Who Owns the Biggest Biotech Discovery of the Century? (2014)(technologyreview.com)
technologyreview.com
Who Owns the Biggest Biotech Discovery of the Century? (2014)
http://www.technologyreview.com/featuredstory/532796/who-owns-the-biggest-biotech-discovery-of-the-century/
45 comments
This is almost entirely sourced from the MIT Technology Review's original reporting:
http://www.technologyreview.com/featuredstory/532796/who-own...
http://www.technologyreview.com/featuredstory/532796/who-own...
Thanks, we updated the link from http://www.fiercebiotech.com/story/who-really-controls-revol....
Thanks for the heads-up
Was wondering if someone can give a layman's explanation of how CRISPR gene editing works and its potential applications?
Not trying to start any startup, instead just trying to learn more about CRISPR...
Not trying to start any startup, instead just trying to learn more about CRISPR...
"Zhang--who maintains he did the work independently"
So he has a wet lab at home? color me skeptical.
But I suppose you might as well do what you can to get a slice of a multi-billion dollar pie.
So he has a wet lab at home? color me skeptical.
But I suppose you might as well do what you can to get a slice of a multi-billion dollar pie.
He doesn't mean independently from the university he works at, he means independently from the other researchers who also discovered the technology.
This is probably the CRISPR technique article is talking about http://en.wikipedia.org/wiki/CRISPR
" By delivering the Cas9 protein and appropriate guide RNAs into a cell, the organism's genome can be cut at any desired location."
Holy crap, I had no idea the field was this advanced.
" By delivering the Cas9 protein and appropriate guide RNAs into a cell, the organism's genome can be cut at any desired location."
Holy crap, I had no idea the field was this advanced.
Yes, there were a couple of threads about this few days ago... https://news.ycombinator.com/item?id=9235912
The applications section is... impressive to say the least.
That website. Omfg.
Considering that much of this research was likely paid for in part by federal grants and taxpayer money, especially research done on college campuses... I'm not a fan of watching this "IP war."
In the end, it probably means delayed implementation in to therapies while companies battle it out in court, followed by insanely expensive treatments denied by insurance companies all while a few new billionaires are minted and thousands of people suffer and die unnecessarily.
/end jaded pessimism
In the end, it probably means delayed implementation in to therapies while companies battle it out in court, followed by insanely expensive treatments denied by insurance companies all while a few new billionaires are minted and thousands of people suffer and die unnecessarily.
/end jaded pessimism
I work in tech transfer office of a major research university. We are responsible for protecting the IP of our inventors and licensing it. We work hard to get research from the lab out into industry where it can have the broadest application and best chance for making an impact. For biological and pharmaceutical technologies, it can take quite some time to make this transition, and there is often a lot of risk that techniques which work well in the lab may fail when scaled or otherwise adapted for industry. Clinical trials take a lot of time and money, and the FDA review process is stringent. Those are all risks shouldered by our commercial partners whether they be start-ups or large multi-nationals. For our part, we need to make sure that they have the protection they need to carry those risks over a span of years until a product can make it to market. That protection starts as soon as we first file a provisional patent for a technology and continues through the patent lifecycle (continuations, divisionals, international phase, etc). There is a large cost to this from a university perspective, and we are provided with the budget to handle that (federal funds are not used to cover the patent costs).
We are also very selective in how we license these technologies. The split is generally between exclusive and non-exclusive licensing, and we try to make the best call given the particular technology we're dealing with. In many cases, the technology is quite specific and there may only be a handful of companies in need of it. In many other scenarios we recognize the potentially broad application of the technology and work out ways to license it non-exclusively. There are also times when corporate partners aren't ready to bite due to the lack of maturity of the innovation. In those cases, we can help spin off startups to continue the development of the technology until it has reached a stage where it is more attractive to investors.
