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C HAR'V'ARD MEDICAL SCHOOL BOSTON. NAIASSACHUSETTS ©211I5' OFFIICE OF TH'E', DEAN December 13, 11978' Wil'liam' Shinni, Esq,. S'hook, Hardy & Bacon 1101 Walnut Street Ransas City, Kansas 4106 Dear M'r. Shinn~: We have over the past several'months been eng;agedin resolving issues related to: the continuation of the research supported by the tobacco industry under Dr. Crary Huber'"&di;rection. I thiiink we 'now have a proposal which may solve most, if'not all, the known problems and which fits within the suggested five-year fund'ing limit of $4,090,0i79., A matter of'primary concern has been the idientification of suitable facilities toe house the researchi., After consi~dering, ainumber of al'ternatives, Dr. Huber has concluded that the best available optionlis to house h~is research in three locati'ons: OharIlesgateWest - animal qpartersan' associatedi. Iaboratories;Harvard School of Public Healthi- existing, analytic chemistry' laboratori:es. for Dr. First and'his associates; and' Mt. Auburn Hospital - offices andl]laboratories for the remaining aspects of Dr. Hiuber"s program,, including hiis: clinical research. With the exception of Harvard School of Public Health: space, extensive reconstruction will be required to: create appropriate laboratory and animal faciIlties. Plans for renovation of'the Charlesgate and'. Mt. AuburniHospital facilties are attached.: The total cost is estimated at $'11,1I40,000,, includling. $103',0001for essentiaL building, repaiss: at the Mt. Auburn Hospital and $184,0!00r for renovation of laboratories toibe used by other researchers at the Hospital. Dr.Huber prepared' the following d'irectcostbudget estimates for his industry researchi, includ'ing,the tobacco industry share of rent and taxes for the Charlesgate faciDity (estimated by Dr. Huber to be 651 of the total). In~ addition, Univ'ersity policywouIld~y asseas overheadla!ttheappropriate ra~tesfo~r each research location ('no overhead is computed onieqpipment purchases) and we have included ov!erhiead accord'ing,to the policy in the.following budget. 0 ~ O V'

William Shim„ Esq. December 13,, 1978 Page 2' F~ive-Year Budget Proj',ections CHARLESGATE FACILITY' Personnel (includ'ing,fringe benefits:) $ 422,691 Other expenses 229,288 Rent (65% ~ of to~~tal) ll~17',000', Taxes (65% of total!) 65',00C1. Dilrect Costs, 833y,97'9~ Overhead (25%) 208,495 Tot a 1 $~~1, 04~~2'~,,47~4 ~ HARVARDSCHOOL OF PUBLIC HEALTH' P'ersonnel' (including fringe benefits) $ 117,711 Other ex~p~e~ns~~e~s 43~, 469'~ Direct Costs 161',,180 Overheadl(42%) 67,696 Total $' 228,876: C MT. AUBURN ' HOSPITAL Personnel (including fringe benefilts) $1,410,791 Other expenses 52'9,93A! Equipmenit 3:67,695 Direct Costs 2,308,416 Overhead (70.17.) 1,360',445 Total $3, 668',,861 TOTAL 5-YEAR BUDGET ESTIMATE ($'3,303,575 direct•, $1,636,636 overhead), $4,940,211 This total ($4,940,211) is somewhat greater than the proposed' industry support. Further, it does not include funds required' for the provisionlof adequate research facilities. 03750574, However, if only the d'i'rectcos~tportion 03'y,3031,57'5')~ of the potential $!4,,0901,079 of industry' support is considered, the balance of about $786,500' could be applied' toward' the $1,140,000 of renovation costs. In additiion,, the M't. Auburn Hospital will pay for essential repairs to the C'lark Building

