This article originally ran in the May 29, 2009 issue of the Nassau Weekly.
Four years ago this June, Shirley Tilghman told Princeton’s graduating class:
During your time at Princeton, many of you have been moved to speak out on issues of social and political importance, from the moral significance of a pre-emptive war, to the pros and cons of senatorial filibusters, to the needs of low-wage workers on our campus…As you prepare to leave Princeton, I trust that the social and political consciousness you have cultivated here will give you the conviction and the courage to take a stand against tyranny and injustice wherever it arises.
This sounds like a pretty standard sentiment for a university president to express at a commencement ceremony but does it accurately reflect the manner in which Princeton affords its students a chance to build a social and political consciousness? On the eve of my own graduation, I’ve come to believe the answer to that question is no.
A Generic Example
Jon Dick lives in Florida and takes Alimta, a relatively new drug used to treat certain types of lung cancer and mesothelioma. Each treatment comes with a whopping $5000 price tag, of which Jon’s Medicare knocks off 80 percent. A New York City-based nonprofit takes care of the rest.
Others are not so lucky: Simon Dai, of Missouri, is billed close to $11,000 for the treatment, administered every couple of weeks; his insurance covers roughly $5000, he pays the remainder.
For patients in need of Alimta, or those struggling to find ways to cover its high costs, it seemed hopeful news that several generic drug companies have been preparing to manufacture and release cheaper versions. They will have to continue waiting, if Alimta’s maker, Eli Lilly, and the patent holder for the key compound, Princeton University, get their way.
Since last summer, the giant pharmaceutical company and the university have partnered on three lawsuits designed to block generic versions of the drug. In the initial filing for each suit, both claimed they “will be substantially and irreparably damaged,” should the companies be allowed to produce generics, which Princeton and Lilly consider patent infringement.
It seems evident what Eli Lilly and the generic companies they’ve sued have at stake in the fight—they are both institutions trying to turn a profit. In recent years the battles between big pharma and generic drug manufacturers—particularly those based in places like India—have become divisive, international political issues as poverty-stricken countries have turned towards manufacturing cheaper alternatives to brand-name drugs in their fight against rampant diseases with expensive treatments.
Large drug makers and some researchers feel, as Edward C. Taylor, the Princeton Professor Emeritus who invented the key compound in Alimta, told me in a recent interview, “its kind of like an effort to kill the goose who lays the golden egg.”
“In that sense, this business model could be called, actually, immoral. It has its political purposes, of course, because that lowers the price of drugs for the general public but at the expense in many, many cases of the blow to the innovators of the drug, to the whole field of innovation, because it’s a very, very expensive process to develop a drug and lose it to an attack by a generic,” said Taylor.
On the other side, groups like the AARP domestically and Doctors Without Borders abroad have argued for speeding the production of generic medicines. The crux of their argument can be summed up in the following excerpt from a 2003 column in The New York Times by Nicholas Kristof: “Americans are putting a priority on patents rather than patients, and that we are prepared to sacrifice sick people… so companies like Bristol-Myers Squibb can increase their dividends.”
The point of including this story here is not to ask where one ought to come down on the issue of generics vs. brand name medications, but rather to ask what Princeton University is doing essentially taking a policy position against cheap, life-saving generic drugs and falling into the decidedly corporate camp.
The decision seems to retread the dividing line between Princeton public image—the ideals that Shirley Tilghman might wax poetic about during commencement address—and the ways in which the university operates like a for-profit venture, replete with an aggressive public relations department, a Government Affairs office in Washington DC spending hundreds of thousands to lobby congress each year and a semi-autonomous investment outfit that discloses little about the assets and equities it acquires and manages.
Friends in High Places
Eli Lilly has told the SEC their arrangement with Princeton ensures the university a “single-digit percentage” cut of the sales of the drug in exchange for exclusive license to produce Alimta. Net sales for the drug topped 1.15 billion in 2008, meaning Princeton scooped up somewhere between roughly $11 and $104 million from their partnership with Eli Lilly. Beyond the licensing agreement, Eli Lilly has given the University $500,000 for an endowed graduate fellowship.
This is far from the only arrangement between Princeton and its friends in the corporate world.
Navigate over to the website for Princeton’s office of Corporate and Foundation Relations and you’ll find some 129 companies or subsidiaries “with which the CFR maintains ongoing relationships.”
