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Comment by skosuri | Hacker News Reader

This is not only allowed, it's encouraged by legislation called the Bayh-Dole Act. The general thought is that there would be no incentive for anyone to do clinical trials on the drug, which can get quite expensive, if they don't have some protection for exclusive use. Many, if not most drugs proceed starting from academic research funded by governmental support.

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I'll also add that the educational institute who received the government funds out-licenses the drug while maintaining a royalty interest in it. Lyrica came out of Northwestern and they build a brand new, shiny chemistry building out of the royalties.

Why is that bad? Shouldn't the discoverers of pregabalin, who helped millions in excruciating incurable chronic pain, receive a portion of the profit from the sales of the drug to build facilities for future research?

That seems like a well-formed feedback loop to me.

I'm not saying it's bad at all! I'm just pointing out that the academics who invent something and pass it to a biotech company for development get something in return!

Totally agreed. I misread your tone, which can be tough to perceive over the interwebs sometimes. My apologies :)

How much of that goes to the actual researchers vs the school?

Cynically, even if the school gets 100% of the profits, the feedback loop of "encourage drug development, get paid" functions properly. They would only have to pay their researchers just enough to continue working...

Depends on the school. The general rule of thumb is about 1/3rd to the inventors themselves, 1/3rd to the department, 1/3 to the school.

The guy at Northwestern who discovered Lyrica is a multimillionaire. The incoming royalties are usually split between the researcher and school.

Thanks for the informative response! Do you know how expensive clinical trials would be for this kind of drug?

$100M-500M gets thrown around [1] but it's hard to find good data. This might seem not too high, but many drugs fail, and often fail at the most costly step (phase III). So you have to be sure to factor that failure rate in.

[1] http://www.manhattan-institute.org/html/fda_05.htm

Depends on what indication they are trying to get. A handy estimate is that a phase III trial costs $15K/person/year. If they aim for a 1000 person trial of 6 month duration, you're looking at $15M just for the phase 3 (I doubled it since they typically run two). However, that's a small trial.

Fidaxomycin, which was developed by Optimer Pharmaceuticals to treat C. difficle, was relatively inexpensive to run. I want to say in the vicinity of $100 million

Do note companies have a very strong incentive to make clinical trials as expensive as possible for this, and other reasons.

Companies have a very strong incentive to make it expensive? Can you expand on that?

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