Universities are research power houses but fail to reap rewards

It’s not all about the money but universities could drive a harder bargain. Victor1558

In the pharmaceutical industry there is a place known as the Valley of Death. It is the place between research and innovation where many drugs enter but fail to emerge from the other side. One reason for this is the enormous expense of bringing a new drug to market, and that is perhaps why in recent years there has been a decline in new drugs being marketed - a decline which has both potential heath and economic implications.

And university research is increasingly being used as a basis for tomorrow’s cutting edge projects and discoveries, and by extension a strong economy. But often this is done on the cheap because of a lack of proper funding and universities not getting a fair reward for their efforts. In many respects UK universities are world leaders, but for one reason or another the beneficiaries of this research know-how are often multinationals or foreign firms. This might be seen as part of a newly emerging industrial policy.

There are many examples which amply document the research success of British universities right across the board. One stand-out is the receipt of over US$200m (£124m) from the drug Humira, an anti-TNF antibody therapy, used to treat arthritis and Crohn’s Disease.

Huge sales but mainly for big pharma. Lyzadanger

It uses patented technology derived from research at the MRC Laboratory of Molecular Biology in Cambridge and the Scripps Research Institute in California. By August 2009 it was being used in 80 countries in the treatment of 370,000 patients, and was estimated to be the world’s top-earning pharmaceutical product with projected sales of US$10 billion (£6 billion) by 2016 for the US firm AbbVie (formerly Abbott Laboratories). Its sales in 2012 were reported as US$9.3 billion.

Other examples come from the UK’s Reseach Excellence Framework website. One from Imperial College involves a treatment for rheumatoid arthritis. Glaxo SmithKline (GSK) and Wyeth, an American firm which was subsequently acquired by Pfizer, are listed among its funders. There appear to have been several patents taken out as a result of this research but it isn’t clear whether Imperial has directly financially benefited in terms of revenue.

A third example comes from North America, where Myriad Genetics markets Colaris AP, a genetic testing kit which uses technology that generates more ttn £100,000 in royalty income for Cardiff University. Arguably this is not such a large amount compared to Myriad’s overall revenue from the Colaris AP test, which together with the Colaris test, amounted to US$14.5m in the fiscal fourth quarter of 2013.

A better grasp of potential

Much of this research is funded by the UK research councils, although to a considerable extent they are behind the times in the way they do this. As in many countries, requests for funding from university teams are evaluated largely on the basis of “their scientific merits” although economic impact is, superficially at least, beginning to be taken into account. But in many cases, only once the research is close to completion does serious thought appear to be given to successfully bringing the innovation to market.

An alternative scenario is beginning to emerge which sees industry, academia, research funders and even central government, co-operating at the start of a research project. For example, GSK co-operates with, among others, UCL, Cambridge and Nottingham universities in the UK and Yale in the US.

In Europe, too, there are increasingly examples of university centres that are sponsored by, and identified with, large multinationals - for example the Mitsubishi Genetic Therapies Centre at Imperial College. The French government has funded an initiative to create six world poles of excellence bringing together French firms and publicly-funded research centres in a bid to keep France in the forefront of pharmaceutical innovation and production.

In America, there are also some moves in this direction, with the specific aim of changing academic culture to foster collaboration.

It is possible these paths will lead to universities and industry sharing more equally in the gains from research. But at the moment the evidence from the UK, the US and the EU suggests the income generated from university research is relatively small compared to both revenues generated and the total costs of that research.

The average licence incomes gained by universities and research institutes in Europe equals 1.5% of the research expenditure and in the US it is 4%. Of course, not all research is intended to directly generate revenue, but the earlier examples suggest that universities and their funders are selling their intellectual property rights much too cheaply.

It isn’t obvious that this integrated approach to research will improve universities’ position. In part this is because in dealing with big pharma, even the largest universities do not have the financial and legal expertise to bargain on an equal footing, and as stand-alone entities probably never will.

And does closer collaboration compromise universities? This is a questions that has been raised in France. It clashes with the academic’s traditional focus on disseminating knowledge as widely and freely as possible, and on high quality research publications.

It also involves, directly or indirectly, public money underwriting the commercial success of some firms and not others. This is being done not just to promote research per se, but increasingly as a tool of industrial and economic policy, as in France, with their poles of excellence, and in Germany and more widely the EU.

Even in the US, where there has been a traditional reliance on market forces, the National Institutes of Health - one of the world’s biggest research funders - is beginning to view research as a way of boosting the economy and has long, implicitly sought to strengthen the global position of American companies.

This may to some extent justify what might be seen as state subsidisation of private sector firms, notwithstanding the desperate need of many governments for revenue. But individual universities still need to be fairly rewarded for their work and it is much more difficult to justify when, as is often the case in the UK, the firms are foreign-based multinationals, with the benefits being largely reaped outside the UK.