One Sample, One Share! A Proposal to Redress an Inequity with Equity

Abstract

Biomedical research is built on the contributions of the trinity of donors (samples), universities (inventions) and industry (investments). While the law allows universities and industry to capitalize on their contributions, it denies donors of samples both the right to compensation for and the right to control the use of their contributions (Moore’s law).(Moore v. Regents of the University of California (51 Cal. 3d 120; 271 Cal. Rptr. 146; 793 P.2d 479; Bovenberg, August 2005, Nature Biotechnology 37) To resolve this donor “cash and control inequity”, or donor “gains and governance deficit”, this paper explores a novel solution. Both universities and industry typically capitalize on their contributions by contributing these to a corporation in exchange for shares in the corporation’s capital. This form of capitalization triggers an obvious, but hitherto unasked question: if inventors and investors can contribute in exchange for shares, then why can’t donors? Issuing shares for samples may seem an awkward fit, but it is a proper way to give sample donors a say in both the gains and the governance of their samples. In view of the widespread use in the biopharmaceutical industry of stock option plans (for employees, suppliers, accountants, lawyers), a share issue (or sample donor stock options) to those who contribute indispensable material, does not seem out of place. Indeed, such a “shares for sharing” model would resolve all inequities ensuing from the double standard set by Moore’s law in one stroke. As an additional benefit, a share model, by definition, bestows rights (both to govern and to gain) that are commensurate to the value of the contribution. Rather than providing sample donors with a blanket power to unilaterally dictate the terms of commercialization of their samples, providing donors with equity allows for tailor made rights that reflect the proportionate value of this contribution relative to the contributions of the other contributors (inventors and investors). Notably, corporate law thus provides much more sophisticated instruments to resolve complex donor claims than the binary, one size fits all, informed consent doctrine has ever provided. The proposed corporate law instruments even fit the familial and genetic nature of the contributed sample. It allows sample shares to “stay in the family”, securing gains and governance for the donor’s descendants. In sum, the shares for samples model would redress the sample donor cash and control inequity, with equity.