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Do academic organisations make enough money from their inventions?


Dr Angela Kukula asks whether academic organisations should gain financially from lucrative discoveries – and proposes some solutions to the high costs of new cancer drugs.

Posted on 21 February, 2018 by Dr Angela Kukula

white abiraterone pill

There has long been a debate on how much financial return academic organisations should gain from their inventions.

On one side there are those who believe, as tax-payer funded entities, we should not be seeking a return at all – and on the other, those who would like to see a greater share of the profits from our inventive efforts being returned to us, and ultimately being ploughed back into our research.

If a company ultimately driven by commercial considerations – accountable to its shareholders – makes a profit from intellectual property developed by university researchers, what is the fair return for those researchers, and the university?

Big profits

As much of our work at the The Institute of Cancer Research, London, often relates to pharmaceuticals and medical technology, both areas where companies can make big profits from discoveries made in the academic sector, I often find myself involved in this debate.

Do we make too much, or too little?

For me, the starting point in addressing this question is to take a step back and ask what academic organisations like the ICR are trying to achieve.

Fundamentally, we are not driven by profit. As public organisations, and as recipients of government funding and donations from supporters and other charities, it is not about the money.

At the ICR, we do what we do for patient benefit, and a good deal of what we do we make available to physicians and the wider research community free of charge. That is how we think many of our discoveries will lead most quickly to new treatments for people with cancer. 

Too much?

In that context, is it right for us to receive the level of financial reward we do? At the ICR, we earned £64 million from our intellectual property in the academic year to July 2016, more than a third of the total for the whole UK academic sector.

Much of that income came from royalties, particularly from sales of abiraterone, a prostate cancer drug we discovered and which is now a standard prostate cancer treatment across the world.

If we did not receive royalties would this result in lower treatment costs?

The royalties we receive are a small percentage of the total sales revenue of drugs like abiraterone. Worldwide abiraterone sales last year alone were over $2.5 billion.

Even if companies stopped paying royalties and passed the savings on to patients in terms of lower prices, the overall cost per annum of most cancer drugs would only come down by a few pounds – a drop in the ocean when the annual cost per patient of cancer drugs can be tens of thousands of pounds.

I believe it is right that we make a fair return for the intellectual effort that we put in to discovering new treatments. And the vast majority of the money we make is ploughed back in to our research.

Too little?

But in that case, are we making too little?

I was recently asked to take part in a debate on BBC Radio 5 Live prompted by a report from campaigning organisation Global Justice Now, which highlighted instances where drug companies are making large profits ultimately underpinned by research and development from UK universities.

The report demonstrated the unfairness of a system where UK academics can make these discoveries yet the prices of new drugs remain high, and are sometimes out of the reach of patients because of cost.

Our research to discover abiraterone, or work at the Medical Research Council Laboratory of Molecular Biology in Cambridge to underpin the development of monoclonal antibodies – also highlighted in the report – was clearly fundamental to the development of these treatments.

And it’s true that pharma companies are making large profits from research originally carried out by universities and charities.

But this is just part of the story. The costs of the clinical trials that prove safety and effectiveness of these drugs are huge. Our largely preclinical work to discover and develop abiraterone was only a small percentage of the total cost of developing the drug.

We don’t have the resources to carry out large, late phase drug trials or the large-scale manufacture needed for these trials. We need to work with pharma in order to get our discoveries to patients.

Hard bargains

Our philosophy is to either partner with the companies most likely to bring our discoveries to the clinic as quickly as possible, or to publish our results for the benefit of the wider community if that will bring results quicker.

We do have some power in our negotiations with companies, and we drive hard bargains. But we have to recognise that a very large amount of investment from companies will still be needed to create something that patients can use.

Whilst our intellectual contribution is crucial, our financial contribution is relatively small by comparison.

Too expensive

However, new cancer drugs are certainly too expensive. Current prices are unsustainable – we need to see more realistic, lower prices for new drugs.

It’s very frustrating for us when a new cancer drug cannot reach the patients who so urgently need it because of cost. The system needs to change to stop this from happening.

One change that we think could lower the cost of drug development is for regulators to approve drugs based on smarter, smaller clinical trials, and for companies to pass on the savings made from avoiding enormous late-stage trials on to patients in terms of lower prices.

In cancer, it is now possible to use biomarker tests or liquid biopsies to give new treatments selectively, only to those patients with the best chance of benefiting from them. ICR researchers have pioneered trials to demonstrate that a drug is effective before embarking on larger, less selective phase III trials.

It’s encouraging to see regulators increasingly approving drugs based on these trials – for example in trials of olaparib in ovarian cancer. The research underpinning the discovery and development of this drug was carried out at the ICR, and it was initially approved for a specific type of ovarian cancer based on selective trials.

Recent changes to the Cancer Drugs Fund and early access schemes like the ones used by NICE have also accelerated the availability of drugs to UK patients.

Passing on savings

We would like to see early access approvals happening more often, and the savings made by proving the effectiveness of drugs in smaller more focused trials passed on to patients in the form of lower prices. We do not see this happening at the moment.

We believe that companies could achieve this by carrying out more preclinical research and better target validation – as we are at the ICR – to firmly establish the mechanisms of action of new potential drugs, before trials begin.

This research will provide a detailed understanding of the relationship between the drug and the condition it is aiming to treat, allowing identification of patients most likely to benefit, reducing exposure to potential side effects in those patients unlikely to benefit and ultimately enabling faster approval of novel treatments.

Smaller, smarter trials and faster approvals will not only mean that the overall cost of trials should come down, allowing savings to be passed on to patients, but also that patients get new treatment options more quickly and companies benefit from having drugs that generate revenues for longer before patents expire. A win-win-win situation.

In the end, what matters most is patient benefit and ensuring patients get access to treatments quickly and at prices that health systems can afford.


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