One of the most important parts of this whole process is the royalty side of things. Since we are able to protect the IP and license it responsibly, our office generates a large amount of revenue. That money goes back to the university in a somewhat-complex system of distributions where the inventor's department and lab get a cut to help continue their research. Importantly, the inventors themselves also get direct payouts from the licensing revenue. I think we can all agree that if we were unable to patent and license their inventions, then they would not be able to share in the success of their efforts.
* Full disclosure: We have licensed IP to the company mentioned in this article
We are also very selective in how we license these technologies. The split is generally between exclusive and non-exclusive licensing, and we try to make the best call given the particular technology we're dealing with. In many cases, the technology is quite specific and there may only be a handful of companies in need of it. In many other scenarios we recognize the potentially broad application of the technology and work out ways to license it non-exclusively. There are also times when corporate partners aren't ready to bite due to the lack of maturity of the innovation. In those cases, we can help spin off startups to continue the development of the technology until it has reached a stage where it is more attractive to investors.
One of the most important parts of this whole process is the royalty side of things. Since we are able to protect the IP and license it responsibly, our office generates a large amount of revenue. That money goes back to the university in a somewhat-complex system of distributions where the inventor's department and lab get a cut to help continue their research. Importantly, the inventors themselves also get direct payouts from the licensing revenue. I think we can all agree that if we were unable to patent and license their inventions, then they would not be able to share in the success of their efforts.
* Full disclosure: We have licensed IP to the company mentioned in this article
industry where it can have the broadest application and best chance for making an impact
Does impact there ever have a definition other than 'revenue for the university'?
I realize this is a somewhat pointed question, perhaps even obnoxious, but if the answer is otherwise, I'm wondering why bureaucrats in a tech transfer office are the ones deciding when it is proper to forgo revenue for some other societal benefit?
Does impact there ever have a definition other than 'revenue for the university'?
I realize this is a somewhat pointed question, perhaps even obnoxious, but if the answer is otherwise, I'm wondering why bureaucrats in a tech transfer office are the ones deciding when it is proper to forgo revenue for some other societal benefit?
By your same logic, why would a researcher devote decades to making an impact in their field? Is it purely altruistic? Is it because they love to see their articles cited in journals? Is it because their technologies can be licensed and put into broad use?
It's hard to picture a case where we would broadly open a patent for anybody to use at no cost. In cases where that would be the likely outcome, we simply won't bother patenting the technology, and allow it to be published without protection if the researcher so chooses.
We are no blindly profit-seeking on behalf of the university, however. We are good partners in negotiation and understand the cases where certain technologies might have immense value to some but won't generate a large amount for the university. We often invest a lot of time and money into technologies that don't necessarily end up making the impact our researchers had hoped. Maybe the tech couldn't be adapted to work at scale or maybe it couldn't pass clinical trials. There are also the cases where we work hard to find partners for orphan drugs. That is a critical area of medicine that in by no means lucrative, but it can make a huge impact to a small population of patients. One success we've had in that area was Myozyme [1].
And not to be pedantic, but since we're on HN, I figured I'd clarify that we really don't fit any accepted definition of bureaucratic [2].
1. http://en.wikipedia.org/wiki/Alglucosidase_alfa
2. http://www.merriam-webster.com/dictionary/bureaucracy
It's hard to picture a case where we would broadly open a patent for anybody to use at no cost. In cases where that would be the likely outcome, we simply won't bother patenting the technology, and allow it to be published without protection if the researcher so chooses.
We are no blindly profit-seeking on behalf of the university, however. We are good partners in negotiation and understand the cases where certain technologies might have immense value to some but won't generate a large amount for the university. We often invest a lot of time and money into technologies that don't necessarily end up making the impact our researchers had hoped. Maybe the tech couldn't be adapted to work at scale or maybe it couldn't pass clinical trials. There are also the cases where we work hard to find partners for orphan drugs. That is a critical area of medicine that in by no means lucrative, but it can make a huge impact to a small population of patients. One success we've had in that area was Myozyme [1].
And not to be pedantic, but since we're on HN, I figured I'd clarify that we really don't fit any accepted definition of bureaucratic [2].
