The ivory tower and the real world have traditionally had a cozy relationship at Harvard Medical School.

Many Med School faculty do outside work--whether it be as a practicing physician at a local hospital or a researcher for a biomedical company--and most accept it as common practice. That is why so many Med School faculty cringed when Harvard began discussing ways of regulating, and perhaps limiting, the outside work of its physicians.

Harvard, of course, was merely one of many medical schools nationwide looking to scrutinize the outside financial dealings of its doctors, with an eye to whether those dealings were compromising the integrity of research. And Harvard had particular reason to worry, for it was stung by a well-publicized conflict-of-interest controversy just last year.

Yet when Harvard first proposed a set of regulatory guidelines for outside research, the faculty was reluctant to endorse it, saying that it set a bad tone and was too restrictive. Ultimately, a compromise was reached.

Faculty and administrators alike were satisfied with the end result, as Harvard became one of the nation's first medical schools to approve a formal mechanism for overseeing outside research. But outsiders could not help but wonder what the compromise had sacrificed and whether the new guidelines went far enough.

Nobody disputes that the new guidelines--passed by the school's faculty council in March and approved by the Harvard Medical Center last month--are a step in the right direction. Indeed, a growing concern over the effects of financial incentives on medical experimentation has prompted many medical schools nationwide to examine their existing research guidelines.

At Harvard, one incident last year came to symbolize the urgency of the issue. Sheffer C.G. Tseng, a Harvard-affiliated ophthalmologist, reportedly falsified the results of experiments he was conducting on a treatment for dry-eye disease. Tseng was found to have owned substantial stock in the company that manufactured the treatment.

Harvard reacted by conducting its own internal review, which culminated a year later in the new guidelines. Under the guidelines, the Medical School will establish a standing committee to review questionable research activities questionable research activities on a case-by-case basis. Full financial disclosure and approval of the committee will be required for the research to take place.

Faculty are optimistic that the new guidelines will do much to prevent future incidents like the Tseng controversy.

"I think that people should be conscious of conflict of interest, and I hope that this [policy] will create that, without having a stifling effect," says Professor of Surgery Edwin W. Salz-man, a member of the committee that first drafted the guidelines.

In passing the guidelines, professors hoped Harvard could set an example for other medical schools looking to take similar action. And that, many hoped, would eliminate the need for burden-some federal regulation of research.

But if the final compromise satisfied most Med School faculty, it did so only after intense internal debate.

Under the original proposal, the Med School would closely regulate two specific types of activity.

First, doctors would be generally prohibited from conducting research for a company if that company paid them consulting fees or if they held stock in the company. Second, if doctors sat on the Board of Directors of a company for which they were conducting research, their research would have to be closely monitored.

When the administration put the proposal forward however, many Med School faculty opposed the two heavy restrictions. At a February faculty meeting, one of the largest in recent years, doctor after doctor spoke out against the guidelines, saying the rules would create an atmosphere of distrust and damage the industry-academia relationship