Willi'am, Shiinn, Esq. December 13,, 19'78 Page I ($1'03,000:+ an emergency generator)' and would repay over a five-year period' the costs of renovating laboratori:es~for other hospital researchers ($1i84,000. Accordingly, the net renovation cost for the project wouldibe about $853',0001, leaving, a deficit of approx~imately $66,500'.. Ad'ditionally, in consid'erationof the establishment of researchh facilities at the Hospital, Mt. Auburn has agreed to provide to Harvard'for the further support of' Dr. Huber"sitobacco industry research program a sum derived from the overhead reimbursement received by the Hospital! during,the five-year period as a result of Dr. Huber's non-tobacco-companiy supported, research. These funds would be.usedlto "'repay" the expenditure of'about $,1127,5001for renovations of space,to be used by Dr. Huber for non-tobacco industry supported research. These funds would be sufficient to meet the defi',cit for the renovations and leave a smal!ll surplus. Harvard iswiliLing,to!leave!thelev~e1 of overhead reimbursement in connection wittithe proposed grant from the tobacco industry as an item to be negotiated toward the end of'the!grant period'' when the amount of funds available for such, purposes canibe more readi~lly d'etermined.. Negotiations with the.Mt. Auburn Hospital around Dr. Huber's proposed program are essentially complete.and are described below. The Hospital''s. Trustees are expectedl to approve.these arrangements formally within the next several weeks. 1. the H'ospitali wi11 allocate for renovation for Dr. Huber's use the required space in ttie Clark B'u!i ldiing ( 3rd f Loor and' basement )' and' in the Central Support B'u~ilding,for ai five-year period with.an option to continue its use for amadditional' five-year period; 2'. during, the first five-year period, the Hospital will forego overhead on the tobacco industry program and, will make no charges for rent, utilities,, maintenance, etc. ; 3'. during the first five-year period', the Hospital will contribute to Dr. Huber"s!tobaccoind'ustry're~searchlaccou,nt at Harvard an amount equal to, overhead reimbursement it receives.on other sponsored' research being,conductedg by Dr. Huber or his associates in Hospital space up to approximately $127,500 (This figure represents the 35% of the renovation costs for Dr. Huber"s Mt. Auburn space rahich wil~l, be usedr for non-tobacco-industry supported research; 4. the H'ospital, and Dr. Huber have agreed upon a memorandum off understanding outlining,Dr. Huber"s!relationship~totheHospital;~ ~3115Q.575 5. the Hospitali will pay for the essential general building,repairs for the Clark Building (elevator, roof and emergency generator) in an amount estimated at $103,000 plus the cost of an emergency generator)';

William Shinn,, Esq. December 13', 197& Page 4 IC 6. the Hospital agrees to: repay the.Harvard' "'tobacco industryaccount" over'thefive-yearperio& for the renovations to be undertaken in the Clark building to provide laboratories and' offices for other Hospiital personnel (estimated at $184,000). Finally, the matter of continuing Dr. Huber's appointment at the Medicall School has been resolved. Sinceheisnearing,theA1-year limit for non-tenure academic appointments, the Deanhas agreed' to an administrative extension of his current appointment for the five-year period'in question. Dr. Huber, in return, has agreed to remain at Harvard iniord'er to manage the tobacco~industry~supported program., These arrangements would seem to me to provide aproductive and secure setting for Dr. Huber and his associates in which they may continue their work for the comang,five years while remainingwithin the proposedfunding level. I would hope that we could negotiate the new five-year agreement along these lines to begin January 1, 1979. I believe we in agreement that an essential part of such negotiation will be the matter of satisfactorily conclud'ingthe present agreement with Harvard whichiincludes settlement of obligations assumed by the Beth Israel' Hospital amd,H~arvard'. Medical School. Unireimbursed, expenditures under this present agreementtodateexceed$450,000 andare estimated through December 31 to be about.$700,000'. An up to date and detailed accounting of these costs will, be!made available at our meeting. I look forward to meeting with youi and representatives of the industry as soonlas we conveniently can arrange it. With bestpersonal regards, Sincerely, I Henry G. '~eadow Dean for P~Ianning and. Special Projects cc: Dr. Gary Huber