'I can't give it away on 7th Avenue'

Is it true that advice is worth what you pay for it?

Then maybe I should switch to a subscription model.

Friday's Wall Street Journal had an article about how doctors are charging serious money to advise hedge funds and other big-time, deep-pocket investors about their stakes in health-related ventures.

Seems the companies put some on retainer, while other doctors charge $200/hour to chat on the phone about this and that.

You can't buy me that cheaply.

Besides, I already give tons of useful investment advice, often quoting from the masters.

For example, Bernard Baruch; asked how it was that he was so consistently successful in the stock market, he replied, "I always sold too soon."

Here's the eyebrow-raising story, by Gregory Zuckerman and Greta Anand.

The Doctor Is In And, Increasingly, Advising Investors

Caring for patients isn't enough for some doctors.

Leaders in the field of medicine are tending to a new group of clients: big health-care investors.

Eric Topol, a vocal critic of Merck & Co.'s Vioxx arthritis drug and chairman of cardiovascular medicine at the prestigious Cleveland Clinic, recently quit as an adviser to a hedge fund after news emerged that the hedge fund made big money betting against Merck shares.

Dr. Topol's involvement with the hedge fund is just one example of a little-noticed phenomenon that has been going on for years, but now seems to be picking up, say people in the health-care and investment worlds.

Increasingly, hedge funds and other investment firms are turning to well-respected medical experts to help them with their investment ideas.

At times, doctors interact directly with hedge funds and others, charging them for a short phone chat about a product, or serving as on-call advisers for the investors.

Dr. Topol dealt directly with the hedge fund, Great Point Partners LLC of Greenwich, Connecticut.

Dr. Topol says he didn't invest in the hedge fund and never discussed Merck with the fund.

Some fast-growing brokerage and consulting firms, such as Leerink Swan & Co. in Boston and Gerson Lehrman Group in New York, specialize in introducing doctors to investors, or asking doctors a series of questions on behalf of investors.

Large securities firms also link doctors with investors.

There is nothing illegal about giving guidance to an investment firm, and many doctors have been doing it for years to pick up a few extra bucks.

Many investors take steps to ensure that the doctors don't know about their investment positions, and simply ask the doctors for their views about industry trends or drugs on the market.

Dr. Topol emphasizes that his concerns about Vioxx, which eventually were borne out, weren't influenced by his relationship with Great Point.

He also says he wasn't aware the hedge fund was short-selling Merck's shares.

Great Point didn't return calls requesting comment.

But the growing contacts between top doctors and big investment firms raise potential conflicts of interest.

For example, a doctor might be tempted to be more negative in his public comments about a company's drug or medical product if he is on retainer or is an investor in a firm that he knows has been betting against the company.

Such negative comments could affect the outlook for the drug as well as the stock of the company in question.

At the same time, leaders in the field of medicine sometimes have early and confidential access to the views or leanings of the Food and Drug Administration.

For instance, members of FDA advisory committees get agency analyses of key products weeks before the regulators' findings become public.

The physicians being paid by investors might feel tempted to hint at their knowledge, or share their own leanings before a FDA committee vote.

Turning to doctors for investment ideas comes as some big firms have soured on research by Wall Street's analysts, and have started to do more of their own digging.

Talking to a doctor, much like speaking with executives in other industries, allows an investor to better understand trends in the health-care business.

On the heels of investigations into the securities business, analysts no longer receive early word from companies about how they are doing.

Meanwhile, health-care stocks, especially smaller companies and many biotech shares, have become among the most volatile in the market, adding pressure on investors to get the first word on developments.

At the same time, the growth of managed care can limit how much some doctors make from their practice or research, increasing the inclination to moonlight as an adviser to investors.

"It's much easier to get doctors on the phone," says Samuel D. Isaly, a health-care investor at OrbiMed Advisors LLC in New York, which has an advisory board of doctors and speaks to other physicians from time to time.

Those companies that act as matchmakers between doctors and investors are hotter than ever.

Gerson, a closely held research boutique backed by Bessemer Venture Partners that specializes in linking experts in medicine, technology and other fields with investors, has discussed putting itself up for sale for several hundred million dollars.

The firm says it has a network of 60,000 doctors world-wide that it hooks up with investors.

Almost a dozen other boutique firms also do work linking medical experts and investors, and large brokerage firms also are doing more of this work.

Some hedge-fund managers lock the doctors up with exclusive contracts to make sure they talk only to their funds.

Some funds try to mask their investments from the doctors they hire, to remove any bias from their advice.

At the same time, Dr. Topol and other doctors say discussions with well-informed investors can be helpful to their own work.

"Investors have always wanted to talk to doctors; we provide them a platform to do it efficiently," says Alexander Saint-Amand, president and chief operating officer of Gerson.

The six-year-old firm works with mutual funds, venture-capital firms and hedge funds, and typically pays a doctor about $200 an hour to work with the investors.

"There are no financial incentives for doctors to be pro or con" about a product or health-care company they discuss with an investor, Mr. Saint-Amand says.

"They usually are just talking about a drug that's in the marketplace."

Some doctors say they are wary of potential conflicts.

Robert Califf, a cardiologist and professor of medicine and director of the Duke Clinical Research Institute, says he consults with many drug companies developing new medicines.

But Dr. Califf says he stays away from advising hedge funds.

"Advising hedge funds is the ultimate in risk," he says.

"If you reveal something proprietary, that's treacherous if somebody trades on it."