SickKids in Court – Are Public-Private Research Collaborations a Hindrance or a Driver of the Innovative Process?August 14, 2013 by Adam Falconi
A recent lawsuit filed by Myriad Genetics involving the alleged infringement of their controversial breast cancer screening tool has included the prestigious Toronto SickKids hospital as a co-plaintiff. This lawsuit has been a source of criticism for the hospital and has reinvigorated the debate on the merits of public-private research collaborations in health care innovation.
Aftermath of SCOTUS Ruling – Myriad Genetics Sues Archrival
This past June, the US Supreme Court rendered a landmark decision, ruling out the patentability of some genetic sequences in patents developed by Myriad Genetics for their breast cancer screening tests. (You can view some of the IPilogue’s extensive coverage of the international litigation around this issue here, here, and here.) The results of this decision and the invalidation of the Myriad patents were seen by many as a development that would reduce the cost of breast cancer screening methods due to the possibility of cheap alternatives being produced without being hindered by patent licensing. A sound prediction, as just hours after the verdict, companies started releasing breast cancer screening tools at a lower cost than the Myriad products. A few weeks after the ruling, however, Myriad filed a lawsuit in the Utah District Court against Ambry Genetics, claiming that the company infringed 10 patents owned or licensed to Myriad that had not been a part of the US Supreme Court case. In response to the lawsuit, Ambry has recently countersued Myriad for antitrust violations.
This case is interesting from a Canadian point of view since some of the patents at issue involve ownership agreements between Myriad and various public health organizations, including SickKids Hospital in Toronto. In the lawsuit, it is stated that the public health organizations will lose “significant amounts of revenue” from lost royalties, and that the revenue stream from their ownership to date has brought in around $57 million. Although listing SickKids as a plaintiff in the lawsuit is a legal obligation due to their ownership agreement, the story has nevertheless garnered some controversy and debate. This lawsuit has been seen by some as an attack on affordable breast cancer screening for patients, with SickKids seemingly in a position that is opposite its role as a health care provider. Patent arrangements like the one between SickKids and Myriad can be seen as paradoxical; preventing patients from being able to access the medical discoveries that have been made possible by higher prices caused by patent exclusivity.
Public-Private Research Collaboration: A Complex Issue
Discussions arising from situations such as this ultimately stem from the relationship between public institutions and profit-seeking entities in health research collaboration. Analyses of the merits of such collaboration has reached multiple conclusions in different fields and geographic locations, but a recent American study seemed to suggest a statistically significant increase in pharmaceutical industry innovation from publically-funded scientific research.
Critics of these joint research ventures frequently cite the claim that patents can deter innovation through a “tragedy of the anticommons” effect, where other research entities choose not to enter a field of innovation due to the fear of their production ultimately getting blocked by existing patents. Luigi Palombi, an Australian lawyer that has written a book about the Myriad breast cancer screening saga, criticized the SickKids incident and stated that “[i]t is our outrageous for any publicly funded research institution to be put in this situation” and that “[o]nce you have publicly funded institutions getting into bed with these guys, well then that raises a whole series of other questions and issues”. Other commentators, such as McGill University law professor Richard Gold, take the view that “[t]here’s always been a relationship obviously between industry and hospitals and universities. And it’s not all bad because, of course, universities do basic research.” Professor Gold also went on to state that he hopes public institutions “will be wiser in the way they set up their agreements in order to have a choice to whether to be involved in ligation”. Although the majority of commentators seem to agree that SickKids is currently occupying an unfavourable position from its public involvement in the lawsuit, the debate on the merits of these joint health-care research ventures is certainly an unresolved issue.
The Future of Public-Private Health Research Collaboration in Canada
While an entity like SickKids is concerned with maintaining a certain public image, the reality may be that in an era of ever-increasing health care costs and constrained government budgets, public-private research collaborations may become an increasingly important source of health care innovation in Canada. Although critics of the current situation may harp on the fact that an entity like Myriad is “only in it for the money”, the reality is that biopharmaceutical innovation costs an extraordinary amount of money and carries a large amount of risk. In order for ambitious cutting-edge research to take place sustainably in the public research sphere, there needs to be the prospect of financial incentives that can support current and future projects. In fact, many public institutions like universities are already conducting research in this area to try and develop more efficient processes for commercializing their research.
In my opinion, the unfortunate possibility is that “public shaming” these entities can have a chilling effect on these kind of collaborations. It would be a shame for potentially prosperous research arrangements to be hampered because of public appearance or political reasons. This should certainty not get in the way of developing our national intellectual property portfolio; especially in the hearth care sector where innovation is always sorely needed. Like Professor Gold, I agree that public institutions should be wiser in the way they set up research agreements with private entities, but this must go beyond a focused consideration of avoiding potentially embarrassing litigation. There should be an effort to enhance the relationship between the public and private sectors, and an awareness on the part of the public entities of their ethical obligation to act in the public interest. This obligation can be met by concentrating the drafting of these collaborations on the ultimate production of better health outcomes for their patients through downstream medical innovation. Public research organizations are undoubtedly important engineers of scientific discoveries, but sometimes you need that private sponsor in order to get your race car on the track.
Adam Falconi is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.