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The National Health Service has seen record growth in the last five years. Despite this, we all know that health sector spending is coming under increasing strain. Can medical charities play a part in this? Given their role in supporting the patent system, should the public continue to support medical research charities?

Medical research charities have not escaped the pressures of the recession. The Association of Medical Research Charities in a recent survey reported that 75 per cent of medical research charities consider that the recession will have a significant impact on their funding ('Briefing Paper '“ Medical research charities and the economic downturn', May 2009).

There are a number of significant issues for medical research charities '“ many not unique to them. For example, governance of charities has been under review for some time already, and the burdens of governance and responsibility of trustees of charities have significantly changed the landscape for the individual previously willing to volunteer part of their time in a worthwhile cause. A whole range of regulatory measures potentially make volunteer or part-volunteer activities considerably more risky than they were once perceived to be.

For a good cause?

There are also both ethical and political issues in their campaigning role. As readers will know, not all campaigning for 'good causes' will fall within charitable activities. In the well-known case of National Anti-Vivisection Society v IRS [1947] 2 All ER 217, the court held that the object (at that time) of the total abolition of vivisection could not be for the public benefit and therefore could not be a charitable activity. Animal testing remains a key component of clinical research, and medical research charities often find themselves in a debate about supporting such activities while ensuring that they behave in an ethical manner. It is important for charities to have a policy on these issues as well as on communication of their position to the public, so that they can be clear that they are indeed promoting the public benefit; but also so that they maintain public support for their activities.

These issues come at the same time as funding issues. In line with the remainder of the economy, the current recession has already created a crisis for some charities and for many will certainly reduce their resources. So, for charities the financial crisis has a dual impact, and in some cases a triple impact: the value of their assets and income derivable from those assets have diminished markedly. The value of assets and income available from donors have decreased substantially at the same time, so that charities are able to raise less. And in some cases the demands on their resources have increased (and because of regulatory issues their ability to secure the services of volunteers to meet those demands has decreased). The Association of Medical Research Charities reported in May 2009 that charities asked to identify the reduction in research expenditure said it would range from ten to 40 per cent.

This raises the specific question of the involvement of charities in specifically commercial activities, either carrying on commercial activities in their own right, or their involvement and interaction with commercial organisations.

It is clear that charities can participate in commercial activities as long as these are subsidiary to its charitable objectives (see the helpful thoughts provided by the Charity Commission in 2002 on commercial activities: www.charitycommission.gov.uk/publications/rs2.asp). One particular area of considerable sensitivity for medical research charities is their use of intellectual property '“ although this reflects the more general issue of ensuring that they have a clear policy on commercial activities which carries the support of both their supporters and if possible the public.

Intellectual property has had an increasingly high profile recently '“ is it good or is it bad? While the government sees the generation of intellectual property as a key driver in the modern economy, and something which the public sector, including the NHS, should engage with actively, the public have seen intellectual property as encroaching on their freedoms.

In the clinical area, even the European Commission has produced an (interim) report on the pharmaceutical sector which appears to argue that the intellectual property system may be counterproductive (ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf). Needless to say there is considerable argument about the validity of this report. However, it remains the case that this is an environment where many people do not like commercial involvement of charities just as they do not like the idea of universities and parts of the NHS 'exploiting' intellectual property.

The contribution of medical research charities

Before looking at this in more detail, it is worth looking at the scale of contribution of medical research charities. This is substantial. They contribute an enormous amount to the research base in the UK. In the recent report on university-funded research (The RCUK/UUK 'Review of the Impact of Full Economic Costing on the UK Higher Education Sector', April 2009) medical research charities were found to have contributed over £800m to support medical research just in UK universities in 2007/ 2008. Figures from the Association of Medical Research Charities (AMRC) for 2008/2009 are over £900m. Over the past six years, medical research charities have contributed more than £5bn to medical research. As such they represent just under 25 per cent of the support for university research.

