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Taxing Tissue

Jasper BovenbergJasper A. Bovenberg, author of Property Rights in Blood, Genes & Data: Naturally Yours?, is a practicing attorney and a legal consultant to the international biomedical research community.

by Jasper A. Bovenberg

Today’s biomedical research is a collaborative research enterprise, requiring the contributions of patients, universities and industry. Today’s laws, however, allow only universities and industry, which supply basic knowledge and technology, to profit from their contributions; patients, who supply tissue, may not be compensated. Some consider this unfair, as it allows tissue donated by patients to be wholly appropriated by universities and industry. Others consider this wise, as compensating individual tissue donors could block scientific progress and technological development. Is there a way to redress the double standard in biomedical research that is both fair and wise?

Ironically, the double standard has both a moral and an economic underpinning. European law solemnly declares that the human body and its parts shall not give rise to financial gain, for reasons of human dignity. American law denies patients a property right in their tissue for reasons of economic policy. Recognizing such a right would impose a duty on universities and industry to negotiate fair compensation with every donor of all tissue used in their research. Moreover, compared with the contributions of universities and industry to the end product, the importance of tissue contributed by patients is minimal. Finally, why should tissue donors be entitled to compensation, as they or their progeny may benefit in the long run from the technological advances to which they contribute?

Opponents of the double standard draw on principles of fairness, equity, and distributive justice. They view the double standard as a possible source of public distrust in the biomedical research enterprise. In fact, patients’ contributions to that enterprise are no longer minimal, as they supply university and industry with crucial compilations of tissue and associated medical data. Consequently, they have increasingly abandoned altruistic participation and are demanding compensation for their tissue. However, given current European and American law, these claims require a novel legal underpinning in order to be valid and enforceable. Various models have been proposed.

Charitable trust model. Donors would transfer their tissue to a charitable trust, and would collectively appoint a trustee, who would have legal fiduciary duties to use the tissue for the benefit of the public. The trust agreement could allow the donor group to participate in the governance of the trust and thus have a say in the distribution of any benefits. But, while the model is fair in a number of ways, it implies that parts of the human body can give rise to financial gain. Moreover, the model is unwise to the extent that tissue donors could block the development of knowledge and applications. And, by definition, it would work only if the trust is funded on a public basis.

Contract model. Tissue can be removed only with donors’ prior consent. Thus, prior to giving their consent, tissue donors can negotiate acceptable compensation. Patients suffering from rare disorders have adopted this approach. Prior to supplying their tissue to universities and industry, these patients negotiate ownership rights in any technology that arises from the research. This model seems fair enough: if people can exploit such natural endowments as their beauty or scientific genius, then why not their tissue? It may be unwise, though, because the knowledge and applications over which they retain control may have implications for other diseases. In such circumstances, should they further their own interests by continuing to exploiting their control, or should they further the interests of those other patients by donating their tissue?

Global public good model. In this view, the human genome is a common heritage of humankind and a global public good whose benefits should be shared with all. Benefit-sharing may be fair in that it includes giving special assistance to research participants, such as access to medical care or to new treatments stemming from the research, but it may be unfair in failing to define the recipients of such benefits. In addition, the model bears an arbitrary element, as the sharing of benefits is not subject to control by the donors of tissue, much less to democratic control, and may prove self-serving for universities and industry.

The unfair and unwise elements of these models nonetheless suggest a solution that is both fair and wise: a tissue tax. Instead of allowing donors to claim individual compensation for their tissue, a tax would be imposed every time a tissue-based application actually yields a profit. This would be fair, as it would ensure collective compensation for the use of tissue in general, rather than for individual tissue donors, and it would be wise in that it would not block scientific and technological progress.

While universities and industry may be wary of taxation, they might prefer a tissue tax over endless negotiations with countless tissue donors over the sharing of uncertain future benefits. Moreover, unlike direct compensation schemes, a tissue tax does not exert undue influence on individuals or groups to donate tissue. And, instead of being arbitrary, a tissue tax would be subject to democratic control: no taxation without representation. In brief, the introduction of a tissue tax would be both a fair/em> and a wise way to redress the double standard that currently governs the collaborative biomedical research enterprise.

Copyright: Project Syndicate, 2006.

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The fundamental assumption is wrong

Other than trademarks, this whole fabrication called intellectual property is a con game. Those for it argue on two counts. Firstly that it motivates creativity and new products. The evidence for this argument is unconvincing – the studies that have tried to prove it have found that it may do so in some industries, if you ignore the enormous costs of enforcing and policing this framework, and the social cost of the many who are unable to consume products that would otherwise be cheaper. The second argument is that it is property, and should belong to the creator. There is no single creator for ideas, they are built on centuries of knowledge, and interactions. Most research is at least partly funded by our taxes, through public research grants, subsidising researchers’ salaries and overheads, tax incentives …. Having to pay for it twice is fraud.

From a national trade point of view, only two countries have a net gain from intellectual property laws – the US and the UK. For Australia to be supporting this framework (much less being a leader in making it worse) doesn’t make sense.

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