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Attacks on Venture Philanthropy Miss Mark Badly

January 6, 2015
In a highly problematic op-ed in today’s New York Times, freelance journalist Llewellyn Hinkes-Jones attacked venture philanthropy and patient foundation funding of medical research, which has become a valuable source of funding for diseases which may not otherwise receive research dollars. Venture philanthropy organizations bring a singular focus and drive to the process of getting promising therapies from the laboratory bench to the patient as quickly and efficiently as possible, bringing hope – and results – to patients and families suffering from neglected diseases. These groups serve a critical need in helping fill the ever-widening "valley of death" gap in funding that exists between NIH basic research and clinical research conducted by biopharmaceutical, often providing very early seed capital for scientific proof of concept that is too risky for both public and private funders to support.

To take one example discussed by the author, funding from the Cystic Fibrosis Foundation has contributed to a doubling of life expectancy for CF patients in the past 30 years. Today, there are nearly 30 cystic fibrosis drugs in development or already in use by patients – more than in the entire history of the disease. As a non-profit with a singular focus on funding CF research, the CF Foundation will be pouring the money from their recent royalty sale for Kalydeco and other CF drugs back into new investigative treatments for CF, which may one day lead to their goal of a lifelong, permanent cure for CF. Kalydeco is an absolutely transformative treatment for the patients who benefit from it. That is why, despite the cost, even the British National Health Service (which often denies coverage for drugs it deems too expensive) decided to cover Kalydeco due to the value it provides on a Quality Adjusted Life Year (QALY) basis.

Numerous other patient groups are involved in efforts to promote research:

  • CureDuchenne launched CureDuchenne Ventures, an initiative to identify and fund a robust pipeline of therapies to treat Duchenne, the most common and lethal form of muscular dystrophy. Seven research projects are in clinical trials with support from CureDuchenne, including a $7 millon collaboration with Prosensa for a drug in Phase III clinical trials that, if approved, will be the first novel drug available for the treatment of Duchenne. CureDuchenne’s research investments have leveraged pledges of more than $100 million from government agencies and pharmaceutical companies.

  • The Michael J. Fox Foundation for Parkinson’s Research uses in-house experience to leverage donor-raised capital to push projects into trials and ultimately, the clinic. To date, the Foundation has supported 51 clinical trials.

  • The Leukemia & Lymphoma Society rebuilt its research program over the past five years by growing its own staff so that it could bring much-needed intelligence and expertise in-house.Their Therapy Acceleration Program has three divisions, including a Biotechnology Accelerator, designed to spur development of blood cancer treatments and diagnostics.

Beyond his failure to appreciate the value of patient group contributions to medical research, the author also offers a truly radical proposal that would disrupt our entire medical innovation ecosystem. He argues that “[t]o make medical advances truly philanthropic, the profit motive needs to be removed from the equation.” If such a proposal were actualized, it would dismantle the most effective and innovative medical research system in the world – the same system which has been responsible over the past several decades for curing Hepatitis C, turning HIV from a death sentence into a manageable chronic disease, reducing the cancer death rate by 20% since 1991, and other advancements far too numerous to list.

The author fails to mention the high costs – now estimated by the Tufts Center for the Study of Drug Development at nearly $2.6 billion when accounting for failures – and 10-15 year timeline involved in researching and developing a new medicine. Without a profit potential, investments in drug research would shrink dramatically if not dry up altogether.

Elsewhere, in a statement that evinces a near-complete ignorance of the way prices for medicines are set, the author states that “[w]ithout price controls on the final product that come with public funding, the potential costs of the resulting medicines are limitless.” This could not be further from the truth. Payers including insurance companies and pharmacy benefit managers engage in aggressive negotiations with drug companies to reduce costs, and government programs including Medicaid and the Veteran’s Administration receive substantial discounts from the list price for medicines. In addition, competition from other companies in the same therapeutic class also lowers prices as companies vie for market share by competing on cost.

This same author, in recent writings, has called for re-regulating the American airline industry, regulating the trucking industry and ending internships as we know them – so, his call to dismantle the most effective and innovative medical research system should come as little surprise to anyone familiar with his approach to radical ideas. The New York Times can do better. For the sake of the many patients represented by venture philanthropy groups, I hope that they do in the future.

For more information on patient group funding for medical research, I recommend visiting:

The Research Acceleration and Innovation Network: A FasterCures program


Leukemia and Lymphoma Society: Research Successes

The Michael J. Fox Foudation for Parkinson’s Research: Our Impact

Juvenile Diabetes Research Foundation

Learn how venture philanthropy groups are changing medical research in this Faster Cures report.