Charities are willing to support what are often regarded as less 'profitable' conditions, although the focus tends to be on diseases more than on basic research (with some very notable exceptions such as the Wellcome Trust, the second largest medical research charity in the world). It is important to understand that 'unprofitable' medical conditions are not necessarily those which are less common conditions. For example, malaria is known to kill millions of people a year in developing countries, more than many developed country diseases, and possibly more than the current swine flu pandemic. Similarly, in the commercial sector sentiment rises and falls: there was a time when there was a perception that vaccine research was the poor cousin of treatments for conditions such as depression; now, in the light of the threat of a pandemic from swine flu, one can clearly see the importance of vaccine research to public health.

Patent protection

'Commercial exploitation' sounds ethically unattractive as a charitable activity. People have criticised charities for obtaining patent protection in the realm of treatments for diseases (see, for example: 'The Patent Is Political: The Consequences of Patenting the BRCA Genes in Britain', Shobita Parthasarathy: https://content.karger.com/ProdukteDB/produkte.asp?typ): how can this be consistent with making treatment accessible to all, which presumably should be the primary charitable objective? The answer to this is not a simple one, and it is very easy to look at the concept of patent protection (or other intellectual property protection, or related protection such as confidentiality), and say that, if its purpose is to exclude others from carrying out the patented activity, how can that possibly be consistent with the objective of spreading technology as widely as possible?

In the last few years patent and other intellectual property protection has come under increasing public and political pressure precisely for this reason. Much of this reflects an issue that lawyers increasingly face '“ that legal concepts are not amenable to sound bites and it is often easy to attack small parts of a legal edifice because they are seen to produce an unfair result, when they are essential ingredients for a much larger picture.

Despite these attacks, medical research charities continue to support the use of the patent system (see the Wellcome Trust policy at https://www.wellcome.ac.uk/). Note that this is concerned to ensure appropriate levels of protection for inventions '“ for example they explicitly do not support over broad protection or protection DNA sequences. Indeed it remains an essential element to the work that they carry out, for just the same reason that patent protection is important to commercial pharmaceutical businesses. This is because in many cases patent protection is essential in order to justify the investment to 'launch' a product. It remains enormously expensive to roll out a medical treatment to the public. The regulatory system means, entirely appropriately, that substantial testing needs to be carried out to ensure the clinical safety and efficacy of a treatment.

The cost of carrying out this work needs to be borne by someone '“ government, charities or the private sector. In practice the government is not willing to bear this cost as an initial cost of launch of a new drug other than in exceptional circumstances; for charities to do so would mean that their assets and income would be far more stretched, and that they would be able to contribute much less in terms of initial research and therefore much less in relation to potential opportunities. That means that it falls to commercial organisations to be given the incentive to carry out such work, and for that patent protection is essential. Without it a commercial organisation could not take the risk of development, only to see benefit of success where it arises being taken by a third party.

What this means in effect is that, while patent protection (and potentially corresponding exclusive rights) may not be the only mechanism for ensuring that innovations get out to the public, it is a very important one. This is also recognised within the National Heath Service where, in appropriate cases, patent protection will be sought. However, this also raises a further issue, which is one that charities (and the public sector) have to wrestle with. Patents and/or exclusive rights are not always the appropriate mechanism for ensuring that wide-scale adoption of new innovations takes place and, while they may be a necessary ingredient of getting drugs to market, they can be a source of serious problems in the widespread distribution of drugs, as in the case of the long term battles of the supply of AIDS drugs to Africa (see the summary of the history of getting AIDS drugs to Africa at www.avert.org/).

Another example of this is that one major medical research charity does not regard platform technologies '“ i.e. ones which form part of the toolkit for future research in an area '“ as necessarily being appropriate for patent protection, or for the grant of exclusive rights. A further example is Cancer Research UK, which made access by research organisations in Europe to its breast cancer patent free ('Charity makes cancer gene freely available across Europe', Susan Mayor: www.pubmedcentral.nih.gov/).

These issues simply illustrate some of the complexities that charities get involved in when they look at issues of commercial exploitation and especially the use of intellectual property in commercial exploitation. This applies not just to patent protection but to brands and trademark protection and other rights. The world here is a very different one from that of purely commercial organisations. It means that those who advise charities in the area of intellectual property and the way in which the rights are used need to have a special understanding of the issues that they face; which in many cases are substantially more complex than in a corresponding commercial business.

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