Bond, H.W.; and Sherman, J. F. "Toxicity of Amine-Extracted Soybean Meal," Agricultural and Food Chemistry, Vol. 7; No. 8, p. 573, August 1959. Reinhard, K. R. and Sherman, J. F., , "Administration: Continuing Challenges, Maturing Capabilities," Sponsored Research in American Universities and Colleges, _ #p. 76 ~ 90, 1967. Kennedy, Tt Je, Jr.3 Sherman, J. Fis ‘and Lamont- ~Havers, R. W. "Factors Contributing. to Current Distress in the Academic: Commun’ ty." Science, 1975, 599: 607, February 11, 1972. Sherman, Q. F., . “Public and. Private Sector Institutions: Their Interacting Roles in Setting Public Policy," Annals of the New York Academy of Sciences, Vol. 260, Pages 4-82, October 3, 1975. ’ Sherman, J. F., ° "Deterrents to Excellence in the Biomedical Sciences and Some Suggestions for Change," Second Macy Conference on the — Biomedical Sciences, 1975. ee Morgan, T. E33 Keyes, J. AL; and Sherman, J. Fe, oe "Confidentiality of Research Grant Protocols,” Clinical ~ Research, Vol. XXIV, Number 1, 1976. — Sherman, J. Fey | ee URS "The Organization and Structure of the National Institutes. of : Health ‘New England Journal of Medicine, 297:18-26, July 75. 77. _. . a me Sherman, J: F., TS oe "Toward an Adequate Pool of Clinical Investigators," Perspectives in Biology and Medicine--Clinical Research: Elements for a Prognosis, The University of Chicago Press, - Vol. 23, Number 2, Part 2, Winter .1980.. oe Sherman, J. F., : oo "Health Care Technology," Journal of Medical Education (Publication of the Association of American Medical Colleges), Vol. 55, No. 2, February 1980. Sherman, J. F. a a . "A Washington Perspective on Biomedical and Behavioral Sciences, A Special Report,” Trends in NeuroSciences, ~- Yolume 4, No. 5, May 198). Sherman, J. F.; , a oe ’ "Challenges to the Use of Animal Models in. Research, Education and Testing," Transactions and Studies of The _ College of Physicians of Philadelphia, Medicine and History, Series, Volume VII, No. 4, December 1985.