Fact check: Simpson misinformed on publicly funded research

Madison, Wis. - At last, we're getting to the bottom of what makes John Simpson and the California-based Foundation for Taxpayer and Consumer Rights tick - or, more accurately, ticked off.

Not only does Simpson think the historic Bayh-Dole Act has been a colossal waste of time and money, even though many experts believe it unchained the innovative potential of the nation's research universities, but he doesn't understand the basics about “technology transfer” on those same campuses.

In his Aug. 11 column published by the Wisconsin Technology Network, Simpson described the 27-year-old Bayh-Dole Act as “flawed” because, in his view, taxpayers are cut out of the deal when it comes to reaping the rewards of federally or state-funded research.

It is a misinformed position that explains why Simpson and the foundation have repeatedly claimed the University of Wisconsin-Madison, the Wisconsin Alumni Research Foundation or both have prevented other researchers in the United States or abroad from learning from their findings about human embryonic stem cells.

Faulty assumptions

Frankly, if Simpson were correct on the basics, even I would be tempted to agree with him. But he's wrong in his key assumptions.

Simpson: “Faced with dwindling federal support for research, more and more states like Wisconsin are stepping up to fill the shortfall with state money.”

Fact: The state of Wisconsin has not provided one penny to fund human embryonic stem cell research, a line of research where Simpson has focused his complaints. The state has helped to pay for basic life sciences research at the UW for more than 100 years, an academic mission few seriously question. And it has provided grants or loans to many tech-based companies. But when it comes to basic research, state government is a poor fourth behind the federal government; private, non-profit WARF; and other private sources of cash.

The Wisconsin Institutes for Discovery is a prime example of how the state gets involved. The Institute is a $150 million building funded with one-third state dollars and two-third private dollars. Once completed, the facility will encourage and establish collaborative research on the UW-Madison campus and beyond. Some stem-cell researchers may be housed on the Institute's privately funded side, but the state is not directly paying for their work.

Simpson: “Who should control, profit, and otherwise benefit from discoveries made in state-funded laboratories across Wisconsin? As states like Wisconsin have increasingly raised their contributions, appropriate policies and safeguards are essential at the state level.”

Fact: The state of Wisconsin hasn't “raised its contributions” for stem-cell research or any of research. State spending on academic research has declined in real terms for more than two decades, to the point that Wisconsin's slide in state support puts it among the top 10 percentage “losers” among the 50 states.

Simpson: “If Wisconsin has funded an invention, but the patent holder does not commercialize it, Wisconsin should be able to license the invention to someone who will.”

Fact: So what does Simpson think WARF has been doing for the past 80 years? Since 1925, WARF has held the patents generated by research on the UW-Madison campus and licensed to others the rights to use them. Any profits from those licenses are plowed back into the university - about $850 million over the years. In fact, for the past seven years, WARF has given more back to the UW than it has generated in license revenues. While few academic tech transfer organizations have been as successful as WARF, that model is standard practice at research universities across the United States.

Simpson: “The results of all Wisconsin-funded research should be available to all researchers in Wisconsin - and any other researchers designated by the state - for further research without a licensing fee. Once taxpayers pay to develop a technology, researchers in the state ought to have free access to further research.”

Fact: With stem-cell licenses as well as all WARF licenses, non-profit researchers are provided a safe harbor to use any WARF-owned technology for academic research not only in Wisconsin but all over the world. The only thing WARF declines to do is to donate its stem cells to for-profit companies or private labs.

WARF has all but given away its stem cells to 400 academic researchers in two-dozen nations, and trains those researchers in how to properly use those cells in their own labs. Because it exists to protect and commercialize UW inventions, however, WARF declines to simply hand off its intellectual property to others who might profit by their use. Private groups can buy WARF stem cells at a fair price given what those companies and labs stand to gain if their research leads to a billion-dollar cure. They just can't get stem cells for free.

Even though an academic researcher can license WARF cells for $500 - yes, $500 - and come to Madison for free training, Simpson and friends still claim WARF is blocking the schoolhouse door. Go figure.

Simpson: “Consider the California biotech company Genetech. It charged $100,000 a year for its cancer-fighting drug Avastin even though $44.6 million in federal funds from the National Cancer Institute went to develop it.”

Fact: Well, at least Simpson is wrong about California tech transfer, too. The $44.6 million from NIH was spent on basic research, which the federal government long ago concluded is done most efficiently at the academic level. The full cost of developing a newly discovered chemical entity into a marketable drug averages more than $800 million, which includes at least three stages of clinical trials and a federal approval process that devours up to half of the patent life. If it were not for patents on such new chemical entities, no company or any other institution would accept the financial risk necessary to develop a drug.

Sharing the fruits

Simpson says the public should share in the fruits of the research for which it paid. That happens every day in America, in a million unseen ways, through better and safer drugs, medical devices, and other products. To assert that Wisconsin taxpayers are paying more is wrong; to claim that federal support for basic research is wasteful is wrong-headed.


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