Venture Philanthropy in Rare Disease Research and Addressing Organizational Conflicts of Interest

Abstract: Medical philanthropic organizations play an important role in advancing research and advocating for patients. Many have embraced venture philanthropy (VP) to advance their missions, especially in rare disease research spaces where investment lags. However, these charity-industry partnerships may generate conflict of interests among organizations’ philanthropic goals of delivering social benefits widely, near-term goods, and long-term financial benefits.

Contrasting the approaches of the Cystic Fibrosis Foundation (CFF) and the Epidermolysis Bullosa Research Partnership (EBRP) elucidates the complications that emerge out of the VP approach. These foundations’ investments were central to advancing treatments where none had previously existed, additionally in both cases the resulting treatments are incredibly costly. The CFF’s approach netted the organization $4.85 billion, and the EBRP has massively increased its ability to fund research in a neglected area. What differs between the two foundations, and where there are complex ethical concerns, is in evaluating how each organization pursued control over their partner’s future scientific and commercial activities.

The paper analyzes how philanthropic organizations ought to address conflicts among (1) the patients charities serve, (2) their financial partners, (3) the organization itself, and (4) the wider research infrastructure and public good. My analysis of VP in rare disease research focuses on whether and to what degree responsibilities to an organization’s beneficiaries might override organizational values like scalability and the ability to pursue a broader research agenda.

Keywords: Venture Philanthropy, Rare Disease Research, Conflicts of Interest