Disease Charities Pursue Cures by Investing in Drug Start-Ups, Face Potential Conflicts of Interest

The Wall Street Journal reports that about a dozen disease-based charities recently have startedfunding early-stage drug research at start-up for-profit companies, usually inexchange for royalties or stock options.  The goal is to speed the development of new disease treatments.  Some of these dollars might have otherwise be spent to fund university researchers.  The practice has raised concerns, the article reports, that if a disease-based charity collect royalties from the sale of a particular company’s drugs, its ability to provide unbiased medicaladvice may be compromised.   For example, “a generic drug might be really useful for patientswith MS, or epilepsy, and because the foundation has these sort ofclose ties with for-profit companies, then they might have subconsciousbiases against advocating for those sorts of outcomes that might lowercosts.”  To avoid this potential conflict of interest, a disease-based charity might sell its stake in the lucrative drug or company.

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