1. http://en.wikipedia.org/wiki/Alglucosidase_alfa
2. http://www.merriam-webster.com/dictionary/bureaucracy
http://dictionary.reference.com/browse/bureaucracy
the body of officials and administrators, especially of a government or government department.
Of course you aren't a government department, but you are a body of administrators at a publicly funded institution.
I don't mind that universities license technology in order to capture revenue. What I don't like is obfuscating the activity behind words like 'impact'.
the body of officials and administrators, especially of a government or government department.
Of course you aren't a government department, but you are a body of administrators at a publicly funded institution.
I don't mind that universities license technology in order to capture revenue. What I don't like is obfuscating the activity behind words like 'impact'.
It's difficult to divorce the ideas of revenue and benefit. We're not talking about open-source software here. We're talking about pharmaceutical products and getting those to market so that those in need can start benefiting from our advancements. We get our cut of the revenue when our commercial partners are successful. If our technologies can be scaled and make it through trials, then everybody wins. Patients have a safe treatment, the drug companies can recover costs and continue to spend on R&D, and our researchers get their share.
Also, we are not bureaucrats. We are former doctors and researchers ourselves. Many of us have worked for startups and are well-connected to the the VC world. We are better-equipped than most to identify partnerships that will lead to a successful transfer of technologies from lab to industry.
The role you describe is bureaucratic, regardless of the qualifications brought to bear.
It's difficult to divorce the ideas of revenue and benefit. was my point. To me it looks like you say "impact" out of concern that "revenue" might be interpreted as crass.
It's difficult to divorce the ideas of revenue and benefit. was my point. To me it looks like you say "impact" out of concern that "revenue" might be interpreted as crass.
You're telling me that if the research was just put out there, it like, wouldn't get used? You're obviously a very intelligent person but your extended rationalizations sound silly. Just come out and say it: "we work hard to make a buck off our research".
So, let's say you worked hard for decades to invent something like a new drug. You're telling me you wouldn't want anything from that? Fine, publish your paper without disclosing your invention to us. Your choice. In all likelihood, big pharma will avoid that technology, as it cannot be protected to any degree that would give them the assurance that their considerable investment would be worth it. So, now your discovery won't help patients and make the impact you wanted.
For some reason, however, our researchers don't seem to pick that approach. They'd much rather work with us to get their work to a place where it can make a difference, and it's only fair that they get rewarded for that.
For some reason, however, our researchers don't seem to pick that approach. They'd much rather work with us to get their work to a place where it can make a difference, and it's only fair that they get rewarded for that.
I would think that if one enters into an academic research position, it is for the explicit benefit of that person's chosen field, or humanity at large. If that person wants to privately benefit from their hard work, than I would think they would either work in an R&D department, such as one for Big Pharma, or start their own business.
Side note: again in this example, there seems to be an underlying issue in believing that Big Pharma is the only enabler of distributing the benefits discovered.
I understand that knowledge is power, and I grant that I don't know alot about the policies behind public institutions and funding resources, but there seems to be a rather problematic conflict in what you're saying.
Side note: again in this example, there seems to be an underlying issue in believing that Big Pharma is the only enabler of distributing the benefits discovered.
I understand that knowledge is power, and I grant that I don't know alot about the policies behind public institutions and funding resources, but there seems to be a rather problematic conflict in what you're saying.
There's a big difference between the types of research that big pharma and academia undertake. To be very general about it, corporate R&D is a lower-risk endeavor. They focus on getting reasonably-well-proven ideas to market. For them, there is always a clear end game of passing the regulatory hurdles, ramping up manufacturing, and handling distribution and marketing efforts.
In academia, researchers don't typically set out with an end game like that. They see a set of problems, and they want to test hypotheses to see if they can find ways to solve those problems. Again, in the most general sense, they aren't think entrepreneurially about scaling their technology or clearing various FDA milestones. They've done the hard part in terms of isolating the proteins or synthesizing compounds. Maybe they've even run preliminary tests to prove efficacy in certain ways. For our researchers, their next step isn't to cash out. They want to get more funding for their labs to hire more postdocs to investigate more hypotheses and get more work published. No, they never complain when their piece of the pie trickles down to them from all of the royalty splits and cost recoveries. Still, that's not what they live for. We have had a few researchers make the leap to the corporate world after their ideas have been proven, but that's definitely an exception.
