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With his checkered Wall Street past, Michael Milken may seem the unlikeliest of philanthropists. But he's also proven to be one of the best.
F. Scott Fitzgerald didn't actually say that there are no second acts in American lives, but if he had he might have changed his mind upon meeting Michael Milken. Infamously regarded as one of the faces of 1980s Wall Street greed, "Junk Bond King" Milken's role in what The New York Times called "the biggest fraud case in the history of the securities industry" eventually led to guilty pleas on six felony counts, $600 million in fines, and two years in prison.
But people and their legacies can be complex. For all the bad Milken may have done in the 1980s in the name of self-enrichment, the good he has done for others in the quarter-century since may have a far more significant and lasting impact and has earned him the nickname "the Man Who Changed Medicine."
That good takes the form of medical philanthropy, and it's a practice he began even in the midst of his illegal activity. Ten years into his Wall Street career, Milken and his brother Lowell founded the Milken Family Foundation with a mission "to discover and advance inventive, effective ways of helping people help themselves and those around them lead productive and satisfying lives […] through its work in education, medical research and public health." By 2004 no less an authority on the business of medicine than Andrew von Eschenbach, then director of the National Cancer Institute, to gush that Milken had "changed the culture of [medical] research […] He created a sense of urgency that focused on results and shortened the timeline. It took a business mindset to shake things up. What he's done is now the model."
As a child Milken rode his bike from house to house collecting money for the American Cancer Society. But it was about 20 years later, when his mother-in-law was diagnosed with breast cancer and then doctors pronounced his father's melanoma terminal, that Milken's charitable avocation crystallized.
"I went to visit almost every major cancer center in America with my father," he recalls. "And I concluded in 1976 that science had not advanced to the point…. [A]ll of my economic theories had proved successful; and there was nothing that I ever tried to achieve that I had not achieved. [But] no matter what I could do, whether it was refinancing a country or a company, whatever I could do, I could not save my father's life. It was a very sobering experience. Instead of rejoicing [at economic successes], it was the realization that I did not have enough time or the ability to move science fast enough in the 1970s to save my father's life. That really focused our philanthropy on medical research."
The 1982 founding of the Milken Family Foundation was the silver lining added to these clouds of misfortune. Not surprisingly, right out of the gate the foundation was focused on advancing the cause of cancer research. Through businessman's eyes Milken saw that a barrier to that goal was that young researchers were underfunded (he notes that the average for first-time funding from the National Institute for Health is 42 or 43, while most quantum leaps in medicine and other sciences emanate from individuals in their 20s), and that the best young researchers were often tempted out of their labs by more lucrative business offers.
For the remainder of the decade Milken would pour a considerable portion of his staggering personal wealth into the foundation—according to the Los Angeles Times, $196.4 million in 1987 alone—making it the 48th largest charity group in the U.S. and establishing the momentum that would help it rise to even greater heights over the course of the next 30 years.
That momentum seemed doubly necessary in 1990, when Milken was sentenced to 10 years in prison for securities fraud. However, within three years two unexpected events came to pass that by the end of the decade would help propel the Milken Family Foundation soar to unprecedented heights. First, Milken was released from prison after serving only 22 months. Immediately upon his release, the 46-year-old Milken insisted on undergoing a screening for prostate cancer, despite his doctor's assurance that Milken was too young worry about the disease. His seeing paranoia turned out to be prescient, as he was diagnosed not only with cancer, but an extremely aggressive form of the disease that left him with a dire prognosis: he could expect to be dead within 18 months.
Able to afford consultations with experts all over the country, Milken embarked on an aggressive course of treatment, and within a year his cancer was in remission. But by that time he had already founded CaP CURE (later renamed the Prostate Cancer Foundation (PCF)), which would prove instrumental in improving the survival rate for a cancer about which rather little was known and progress was slow, despite the fact that prostate cancer was the second-most common deadly cancer among men, snuffing out 40,000 lives per year in the U.S. alone. "We were in this quiet corner no one wanted to be associated with,” Eschenbach recalled.
Once again Milken used his business savvy to advance the cause of medicine. To further speed up the pace of research, Milken streamlined the usually complicated grant-application process, introducing a five-page application that, if approve, would result in the applicant's receiving the funds within 90 days—twice as fast as the quickest possible government grant. This was a particular boon to those promising young researchers who tended to be overlooked by the biggest players in the awarding of grants, such as the National Institute of Health (NIH).
