Accelerating commercialization: a new model of strategic foundation funding

Abstract

Venture philanthropy presents a new model of research funding that is particularly helpful to those fighting orphan diseases, which actively manages the commercialization process to accelerate scientific progress and material outcomes. This paper begins by documenting the growing importance of foundations as a source of funding academic research as traditional funding from industry and government sources decline. Foundations are known for their innovative techniques and we consider the evolution of the ways that foundations fund academic research and form partnerships across academia and industry. We examine the example of the Cystic Fibrosis Foundation and the development of the drug Kalydeco Ò as a demonstration of the principals of strategic foundation funding. The Cystic Fibrosis Foundation adapted to a venture philanthropy model and took an active role in drug development, stewarding the commercialization process from funding basic scientific work in academic institutions, to making an equity investment in a start-up firm. We conclude by evaluating the advantages and disadvantages to venture philanthropy for the academic researchers, industry partners, foundations, and universities and consider an agenda for future research.

Controversies with Kalydeco: Newspaper coverage in Canada and the United States of the cystic fibrosis “wonder drug”

“…Although the role of the CFF in Kalydeco's development was only discussed in 20% of U.S. articles, it is notable that 21 of these 29 articles were supportive of this relationship with only 4 articles predominantly critical. One particular criticism of this model is that the investment in industry of money subject to charitable tax advantages essentially creates a public subsidy for drug development with little or no accountability [24]. Additional concerns have been raised regarding "institutional corruption, public trust, research agenda distortion, and disproportionate funding to the size of the affected population" [24].…”

“…One particular criticism of this model is that the investment in industry of money subject to charitable tax advantages essentially creates a public subsidy for drug development with little or no accountability [24]. Additional concerns have been raised regarding "institutional corruption, public trust, research agenda distortion, and disproportionate funding to the size of the affected population" [24]. The CFF has specifically been criticized for its failure to push back against Vertex in setting the high price of Kalydeco, and the enormous financial benefit it earned as a result of the price Vertex is charging, while some patients, whose interests the Foundation should be protecting, face access barriers to the drug as a result of its price tag [24,25].…”

Societal targeting in researcher funding: An exploratory approach through dimensions and interactions

“…Funding of this kind exists, for example strategic funding requiring academic researchers to collaborate with non-academics (Feldman and Graddy-Reed 2014). Some indications of this dimension in funding instruments may include ex ante specifications on publicly sharing of research data and, in some occasions, the funded researcher foregoing intellectual property rights or licensing revenues.…”

Importance of Participant-Centricity and Trust for a Sustainable Medical Information Commons

“…The Cystic Fibrosis Foundation (https:// www.cff.org) funded early work, provided data access to patients, and made resources available that led to the suite of drugs now available to treat most forms of the disease. 19 However, that model has faltered at the point of access to treatment due to pricing of the endproducts, with salient controversies over coverage and reimbursement in the U.K., Australia, Ireland, France, Canada, and the U.S. To date, most of the strongest participant-driven projects focus on cancer or rare, often inherited, diseases. 20 Many valuable lines of research do not map to a constituency that can be organized around a single disease, however.…”