The important part here is that these inventors never know ahead of time if their ideas will ever pan out or get of of their lab. It's all a big risk. They apply for grants, the government reviews those applications, they decide if the risk is worth it based on a number of factors, and if all works out the researcher gets a chance to prove out their ideas. This early-stage, high-risk investigation is really rare in corporate R&D. In fact, even after some of our technologies have received traction and attention, there is often still too much risk for big pharma to jump on board. In recent years, we've had to get creative with funding sources and early-stage VCs to build startups around certain technologies we believe in just to get them to the point that a bigger partner is willing to jump in.
In academia, researchers don't typically set out with an end game like that. They see a set of problems, and they want to test hypotheses to see if they can find ways to solve those problems. Again, in the most general sense, they aren't think entrepreneurially about scaling their technology or clearing various FDA milestones. They've done the hard part in terms of isolating the proteins or synthesizing compounds. Maybe they've even run preliminary tests to prove efficacy in certain ways. For our researchers, their next step isn't to cash out. They want to get more funding for their labs to hire more postdocs to investigate more hypotheses and get more work published. No, they never complain when their piece of the pie trickles down to them from all of the royalty splits and cost recoveries. Still, that's not what they live for. We have had a few researchers make the leap to the corporate world after their ideas have been proven, but that's definitely an exception.
The important part here is that these inventors never know ahead of time if their ideas will ever pan out or get of of their lab. It's all a big risk. They apply for grants, the government reviews those applications, they decide if the risk is worth it based on a number of factors, and if all works out the researcher gets a chance to prove out their ideas. This early-stage, high-risk investigation is really rare in corporate R&D. In fact, even after some of our technologies have received traction and attention, there is often still too much risk for big pharma to jump on board. In recent years, we've had to get creative with funding sources and early-stage VCs to build startups around certain technologies we believe in just to get them to the point that a bigger partner is willing to jump in.
But then, that's my point. The initial, very high risk is underwritten by tax dollars. Only after something is proven to a degree, only after a certain amount of risk is removed, does corporate step in.
But then the rewards are realized by the corporation. I have no issue with the university getting some additional funding to keep working, and I don't see anything wrong with the inventor getting a taste.
But the idea that there is no product incentive without insane IP monopolies for the corporation - the same one that sat out the riskiest part of the whole deal - is wrong on every level. Where there is any profit potential so will there be a profiteer.
The heaviest risk is borne by the taxpayer, and yet they are then asked to pay exorbitantly for the final product, which is often a burden too difficult to bear. It's mind numbing to me then any argument which tries to convince me of how this system is even close to the best we can do.
But then the rewards are realized by the corporation. I have no issue with the university getting some additional funding to keep working, and I don't see anything wrong with the inventor getting a taste.
But the idea that there is no product incentive without insane IP monopolies for the corporation - the same one that sat out the riskiest part of the whole deal - is wrong on every level. Where there is any profit potential so will there be a profiteer.
The heaviest risk is borne by the taxpayer, and yet they are then asked to pay exorbitantly for the final product, which is often a burden too difficult to bear. It's mind numbing to me then any argument which tries to convince me of how this system is even close to the best we can do.
I hear what you're saying, but I'm not seeing a proposed alternative. Say the government allocated $500k to early-stage research for a particular drug. Would we then want the taxpayers to fund a startup company to see if that drug can be scaled and work its way to early stage trials? Should the government then, seeing that progress, step in again and fund the full set of trials and a manufacturing facility and a marketing campaign to get this drug to the taxpayers who need it?
