Chapter 23 - Preventing Speeding by Closing the Road

Abstract

The Bayh–Dole Act assigns valuable intellectual property to not-for-profit institutions, setting them up for a philosophical struggle between academic purity and financial survival. Conflict of Interest (CoI) regulations seek to preserve the former despite commercial temptation, and the result is to impose substantial costs on technology transfer. CoIs can prevent an investigator from having significant ownership or involvement in a company that has licensed his own technology and prevent that company from sponsoring research in the investigator’s laboratory. These regulations waste value and impose practical and financial burdens on Valley of Death companies, increasing the costs of scientific progress, reducing synergies, and displacing equity. Too much direct involvement of founders in the research performed by their companies is presumed to incentivize scientific fraud or data misinterpretation, when in fact commercial engagement may have the opposite effect. Federal regulations give universities leeway in how they define and resolve conflicts, which provides an opportunity to evolve practices in a way that is more conducive to biotech commercialization.