On the list, a wide variety of finance, defense, oil, biochemical and pharmaceutical companies show up—everyone from British Petroleum to Citi and Goldman Sachs to Raytheon and Lockheed Martin and, of course, Eli Lilly. Companies with startling environmental pollution records like Occidental Petroleum and Exxon-Mobil are there too, along with companies known for their controversial dealings in poor countries like Bechtel, whose water privatization schemes in Bolivia led to the Cochabamba protests in 2000 and Monsanto, whose genetically modified seeds are notable for being designed to prevent collection after a harvest for planting the following year. Instead, a farmer using them will have to buy new Monsanto seeds each planting cycle.
Then there are companies not on the list. Take Schlumberger, an oilfield services company that has often and erroneously been called “the French Halliburton” when Schlumberger’s business exceeds that of Dick Cheney’s old stomping ground.
Princeton’s ties to Schlumberger go back several decades, when a company founded by Princeton researchers was acquired by the French-multinational in 1959. In 1991, according to a July 2004 report by a local paper here in Princeton, Schlumberger’s chairman, “invited Princeton University to develop a special relationship with the company that promised to strengthen both Schlumberger’s campus recruiting and collaborative research relationships with the University.” It’s a relationship that appears to continue to the present day, and is prominently featured on Schlumberger’s website.
Schlumberger is better known for its business dealings in Sudan and the controversy these activities have generated. Reportedly working in the country since 1977, Schlumberger began to receive heavy pressure from students and trustees at several American universities and from groups like the Sudan Divestment Taskforce in 2007. The Taskforce, an advocacy group calling for divestment from businesses working with the Sudanese government, initially rated the Schlumberger among the “highest offenders” although has since opened a dialogue with Schlumberger and taken it off its top offenders list.
In June 2006, Princeton put out a press release stating it had “no direct holdings in companies operating in the Sudan,” and that it would send letters to five companies “to determine the effect of their presence in Darfur.” Schlumberger was not among them.
In June 2002, the last time Princeton made public a list of its investments, it held $2,650,500 worth of Schlumberger stock, but even if it had dumped that investment by June 2006, the non-investment relationship between the two still existed.
Should Princeton be screening its investments and corporate partnerships? Last December I wrote a story for WPRB on Princeton’s investments in a British defense contractor called BAE Systems and on a disclosure by the University that appeared to indicate it had over $10,000 invested in Zimbabwe. The circumstances surrounding both are worth looking at.
In 2001, Princeton University purchased bonds in British arms supplier BAE Systems, essentially giving a $1.5 million dollar loan to a company whose dealings with regimes like Robert Mugabe’s Zimbabwe and Saudi Arabia have come under repeated scrutiny from investigators, journalists and activists.
In Zimbabwe, BAE has been tied to alleged efforts by arms dealer James Bredenkamp to supply the government with military equipment, potentially in violation of sanctions. In December, Bredenkamp, who The Guardian claims “acted as BAE’s agent in southern Africa”, had his assets frozen by the United States Treasury Department for his close relationship with Robert Mugabe’s regime.
For years, BAE supplied military equipment to Zimbabwe, a relationship that began in the 1980’s when the Zimbabwean Air Force acquired 12 fighter planes from British Aerospace, BAE’s predecessor.
BAE Systems has run into trouble elsewhere for questionable business practices. As of June 2007, The Guardian reported that the company had been investigated for alleged corrupt dealings in Saudi Arabia, Qatar, the Czech Republic, Romania, Chile, South Africa and Tanzania. In past decades, the firm counted the brutal Indonesian dictator Suharto among its clients.
When asked for comment, Princeton’s spokesperson Cass Cliatt told me that, “as a matter of policy, the University does not disclose the specifics of investment portfolio or its return drivers.” As the saying goes, every rule is made to be broken, because within a few days Princeton was saying that, since mid-2003, it no longer owned bonds in BAE Systems.
Not because, mind you, it might be bad form for an institution of higher learning to be invested in a company with questionable foreign entanglements or business practices. As Andrew Golden, the president of Princeton Investment Co., the body that manages Princeton’s investment portfolio, told me last December, “the fact these changes occurred had nothing to do with BAE.”
“There is nothing that prevents us from investing in defense contractors,” Golden said, adding that the manager who acquired the BAE bonds “thought it was a good economic investment.”
