It's a sign of desperation. One reason there have been so few drug breakthroughs lately is that the profit motive actually works against the development of new pharmaceuticals. Drug companies suffer from blockbuster-itis, the belief that only billion-dollar almost-sure things need apply for development. As a result, even the most brilliant discovery may not be translated into a drug unless it has 10-figure sales potential. Also, short time horizons on the part of venture capitalists, who generally want to see their biotech bets pay off in three years, don't mesh well with the lengthy drug-development process.But the complicated business of moving a drug to market involves clinical trials as well. Perhaps nowhere else is the glacial pace of development slowed further than in academic medical centers, where highly-regulated Investigational Review Boards with over 20 members need to approve clinical trials before a research project can commence. While the well-meaning intent of such IRB's is for patient protection, more and more companies are moving away from academic centers in favor of busy clinical practices whose investigational oversight is less stringent, and approval process can takes weeks rather than months.
Academic medical centers desiring to participate in such trials need to appreciate the competitive disadvantage that they, too, are missing in the high-stakes world of clinical research. Maybe they, too, would then be privy to some of the "venture philanthropy" that exists in the marketplace.
Reference: WSJ 26 Jan 2007, Section B1, "Why Non-Profits Fund For-profit Companies Doing Drug Research."