The Wisconsin Alumni Research Foundation (WARF) will pay a minimum of $32 million to a former research partner after it concealed information related to a patent for a kidney dialysis drug.
Washington University in St. Louis sued WARF in 2013 over the joint pharmaceutical patent for the drug, alleging it withheld information about the patent’s true financial value. Later in 2018, the U.S. District Court in Delaware decided in a 191-page case ruling by Judge Joseph Bataillonthat WARF not only provided incorrect information, but kept 99 percent of the royalties to itself, according to the Wisconsin State Journal.
WARF appealed, citing that the statute of limitations for breach of contract had expired by the time Washington University sued. The 3rd U.S. Circuit Court of Appeals upheld the lower court’s ruling, stating “extensive evidence” existed of WARF’s refusal to share the information that Washington University would need to possess a valid claim to sue.
According to WARF spokeswoman Jeanan Yasiri Moe, WARF will continue to review its legal options.
“WARF maintains its stance that it upheld its professional and contractual responsibilities and obligations with (Washington University) and all of the patent holders for more than 20 years,” Moe said. “Our history of integrity, along with our responsibility to protect (intellectual property) rights, are the driving forces behind any legal action.”
WARF patents inventions from UW-Madison researchers, helping to license the new technologies to companies for commercialization and investing the revenue to fund more university research. In the 2019 fiscal year, WARF provided about $66 million to the university to fund more research.
Washington University and WARF began a medical research collaboration in the 1990s, in which both parties agreed that WARF would assume two-thirds of the shared patent’s revenues and the other third would be allocated to Washington University.
WARF then took the patent to Abbott Laboratories, a pharmaceutical company, the same year it signed a licensing agreement with WARF and launched the kidney dialysis drug Zemplar, the State Journal reported.
When a Washington University employee requested a copy of the agreement WARF brought to Abbott in the late 1990s, a WARF employee refused to release the information, citing extraneous confidentiality provisions that supposedly prevented her from sharing the documents with Washington University, court records say.
After Washington University officials asked for an explanation for why checks amounting to only a couple hundred dollars began to appear, WARF sent letters “full of misstatements, half-truths and misdirection,” to explain the revenues, according to the judge’s opinion.
Washington University became aware of WARF’s actions when the research foundation, along with Abbott, sued other drug companies for making generic versions of Zemplar. Court records indicate the drug has generated around $6.1 billion in revenue since its launch in 1998.
Following the expiration for the patent in 2015, WARF received $426.5 million while Washington University only received slightly over $1 million.
Currently, WARF owes a minimum of $32 million, although the amount will likely to grow. Court filings show that interest could add an additional $14.8 million to WARF’s bill.
