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Counting Offit’s Millions: More on How Merck’s Rotateq Vaccine Made Paul Offit Wealthy

Posted Dec 09 2009 12:00am

Doc under mag glass By Dan Olmsted and Mark Blaxill

Paul Offit, vaccine entrepreneur and public health spokesperson, has earned approximately $10 million in income from Rotateq® royalties through 2009 and stands to earn a total of between $13-35 million over the life of his rotavirus vaccine patents, according to a new analysis by Age of Autism. Our analysis also shows that Offit’s future royalty income is strongly tied to Rotateq®’s future sales in domestic and international markets, giving him a strong financial stake in both the specific success of the rotavirus vaccine category and the global reputation of vaccines in general.

This new analysis by Age of Autism updates an earlier report in which we detailed Offit’s financial conflicts. Our original report, derived through independent reporting on which Offit and his employer would not comment, was based on information that we have since learned did not reflect recent changes in practices on sharing patent revenues with inventors and a private agreement on revenue sharing between Offit and his co-inventors. Our new estimate of Offit's total profit of $13-35 million through 2019, overlaps the range of our original estimate of $29-55 million. Both those estimates exceed Offit's recent -- and apparently partial -- disclosure that he made "about 6 million.”

The connection between Offit’s public role as an authority on vaccines and autism, and his financial interests, is rarely mentioned when Offit is quoted in news accounts. And although he once received harsh criticism from a Congressional committee for his participation in a government advisory panel while his own patented vaccine, Rotateq®, was undergoing clinical trials, he continues to seek opportunities to influence the public debate without apparent consequence. The magnitude of Offit’s ongoing financial benefit from this public advocacy is described for the first time here.

Offit did not respond to a request for comment. We also asked one of the patent owners, the Wistar Institute, about the arrangement in order to confirm our calculations. “Wistar is one of the owners of the patent” and licensed it to Merck, said Meryle J. Melnicoff, Director of Business Development, referring us to the Wistar Web site for details on how Wistar shares license royalties to inventors. This statement supports the analysis below.

New information from Offit allows more detailed analysis

We previously reported (HERE) that Offit, co-inventor of Merck’s Rotateq® vaccine, sat on the regulatory body that held the authority to create the market for the rotavirus vaccine category, participated in committee deliberations that bore directly on the commercial value of that category and voted in favor of measures that expanded the resulting market; all this while a vaccine formulation protected by his patented invention in the same category was proceeding through clinical trials. We estimated the personal profit Offit made when his own rotavirus vaccine was subsequently approved, marketed and a portion of his royalties securitized in a transaction worth $182 million. We asked Offit and his employer, the Children’s Hospital of Philadelphia (CHOP) to comment on our estimates but CHOP declined comment and Offit never responded to our inquiry.Recently, however, Offit has revealed to others additional information on his personal stake in Merck’s Rotateq® vaccine (for Offit’s public emails on this issue, see HERE). These new disclosures enable us to refine our earlier estimates and present a sharper picture of Offit’s financial interest in the success of the invention his sponsors at CHOP and the Wistar Institute licensed to Merck. Our original analysis estimated Offit’s profits from Rotateq® in a range of $29-55 million, all of which we suggested flowed to him following a single lump sum payment to CHOP from a financial firm called Royalty Pharma. Offit now claims that the one-time payment from CHOP was less than our estimate, revealing to Amy Wallace of Wired Magazine that CHOP paid him “several million dollars” and to others that he received “about $6 million.”

“It was a ridiculous amont [sic] of money…but it is also a far cry from what has been claimed.”

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