Maybe you're suggesting that the first step would be to repay the government some or all of the grant money. Well, maybe it's a bit surprising, but there's not a way to do that in the US. I suppose that the pharma companies should be sending a lot of corporate tax revenue back to the government, but I'd imagine there could be loopholes there. Not every country is like this. Some countries like Singapore actually demand a cut of action in return for the grant money [1].
Maybe we'd just do away with the concept of patents. Then, the government could fund the early stage research and the fruit of that would be open to all. Now, who would step up the plate and do all the heavy lifting to get the drug to market? Once it's been approved by the FDA, any pharma company domestic or foreign could simply make a generic version without having to incur all of the enormous costs associated with getting it approved in the first place. So, my guess is that we wouldn't see many new drug developments coming out and new form of IP protection would have to be put in place to encourage new developments.
Since so much of the world simply tags along with our FDA protections, maybe we convince them to chip in on the costs. We'd basically tell to the other industrialized nations that unless they help carry the cost of drug research and development, no new medicines for them. I doubt that would fly.
I don't know. I'm out of ideas here. Any other suggestions?
1. http://www.a-star.edu.sg/
Maybe you're suggesting that the first step would be to repay the government some or all of the grant money. Well, maybe it's a bit surprising, but there's not a way to do that in the US. I suppose that the pharma companies should be sending a lot of corporate tax revenue back to the government, but I'd imagine there could be loopholes there. Not every country is like this. Some countries like Singapore actually demand a cut of action in return for the grant money [1].
Maybe we'd just do away with the concept of patents. Then, the government could fund the early stage research and the fruit of that would be open to all. Now, who would step up the plate and do all the heavy lifting to get the drug to market? Once it's been approved by the FDA, any pharma company domestic or foreign could simply make a generic version without having to incur all of the enormous costs associated with getting it approved in the first place. So, my guess is that we wouldn't see many new drug developments coming out and new form of IP protection would have to be put in place to encourage new developments.
Since so much of the world simply tags along with our FDA protections, maybe we convince them to chip in on the costs. We'd basically tell to the other industrialized nations that unless they help carry the cost of drug research and development, no new medicines for them. I doubt that would fly.
I don't know. I'm out of ideas here. Any other suggestions?
1. http://www.a-star.edu.sg/
Government not placing requirements around grant money (with regards to the potential final product) is on the government to be sure. I don't know if the Singapore model is appropriate, or perhaps requirements around maximum allowable profit margins on drugs created in-part with government grants, but one or the other would at least be honest.
No patents is a bit harsh, but short-run patents aren't. But let's be clear about generics - the global generics marketplace is closing in on $500B/year [0], so again, I rather flippantly dismiss any and all cries of "without 20 year patents we wouldn't get any new drugs!" Making generics is still rather expensive, and the market is incredibly large. I don't know about doing away with patent protections completely, but 20 years (yes I know that includes testing, but companies can apply for a patent extension) is outlandish, and stops so many people globally from getting access to drugs in the name of profiteering.
In fact, it's gotten so ridiculous that countries - including one of the largest emerging markets in the world, India - are just ignoring US patents and developing generics. When countries start risking international trade ties with the US over drug patents and access to life-saving treatments for 3rd-world markets, something is amiss.
As for other first-world (and large 3rd-world) countries chipping in for FDA testing, I imagine they would, if a US-based company was not then granted a price-gouging monopoly over that research worldwide. That doesn't appear to be an option you mention.
[0] http://www.bccresearch.com/market-research/pharmaceuticals/g...
No patents is a bit harsh, but short-run patents aren't. But let's be clear about generics - the global generics marketplace is closing in on $500B/year [0], so again, I rather flippantly dismiss any and all cries of "without 20 year patents we wouldn't get any new drugs!" Making generics is still rather expensive, and the market is incredibly large. I don't know about doing away with patent protections completely, but 20 years (yes I know that includes testing, but companies can apply for a patent extension) is outlandish, and stops so many people globally from getting access to drugs in the name of profiteering.
In fact, it's gotten so ridiculous that countries - including one of the largest emerging markets in the world, India - are just ignoring US patents and developing generics. When countries start risking international trade ties with the US over drug patents and access to life-saving treatments for 3rd-world markets, something is amiss.
