A Research Grant Is Only the Beginning for a New Drug

It is a tiny fraction of the investment required to bring a new therapy to market.

Letter to The WSJ.

"Amy Dockser Marcus’s review of “The Genome Defense” by Jorge Contreras (Bookshelf, Dec. 8) cites his view that government grants at research universities justify federal price intervention if an invention results and is commercialized by a biotech or pharmaceutical company. This conveniently ignores that such government funding is a tiny fraction of the investment required to bring a new therapy to market.

Consider a case in which a $2 million federal grant contributes to an invention claimed in a university-owned patent. The patent is licensed exclusively to a company, which then invests years and up to $2 billion to bring a product to market. So far, this is a realistic scenario. But if the resulting drug is deemed by some to be too expensive, and price controls are demanded, how should the company respond? It might suggest that, next time, the feds are welcome to set the price if they put up the first $2 billion. In the spirit of fairness, the biotech or pharmaceutical company could repay that pricey $2 million grant.

Fred Reinhart 

Plymouth, Mich.

Mr. Reinhart was president of the Association of University Technology Managers (2015-16)."