But as Kari Barbic wrote in Philanthropy magazine, Milken expected results from the grantees—and he got them. "Milken’s insistence on results quickly turned PCF into the key player in prostate cancer research and treatment development," Barbic writes. "One of PCF’s first grants was made to Judah Folkman, whose work in anti-angiogenesis would change nearly every branch of cancer research. Early level funding from PCF has led to new treatments and drugs—including Zometa (for treating prostate cancer and other solid tumors), Provenge (an immunotherapy treatment), and Jevtana (an enhanced chemotherapy). PCF-funded researchers made big strides in identifying various types of prostate cancer, forming effective treatments, and are driving dozens of new drugs and treatments through the clinical test phase."
But as Cora Daniels wrote in Fortune, there was a catch: "Scientists who received PCF money had to learn to share. The lone requirement of the gifts was that the beneficiaries had to present their findings at Milken's annual scientific meeting before their peers, competing institutions, and even private industry--and they had to do it in one year's time, often before they'd had a chance to publish the findings in a medical journal or to patent a new compound."
Taken together, the PCF strategy proved highly effective. Within its first two decades, PCF raised a half-billion dollars for prostate-cancer research and funded over 1,600 research projects—an investment that seems to have paid off handsomely, as today the mortality rate for prostate cancer is 26 percent lower than it was in the pre-PCF days, according to the National Cancer Institute.
In 2003, Milken founded the Center for Accelerating Medical Solutions, later rechristened FasterCures. With a mission "to save lives by speeding up and improving the medical research system" and targeting not just cancer but all of the roughly 10,000 diseases known to medical science, FasterCures leverages Milken and company's deep pool of resources and connections to create and promote corporate and governmental policies supportive of biomedical innovation, as well as to forge bonds between diverse partners in the field of biomedical research and development.
FasterCures' polestar is the experience of patients. "For too long, patients’ unmet medical needs have been an afterthought, rather than a starting point, for developing medical products that address their priorities and deliver value to the health-care system," the organization says. "FasterCures aims to improve health by driving adoption of methods by which patients’ perspectives shape processes for discovering, developing and delivering medical products and services."
Ultimately it may be Milken's strategy of leveraged giving that is proving to the biggest game-changer, with high-risk investments in the unproven ideas of young researchers opening the monetary floodgates of government and Big Business when those ideas show promise. As he explains:
Most of medical research is founded by governments [or] private industry (biotech and phrama firms). But many times things are too risky for them. They wanted proof. [The Milken Foundation's funding model] attracted the best and brightest in the field, because they didn't have to have any proof. They had to have a concept and an idea. That initial research funding, when successful, eventually led to funding by pharmaceutical companies, biotech companies, the NIH, the NCI, and other organizations. And so where we might have put up $1 million to $3 million in venture philanthropy, in many cases a billion [dollars] or more was invested after the fact. And today many of those drugs—abiraterone and others—are in human beings and have been extremely effective. […] There is no individual or foundation that can match government or industry commitments in medical research or education. Therefore, finding a way to get them involved by doing venture philanthropy—showing them that something is a path that might work, high-risk investments in philanthropy therefore allows you to leverage.
Milken may also be the single most effective lobbyist for medical research. “He is a force of nature, no doubt about that,” says NIH Director Francis Collins. Milken was instrumental, for example, in the passage of the 21st Century Cures Act. Enacted in December, the Act authorizes $6.3 billion to fund numerous health-related programs, including $1.8 billion for former Vice-President Joe Biden's "Cancer Moonshot" initiative; numerous mental-health provisions, which the National Alliance on Mental Health celebrates as a landmark victory; and a streamlining of the process by which new drugs are brought to market.
“I think he deserves an enormous amount of credit for the thrust of this legislation, and for bringing people together so that the Energy and Commerce committee had a lot of its work done for it,” says former Representative Henry Waxman, who served on the committee and its Subcommittee on Health.
It's for all this and more that the Philanthropy Roundtable dubs Michael Milken "the Accelerator." And Milken is someone who puts his money where his mouth is, having personally donated an estimated $750 million toward medical research. So whatever his sins of the past, there is no disputing his blessings of the present. "Forgiveness is something that's an important part of our culture," says Andrew Von Eschenbach, who today serves as commissioner of the Food and Drug Administration. "Here's a man who is really serving society."
About the Author:
Except for a four-month sojourn in Comoros (a small island nation near the northwest of Madagascar), Greggory Moore has lived his entire life in Southern California. Currently he resides in Long Beach, CA, where he engages in a variety of activities, including playing in the band MOVE, performing as a member of RIOTstage, and, of course, writing.
His work has appeared in the Los Angeles Times, OC Weekly, Daily Kos, the Long Beach Post, Random Lengths News, The District Weekly, GreaterLongBeach.com, and a variety of academic and literary journals. HIs first novel, The Use of Regret, was published in 2011, and he is currently at work on his follow-up. For more information: greggorymoore.com
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