Dr. Paul Offit of the Children’s Hospital of Philadelphia (CHOP) took home a fortune of at least $29 million as part of a $182 million sale by CHOP of its worldwide royalty interest in the Merck Rotateq vaccine to Royalty Pharma in April of last year, according to an investigation by Age of Autism. Based on an analysis of current CHOP administrative policies, the amount of income distributed to Offit could be as high as $46 million.
There is nothing improper about receiving compensation for a patented innovation; but the extraordinary valuation placed on CHOP’s patents raises concerns over Offit’s use of his former position on the CDC’s Advisory Committee on Immunization Practices to help create the market for rotavirus vaccine — to effectively vote himself rich.
Offit’s claim to a share of the profits from Merck’s Rotateq revenues is based on his role as a listed inventor on the cluster of patents that protect Merck’s vaccine.
Unlike most other patented products, the market for mandated childhood vaccines is created not by consumer demand, but by the recommendation of an appointed body called the Advisory Committee on Immunization Practices (ACIP). In a single vote, ACIP can create a commercial market for a new vaccine that is worth hundreds of millions of dollars in a matter of months. For example, after ACIP approved the addition of Merck’s (and Offit’s) Rotateq vaccine to the childhood vaccination schedule, Merck’s Rotateq revenue rose from zero in the beginning of 2006 to $655 million in fiscal year 2008. When one multiplies a price of close to $200 per three dose series of Rotateq by a mandated market of four million children per year, it’s not hard to see the commercial value to Merck of favorable ACIP votes.
From 1998 to 2003, Offit served as a member of ACIP.
[Source]
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Chapter: Health ::
2 July 2009
