Tuesday, February 10, 2009

Disease Charities Pursue Cures by Investing in Drug Start-Ups, Face Potential Conflicts of Interest

The Wall Street Journal reports that about a dozen disease-based charities recently have started funding early-stage drug research at start-up for-profit companies, usually in exchange for royalties or stock options.  The goal is to speed the development of new disease treatments.  Some of these dollars might have otherwise be spent to fund university researchers.  The practice has raised concerns, the article reports, that if a disease-based charity collect royalties from the sale of a particular company's drugs, its ability to provide unbiased medical advice may be compromised.   For example, "a generic drug might be really useful for patients with MS, or epilepsy, and because the foundation has these sort of close ties with for-profit companies, then they might have subconscious biases against advocating for those sorts of outcomes that might lower costs."  To avoid this potential conflict of interest, a disease-based charity might sell its stake in the lucrative drug or company.

rak

http://lawprofessors.typepad.com/nonprofit/2009/02/disease-chariti.html

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