As for other first-world (and large 3rd-world) countries chipping in for FDA testing, I imagine they would, if a US-based company was not then granted a price-gouging monopoly over that research worldwide. That doesn't appear to be an option you mention.
[0] http://www.bccresearch.com/market-research/pharmaceuticals/g...
Without an ability to get a return on investment, no, companies would not invest the $0.5B to $1.0B to get a drug to market.
^ This
Returns on investment are the highest of almost any industry. Let's stop pretending drug company profits are a nail biting razor thin margin.
http://www.bbc.com/news/business-28212223
http://www.bbc.com/news/business-28212223
Returns on investment are the highest of almost any industry.
For the established companies with a portfolio full of successful products. You're ignoring all of the investment money that goes into products that don't sell at all.
For the established companies with a portfolio full of successful products. You're ignoring all of the investment money that goes into products that don't sell at all.
It's a question of how much the government pays versus how much private investors pay. Nobody will do this work for at-below cost (as government grants tend to be), with no upside potential. It's like a seed investor offering you these terms: we'll pay 80% of your development expenses, but we get 100% of all future profits. People in the medical space can do the math just as much as people in the consumer tech space.
One of the incremental changes I would make to the privatization of public research is that IP could not be granted exclusively. Free for noncommercial use, 0.5% of gross for commercial, done.
http://en.wikipedia.org/wiki/Bayh%E2%80%93Dole_Act
http://en.wikipedia.org/wiki/Bayh%E2%80%93Dole_Act
I think patents just need to last less time in an age of faster development and communication. Drug patents would need to have some sort exception that doesn't start the clock ticking until FDA approval, with caveats to prevent abuse like intentional trial delay.
That kind of already happens in a roundabout way.
Currently you get a 20 year patent. The clock starts ticking right away. It usually take 6-10 years to get a drug approved by the FDA, leaving 10-14 years of patent protection.
If the FDA takes an extraordinary amount of time to approve your drug, you can get a patent extension to compensate.
Currently you get a 20 year patent. The clock starts ticking right away. It usually take 6-10 years to get a drug approved by the FDA, leaving 10-14 years of patent protection.
If the FDA takes an extraordinary amount of time to approve your drug, you can get a patent extension to compensate.
I suspect that without exclusive licensing, many startups founded to commercialise this sort of research simply wouldn't get funded.
I argue that startups are probably not best way to commercialize this kind of scientific research. Our world of startups is more a gold rush with VCs taking a lions share of the resources.
There is an inherent moral flaw in having exclusive licensing over life saving technology.
There is an inherent moral flaw in having exclusive licensing over life saving technology.
What if having an exclusive license statistically saves more lives in the long run?
This line of reasoning is inherently fallacious. If what you said is true, then I would change my mind.
It's not, inherently fallacious. It may be counter-intuitive to you, but that is by no means a fallacy.
It really is, what if <thing is better>? There is nothing to argue against. So like I said, I would change my mind, statistically, in the long run, towards the better thing. Still fallacious.
You stated:
"There is an inherent moral flaw in having exclusive licensing over life saving technology."
I simply asked you to consider for the sake of argument that more lives may be saved under an exclusive licensing framework. How is that an "inherent moral flaw"? It certainly isn't "inherently fallacious".
Neither one of us has numbers that statistically validate things in either direction - but I'm not closing my mind off to reasonable possibilities.
I simply asked you to consider for the sake of argument that more lives may be saved under an exclusive licensing framework. How is that an "inherent moral flaw"? It certainly isn't "inherently fallacious".
Neither one of us has numbers that statistically validate things in either direction - but I'm not closing my mind off to reasonable possibilities.
I don't know how true it is, but a professor of mine who was active in this type of research back then said that as soon as the moratorium expired, everyone published all these fantastic results from huge complicated experiments that they had very obviously been doing during the moratorium.
It's hard to put the genie back in the bottle.