Pilfering the Public Purse for Private Profit

Fundraising season is upon us again. With the Terry Fox Run, the CIBC Run for the Cure and the CN Tower stair climb on the horizon, the public mind once again turns to the importance of funding research to cure our ills. It is clear from the prominence of these events that there is considerable public support for medical research. But the public contributes to research in a much more significant (though less conspicuous) way as well. In the research environment of today, government funding still provides the backbone of financial support for medical research. Over the past two decades, the number of federal dollars put into public research of medicine has more than doubled, growing from several hundred thousand dollars, to a nearly 2 billion dollars a year industry (1).

There is a clear public interest in funding medical research because it offers many direct and indirect returns on our investment, so to speak. Of the possible benefits we can reasonably expect from public investment in medical research, perhaps foremost is the improvement of healthcare quality. This nebulous concept encompasses anything from tangible metrics such as decreased mortality rates, improved access to services, to less tangible concepts such as patient satisfaction and improved quality of life. A second return is a decrease in costs associated with providing these services. Providing cheaper methods or techniques to produce the same results should be a byproduct of investing in, and thus improving the technology behind medicine. Thus, public money is invested in medical research with the belief that progress in research will improve both the quality and cost of the healthcare system for those who use it – members of the Canadian public. However, the current paradigm under which research operates puts both of these possible benefits in jeopardy.

In research today, alongside public funding, there is a corporate presence. Corporate sponsorship has become an increasingly powerful entity in medical research over the past two decades; between 1980 and 2000 corporate funding of research has increased by 62% (2). However, their participation in the research environment does not come without their own expected return. In exchange for a comparatively small investment in capital and equipment, research agreements tend to give first right to license any intellectual property to the corporate partner. Examples of this type of relationship abound in our very own university, from the now defunct Amgen-Ontario Cancer Institute relationship, to more modest research agreements such as that between Imaging Research at Sunnybrook and General Electric (GE). The latter agreement gives GE access to, and in turn, virtual ownership of research that is funded primarily with public money (3). The demands of these corporations go further still. In many cases, it is the corporate interests that are driving the research agenda (4). I would argue that the demands that corporations make far outstrip their contribution. It’s like ordering pizza with a labmate who puts in only a fraction of the money but insists on deciding what toppings to order. Then when the pizza arrives, he snatches the biggest slices for himself.

The desire of these corporations for profit is often indirect conflict with the public good. The hunt for the genetic link to hereditary breast cancer is an illustration from the United States of how the corporate agenda undermines the ability of research to serve the needs of the public.Making extensive use of the publicly funded Utah Genealogy database, as well as funding from the National Institute for Health, Myriad Genetics was able to isolate and clone the BRCA-1 and BRCA-2 genes (5). Having been granted international patents for both these genes in the early to mid – 90’s, Myriad is aggressively pursuing patent infringement litigation to make the testing for these genetic mutations exorbitantly expensive (6). Furthermore, they have also sought and received patents for all diagnostic and therapeutic applications of these genes, all vaccines derived ‘with the help of this gene’, all animals which incorporate one of the gene sequences and all future applications of these gene sequences (7). While the quality of this product is excellent, the potential benefits become moot when price is a barrier to access as is the case in many Canadian provinces (8). Thus this research, which was designed to improve the management of patients with hereditary gene mutations, is now tightly held in private hands serving only Myriad Genetics’ desire for a handsome profit margin.

It has been argued that the involvement of these corporations is necessary or even desirable because of the positive contribution that it will supposedly have on the Canadian economy. However, as most of these corporations are multi-national, they make no commitment to take the ideas that they garner from Canadian research and further develop them here in Canada. So, there is no guarantee that these public-private partnerships will result in any substantial benefit for the Canadian economy. What is guaranteed is that we, the Canadian public, having already devoted both the resources and people to developing drugs and technologies, are having the products of our research sold back to us with a tidy profit margin attached. The golden handcuffs included with private sponsorship relegates the funds originally intended for public research into nothing more than a corporate subsidy.

What then is the recourse to private control of public research? It could be argued that better regulation is the answer. But the regulatory bodies, such as the Governing Council here at the University of Toronto, already exist within universities to address issues involving conflicts of interest. However, this issue of public money for research being diverted for private gain does not seem to be viewed as part of their mandate.

We believe that a more substantial change is needed. The current methodology under which scientific labs compete for both private money and public funding is anachronistic. This relationship hearkens back to an era in which separate labs could not easily communicate due to geographic separation. Moreover, under the current paradigm, labs have no motive to share ideas due to artificial barriers that pit lab against lab and research against researcher in the race for funding dollars. If instead we view researchers within public institutions as a community who are working for a shared goal, we can see that these separations are obstacles to the progression of scientific knowledge. Once the barriers between scientific groups have been broken down, scientists can then stop counterproductive infighting and realize the efficiencies available through a connected research network. We, as researchers, have a responsibility to the Canadian public to ensure that the money that has been invested in medical research is used to further the public good, not private profit. This is our duty. This is our debt.

The authors would like to acknowledge Cameron Piron for his insightful advice and discussion.


1. Health Care in Canada 2003, Canadian Institute for Health Information

2. Bekelman JE, Li Y, Gross CP, JAMA, vol. 289 no. 4, 454-65

3. Personal Communication with Senior Scientist at Sunnybrook Hospital

4. Ferber, D. The Scientist, Feb 5 2002

5. Williams-Jones, B. Health Law Journal, vol. 10, 121-144 (2002)

6. Hollon T, Nature June vol. 6 no. 6, 610 (2000)

7. European Patent number: EP 0705902

8. Williams-Jones, B. PHD Thesis UBC, July 2002, 104-105

Share your thoughts

Leave a Reply

You must be logged in to post a comment.