Berg continued to work with SV40 recombinants after 1980, exploring the mechanisms of transcription, repression, expression, regulation, and mutation, and the mechanisms of DNA repair in recombinant DNA. Like other leading researchers in the field, he has had to address the opportunities and dilemmas presented by genetic engineering, especially the changing relations between academic researchers, biotechnology companies, and the pharmaceutical industry. In the wake of the profitable patents obtained on rDNA by Stanley N. Cohen, Herbert Boyer, and Stanford University, Berg, Kornberg, and others were approached by various biotech and pharmaceutical companies regarding new genetic engineering ventures--but they were put off by the heavily commercial focus. While they acknowledged industry's role in bringing rDNA products to market, they worried about the effects of industrial secrecy on scientific research. Would the free flow of scientific information be stifled to protect various company interests and profits?
In 1980, however, Alex Zaffaroni approached Kornberg, Berg, and their colleague Charles Yanofsky about founding a research institute to support the development of novel therapeutic products based on recombinant DNA technology. Zaffaroni, a biochemist by training, had started his career at Syntex Laboratories (which was the first to synthesize the hormone progesterone on an industrial scale) and risen to be president and CEO there. He later founded his own company, ALZA, to pursue development of innovative drug-delivery systems. Kornberg, impressed with Zaffaroni's integrity and commitment to the scientific side of the business, had served on ALZA's scientific advisory board since the late 1960s. By the end of 1980, Berg, Yanofsky, and Kornberg, with Zaffaroni, had become founding partners of the DNAX Institute of Molecular and Cellular Biology. With their assistance, the institute was able to recruit some of the best young scientists. Their key policy was to provide the best resources in an open working atmosphere, allow the staff to publish freely, and thereby guarantee their scientific viability. This proved to be a wise strategy, and DNAX has been a successful enterprise for both its founders and staff. It was acquired by Schering-Plough Pharmaceuticals in 1982, and recently became part of the company's Biopharma research branch, where research is focused on immunological and oncological products. Several cloning techniques developed by Berg were key elements in the production of cytokines (non-antibody immune proteins) at DNAX, and research there has made major contributions to immunology. Berg has continued to serve as board member and scientific advisor to the institute.
Besides raising the issue of industrial development of rDNA products, the advent of recombinant DNA also prompted Berg and others to re-consider the academic configurations within which molecular biology was done at Stanford. One major argument for pursuing rDNA research had been its potential benefit to medicine. Yet despite the interdisciplinary nature of molecular biology, medical faculty at SU were rarely included in the research "loop." During the early 1980s, Berg and a medical school colleague proposed developing a new faculty who could bridge the gap between the laboratory bench and the clinic bedside, who were trained in medicine, but elected to do scientific research. With such a group, new information from the labs could be easily transferred to the clinical training milieu.
Administrators at Stanford University and the School of Medicine liked the idea, but had no space for a new institute. The medical school also needed space for new fields that had emerged, such as developmental biology and molecular physiology. With funding from the Howard Hughes Medical Institute, philanthropist Arnold Beckman, and SmithKline Beckman, Stanford was able to build a new facility, the Center for Molecular Biology and Medicine. One of Beckman's conditions for funding the project was that Berg serve as the center's first director. Berg agreed, on the condition that the biochemistry department become part of the center. To avoid ransacking the SU medical school faculty, members of the center's three new departments--Molecular and Developmental Biology, Molecular and Cellular Physiology, and Molecular and Genetic Medicine--were recruited almost entirely from outside Stanford. Many Stanford researchers working in molecular biology wanted to relocate to the new facility, but the center couldn't physically accommodate them all. To insure that such colleagues could still benefit from the new center, Berg established the Program in Molecular and Genetic Medicine to serve as an umbrella program for all those interested in molecular and genetic approaches to biological question, and to provide access to funding, facilities, and teaching opportunities. He served as the center's director from 1985 to 2000.
Since retiring from his faculty and Beckman Center posts, Berg has continued to serve on various advisory boards, but has also pursued other interests. For several years he shifted his focus from science to scientific biography, researching and writing a book about pioneering geneticist George Beadle, with co-author Maxine Singer. George Beadle: An Uncommon Farmer was published in 2003.