Public-private partnerships spurring medical innovation

How public-private partnerships re-invest in medical research

We only see the end result when we pick up our prescription at the pharmacy. What we don’t often see is the time, money and brain power it takes to develop our treatments.

For patients living with diseases that have no cure, innovation is just as important as the ability to access current treatments. Innovation brings hope and extends patients’ lives so that they can live long enough to see hope become a reality.

But, innovation doesn’t happen by default. On average, new treatments take a decade and anywhere from $4 billion to $11 billion to reach the patient. Part of that money and brain power comes from public-private partnerships between government-funded research centers and innovative companies.

So how do these agreements work?

Companies pay millions to use government research labs

Last month, the New York Times examined these public-private partnerships that “bring a lifesaving treatment to patients, something the government cannot really do by itself.”

Under one type of agreement, government-funded research centers receive upfront payments for the use of research facilities and other research support. Government-funded facilities collect millions of dollars every year from private companies by effectively renting out medical labs. The National Institutes of Health, according to the Times, has roughly 400 of these “cooperative research agreements with companies, and licenses hundreds of patented inventions for private-sector development.”

If these agreements didn’t exist, it’d leave medical research exclusively to large companies. There would be no way that a small group of doctors or scientists could afford the equipment and supplies needed for advanced medical research.

$520 million: UCLA’s stake in prostate cancer treatment

In other cases, taxpayers have the potential for big upside.

Under these deals, government-funded research centers have a stake in any royalties or profits. In turn, profits are re-invested back in more medical research. Such deals can generate hundreds of millions of dollars for medical research.

In 2016, UCLA signed a $1.14 billion royalty deal for a prostate cancer treatment, Xtandi. The university, which owned 44 percent of the royalty interest, sold its royalty rights, netting $520 million, according to the Los Angeles Times. That money went right back into the university medical research “aimed at generating additional discoveries.”

“Given ongoing funding pressures, we are pleased to have these much-needed additional resources to invest in programs that directly serve the public by fostering research that leads to commercially viable products and by educating students,” Steve Olsen, UCLA’s vice chancellor and chief financial officer, said in a press release announcing the deal.

UCLA has set the standard for maximizing government research. The university’s Office of Intellectual Property and Industry Sponsored Research currently defends 3,000 inventions and more than 1,000 U.S. patents. UCLA has also formed a separate non-profit organization, Westwood Technology Transfer, to protect university-funded discoveries.

“Our work is not done when our scientists have completed a key experiment or have published in an academic journal,” Dr. James Economou, vice chancellor for research at UCLA, boasted in 2014 upon launching the university’s not-profit organization to advance campus discoveries. “Our work is done only when we have translated our discoveries into practical benefit for society.”

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