News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Patient privacy, ethics of monetizing not-for-profit data, and questions surrounding industry conflicts appear after the public announcement of an arrangement to grant exclusive access to academic pathology slides and samples

Clinical laboratories and anatomic pathology groups already serve as gatekeepers for a range of medical data used in patient treatments. Glass slides, paraffin-embedded tissue specimens, pathology reports, and autopsy records hold immense value to researchers. The challenge has been how pathologists (and others) in a not-for-profit academic center could set themselves up to potentially profit from their exclusive access to this archived pathology material.

Now, a recent partnership between Memorial Sloan Kettering Cancer Center (MSK) and Paige.AI (a developer of artificial intelligence for pathology) shows how academic pathology laboratories might accomplish this goal and serve a similar gatekeeper role in research and development using the decades of cases in their archives.

The arrangement, however, is not without controversy.

New York Times, ProPublica Report

Following an investigative report from the New York Times (NYT) and ProPublica, pathologists and board members at MSK are under fire from doctors and scientists there who have concerns surrounding ethics, exclusivity, and profiting from data generated by physicians and but owned by MSK.

“Hospital pathologists have strongly objected to the Paige.AI deal, saying it is unfair that the founders received equity stakes in a company that relies on the pathologists’ expertise and work amassed over 60 years. They also questioned the use of patients’ data—even if it is anonymous—without their knowledge in a profit-driven venture,” the NYT article states.

Prominent members of MSK are facing scrutiny from the media and peers—with some relinquishing stakes in Paige.AI—as part of the backlash of the report. This is an example of the perils and PR concerns lab stakeholders might face concerning the safety of data sharing and profits made by medical laboratories and other diagnostics providers using patient data.

Controversy Surrounds Formation of Paige.AI/MSK Partnership

In February 2018, Paige.AI announced closing the deal on a $25-million round of Series A funding, and in gaining exclusive access to 25-million pathology slides and computational pathology intellectual property held by the Department of Pathology at Memorial Sloan Kettering. Coverage by TechCrunch noted that while MSK received an equity stake as part of the licensing agreement, they were not a cash investor.

TechCrunch lists David Klimstra, MD (left), Chairman of the Department of Pathology, MSK, and Thomas Fuchs, Dr.SC (right), Director of Computational Pathology in the Warren Alpert Center for Digital and Computational Pathology at MSK, as co-founders of Paige.AI. (Photo copyrights: New York Times/Thomas Fuchs Lab.)

Creation of the company involved three hospital insiders and three additional board members with the hospital itself established as part owner, according to STAT.

Unnamed officials told the NYT that board members at MSK only invested in Paige.AI after earlier efforts to generate outside interest and investors were unsuccessful. NYT’s coverage also notes experts in non-profit law and corporate governance have raised questions as to compliance with federal and state laws that govern nonprofits in light of the Paige.AI deal.

Growing Privacy Fallout and Potential Pitfalls for Medical Labs

The original September 2018 NYT coverage noted that Klimstra intends to divest his ownership stake in Paige.AI. Later coverage by NYT in October, notes that Democrat Representative Debbie Dingell of Michigan submitted a letter questioning details about patient privacy related to Paige.AI’s access to MSK’s academic pathology resources.

Privacy continues to be a focus for both media and regulatory scrutiny as patient data continues to fill electronic health record (EHR) systems as well as research and commercial databases. Dark Daily recently covered how University of Melbourne researchers demonstrated how easily malicious parties might reidentify deidentified data. (See “Researchers Easily Reidentify Deidentified Patient Records with 95% Accuracy; Privacy Protection of Patient Test Records a Concern for Clinical Laboratories”, October 10, 2018.)

According to the NYT, MSK also issued a memo to employees announcing new restrictions on interactions with for-profit companies with a moratorium on board members investing in or holding board positions in startups created within MSK. The nonprofit further noted it is considering barring hospital executives from receiving compensation for their work on outside boards.

However, MSK told the NYT this only applies to new deals and will not affect the exclusive deal between Paige.AI and MSK.

“We have determined,” MSK wrote, “that when profits emerge through the monetization of our research, financial payments to MSK-designated board members should be used for the benefit of the institution.”

There are no current official legal filings regarding actions against the partnership. Despite this, the arrangement—and the subsequent fallout after the public announcement of the arrangement—serve as an example of pitfalls medical laboratories and other medical service centers considering similar arrangements might face in terms of public relations and employee scrutiny.

Risk versus Reward of Monetizing Pathology Data

While the Paige.AI situation is only one of multiple concerns now facing healthcare teams and board members at MSK, the events are an example of risks pathologists take when playing a role in a commercial enterprise outside their own operations or departments.

In doing so, the pathologists investing in and shaping the deal with Paige.AI brought criticism from reputable sources and negative exposure in major media outlets for their enterprise, themselves, and MSK as a whole. The lesson from this episode is that pathologists should tread carefully when entertaining offers to access the patient materials and data archived by their respective anatomic pathology and clinical laboratory organizations.

—Jon Stone

Related Information:

Sloan Kettering’s Cozy Deal with Start-Up Ignites a New Uproar

Paige.AI Nabs $25M, Inks IP Deal with Sloan Kettering to Bring Machine Learning to Cancer Pathology

Sloan Kettering Executive Turns Over Windfall Stake in Biotech Start-Up

Cancer Center’s Board Chairman Faults Top Doctor over ‘Crossed Lines’

Memorial Sloan Kettering, You’ve Betrayed My Trust

LVHN Patient Data Not Shared with For-Profit Company in Sloan Kettering Trials

Researchers Easily Reidentify Deidentified Patient Records with 95% Accuracy; Privacy Protection of Patient Test Records a Concern for Clinical Laboratories