“With philanthropists funneling billions of dollars into biomedical research and traditional drug discovery efforts producing fewer and fewer therapies, the line between for-profit and nonprofit life science companies is beginning to blur as both sides of the divide look for new options,” The Scientist magazine writes in an article that examines the rise in collaborations between nonprofit pharmaceutical companies and for-profit groups. “More and more for-profit enterprises are experimenting with nonprofit models, while nonprofit organizations look to incorporate for-profit business practices to stay afloat,” according to the magazine. 

The article examines how Institute for OneWorld Health (iOWH), a U.S. nonprofit pharmaceutical company that has received funding from the Bill & Melinda Gates Foundation and other donors, was able to develop a more affordable treatment for visceral leishmaniasis in India by making “some drastic changes to the traditional drug development paradigm.” Such changes involved iOWH piggy-backing off an “off-patent antibiotic once cast aside by a large pharmaceutical company for its lack of profitability,” the magazine writes. “Since the drug had been previously approved and marketed in the late 1950s as a broad-spectrum antibiotic, iOWH was able to skip directly to a phase III clinical trial to test the drug as a treatment for visceral leishmaniasis. The trial commenced in 2003, and just three years later – record time in the drug development world – paromomycin was approved for sale in India,” The Scientist writes. To manufacture and distribute the product, “iOWH partnered with a for-profit company in India, Gland Pharmaceuticals, which has agreed to take on those roles for no profit, no loss. With Gland’s help, [the drug] paromomycin is now available in India and costs $10-15 for the whole 21-injection course of therapy” a fraction of the previous cost to treat the disease, according to the magazine.

The article notes additional partnerships between iOWH and for-profit companies that have led to the “develop[ment of] a pipeline of [additional drugs] designed for scourges of the developing world: malaria, diarrheal diseases, and parasitic worm infections,” and names other nonprofits engaged in a variety of strategies with for-profit companies to achieve similar goals. The piece also explores how nonprofit foundations and institutes “are breaching the barriers between profit and nonprofit, adopting best practices from the for-profit business world,” and notes the potential risk to the mission of nonprofits associated with “embracing for-profit’s best practices.”

The article includes quotes by Jack Faris, CEO of the Pacific Northwest Diabetes Research Institute; Henri Farret, past director of an artemisinin project at Sanofi-Aventis; Victoria Hale, founder of iOWH; Scott Johnson, a businessman, who founded the Myelin Repair Foundation; Bill Landsberg, an attorney for AspenPointe, a conglomeration of nonprofit mental health companies in Colorado Springs, Colorado; and Brian Popko, a neurologist at the University of Chicago (Scudellari, 1/11).