Right around the same time, I also reported that Princeton had declared having investments greater than $10,000 of investments in Zimbabwe on a federal tax filing. I later discovered that a filing prepared by Princeton University for the Robertson Foundation included the same disclosure. The form where this was revealed is a public document, among the key filings for any nonprofit and central to a tax-exempt organization’s ability to continue to claim all the benefits that come with their non-profit status.
After the report, PRINCO conducted “a lengthy search” and could only find a single investment worth about $.02 in Zimbabwe. Golden said he was “99 percent sure” it was the only one. Why was it declared on the filing, one requiring foreign investments to be declared at levels at or above $10,000? Golden suggested it was “an out and out mistake” and Cliatt suggested that it might have been listed because where “there’s any confusion” the University adopts a “conservative approach” to its filings. One must wonder which of the $.02 cents was gifted to the Robertson foundation, requiring their disclosure of the investment.
No Disclosure, No Problem
Since 2001, the Princeton has stopped allowing students to review its investments. There has been no explanation for this change in policy. When I interviewed Golden in December, he said they did not want to make the investment public as it was possible others might try to mimic Princeton’s portfolio and investment strategies, potentially bringing damaging the university’s portfolio. However, even Golden conceded there was no evidence this had occurred when the document was public.
Beyond that, Cliatt would tell me later, “members of the campus community with interest in these issues typically would not need to know whether the University is invested in Zimbabwe today to know whether they feel the University should be invested in Zimbabwe. And looking at a list of investment holdings on a given day can’t tell you what we’re invested in today. It tells you only what we were invested in at the time the list was published.”
In reporting the two stories last December, I was constantly being referred to a 1997 university document with a very long title: Guidelines for Resources Committee Consideration of Investment-Driven “Social Responsibility” Issues. The quotations around social responsibility made it easy to guess what tone the document would adopt.
Assuming one did decide that the University should not be invested in Zimbabwe, irrespective of any indication it actually was, the process described in the guidelines would begin, with students having to establish “considerable, thoughtful and sustained campus interest,” prior to the Resources Committee studying the issue. What considerable, thoughtful, and sustained campus interest means, however, is completely unclear because the Resources Committee defines it on a case-by-case basis.
The document did contain a suggestion of a litmus test the Committee might apply: “It may be appropriate, for example, to require that an issue be raised several times over an extended period of time, say two academic years. The Resources Committee will also consider the magnitude, scope, and representativeness of the expressions of campus opinion in making this determination.”
Which is to say that, in order to actually bring a matter concerning Princeton’s investments before the administration, a student would have to select an issue, unaware whether it had any relevancy to the investments the university actually had, organize two years of sustained activism and all of this simply to receive a hearing with the Resources Committee, who would, presuming they deem it worthy, refer the matter to another Committee. And that’s just the process for investments.
Should Princeton be working with companies to conduct research? It seems relatively harmless, until someone wants to manufacture a generic version of a miracle drug discovered at Princeton occurs and drags the non-profit university into a for-profit squabble.
What is the nature of the other 128 corporate relationships Princeton has? What is the research funding and where is it going? What does the university get in exchange?
The problem exists, then, on two levels: first, the university may be investing in and working with companies that do not fit with the goals the Princeton is so fond of praising, and second, that no information on investments or corporate relationships is made available to students, faculty or interested university employees.
It all adds up to damn any effort to evaluate what Princeton does with its student’s tuition dollars and its billions in endowment money, where that money comes from and what it gets invested in, before any such effort even begins.
So when Shirley Tilghman addresses my class, the class of 2009, in a couple of days, her speech will surely include a couple throwaway lines about social responsibility, political engagement, about speaking truth to power, righting some wrong or challenging some injustice, or any other number of clichéd, hackneyed phrases. Even if they’re a little grandiose, they are fine sentiments—they appeal to our better side as people and as a community. However, it is hard to see any of it as being more than a couple words trotted out twice a year—once in September, once in June—to get us through another year feeling good about old Nassau.
This article ran in the May 29,2009 issue of the Nassau Weekly; on June 2, 2009 Shirley Tilghman delivered her Commencement Remarks, “In Pursuit of Purpose and Meaning”. In the speech, Tilghman observed: “We are justly proud of the many contributions that Princeton faculty have made over the years…Emeritus Professor of Chemistry Ted Taylor’s development of Alimta, a drug that is now saving and extending lives of cancer patients… These examples, and many, many more that I could name, reflect Princeton’s commitment to being “in the nation’s service and in the service of all nations.”
