Case Study: Who Is The #1 Recipient Of Third-Party Royalty Payments At NIH?

Dr. Gallo left NIH in 1995. However, between 2010 and 2016, he ranked #1 of 1,805 scientists in the number of royalty payments collected.

Over 1,800 current and former scientists received up to $400 million from third-party paid royalties between 2010 and 2020 (think: pharmaceutical companies) for inventions developed while working for the National Institute of Health (NIH).

The royalty payment complex at NIH hasn’t had sunshine since 2005. This year, though, NIH was forced to produce these summary numbers under judicially mandated production after our organization filed a federal lawsuit in October 2021. 

So far, we’ve received 1,500 pages of the 3,000 pages resulting in 27,244 line-by-line royalty payments for $197 million in payments. Therefore, we can accurately estimate the size and scope of the NIH royalty payment program during the last decade.

Within 36-hours of our breaking investigation, during the NIH appropriations budget hearing in May 2022, current NIH acting director Lawrence Tabak admitted royalty payments have the “appearance of a conflict of interest.”

The royalty payments are legal, so why is NIH acting like they are a state secret (they are not!)?

Case Study: Dr. Robert Gallo, #1 royalty payment recipient

We don’t know which companies are licensing these NIH inventions or paying the royalties, and we don’t know how much each scientist is getting paid. The NIH is redacting that information from the 1,500 pages we have received so far from FOIA production.

However, we do have the names of each scientist and the number of times they have been paid. 

The most frequently paid scientist, Robert C. Gallo, received 316 payments between 2010 and 2016. He ranked 1st of 1,805 scientists during this period receiving royalties.

Looking into Gallo’s background and the organizations he leads today underscores the need for transparency in royalty patent payments at the NIH.

Gallo the Government Researcher: Patent Controversy

Dr. Gallo began working at NIH in 1965. His research and response to the AIDS crisis made him internationally famous. However, Gallo became mired in controversy in the mid-1980s after he published a series of scientific papers identifying the virus that causes HIV. 

His discovery was contested by a French lab under virologist Luc Montagnier, and it was later proven that Gallo’s HIV samples in his research were the same as Montagnier’s. 

Pasteur Institute, Montagnier’s employer, later sued the NIH over lucrative patents resulting from the discovery related to HIV antibody testing. 

The matter was only resolved after then-president Ronald Reagan and his French counterpart Fraçois Mitterand agreed to share the scientific credit and patent royalties between the two labs. 

The scandal led to Gallo being allegedly pushed out of NIH in 1995, but the royalties from this and related work at the NIH launched him to the top of the patent payment list nearly three decades after he left the agency.

And it didn’t stop Gallo from getting new jobs. In 1996 he became co-founder and director of the Baltimore-based Institute of Human Virology (IHV) at University of Maryland, one of the roles he continues to hold today.  

Gallo the Government Grantee

As reported on the OpenTheBooks.com state employee salary database, Gallo’s most recent salary at the institute founded within the Maryland state university was $750,000 in 2021, paid by taxpayers. 

According to its website, IHV is “the first center in the United States—perhaps the world—to combine the disciplines of basic science, epidemiology, and clinical research in a concerted effort to speed the discovery of diagnostics and therapeutics for a wide variety of chronic and deadly viral and immune disorders—most notably HIV, the cause of AIDS.”

A major contributor to Gallo’s high salary is likely his ability to attract grants to support the institute he directs, a job he seems to do very well.

Federal checkbook records since 2008 show that IHV has received $473,555,577 in grants and contracts from U.S. Health and Human Services (HHS--the parent agency to NIH) and $9,991,709 from USAID.

Once situated at IHV, Gallo leveraged his position to launch two other initiatives.

Gallo the Biotech Founder

While directing IHV Gallo co-founded biotechnology company Profectus Biosciences in 2003, which was touted at the time “as the commercial vehicle that would turn Gallo's research into commercial products.” 

The company was acquired by Aurobindo Pharma in February 2020. Its now-defunct website had listed Robert Gallo as a member of its scientific advisory board as late as 2013. A later news report also noted that Gallo worked with Profectus Biosciences to develop an AIDS vaccine through human clinical trials that began in 2015. 

In 2020 the company was described on its website as, “a clinical-stage vaccine development company pioneering a major evolutionary step in the design and development of preventive and therapeutic vaccines for infectious diseases and oncolytic vaccines for cancer immunotherapy.”

Like IHV, Profectus Biosciences has also successfully attracted funds from federal agencies. Since 2008, the company received $78,519,105 from HHS and $65,540,242 from the Department of Defense. 

The company bragged about its impressive collection of intellectual property, including “U.S. and international patents and patent applications to the original breakthrough discoveries by Wyeth [a pharmaceutical company] and other third parties which have been licensed or sublicensed to Profectus.”

Did those licenses include any of Gallo’s from his time at the NIH?

Because NIH redacts licensee information, we don’t know. But through data transparency we could see if--or how--funding can flow from inventor to licensee to agency and back again. 

Gallo the Non-profiteer

While directing IHV and serving on Profectus Biosciences’ scientific advisory board, Gallo co-founded the Global Virus Network (GVN) in 2011, a 501c3 nonprofit. He currently serves as GVN’s International Scientific Advisor. His son Marcus also serves as the organization’s Research Analyst & Centers Manager. 

The organization has a relatively small revenue – raising $331,980 in contributions in 2019 – but GVN boasts a powerful network, which it convenes in regular international meetings attended by hundreds of virologists. 

According to its website, GVN is a “coalition comprised of eminent human and animal virologists from 69 Centers of Excellence and 11 Affiliates in 37 countries worldwide, working collaboratively to train the next generation, advance knowledge about how to identify and diagnose pandemic viruses, mitigate and control how such viruses spread and make us sick, as well as develop drugs, vaccines and treatments to combat them.”

Among the 69 “Centers of Excellence” in the network is Gallo’s own well-heeled IHV at the University of Maryland.

Another Center is the Wuhan Institute for Virology, which came under scrutiny during the COVID-19 pandemic as the possible origin for the virus. 

Despite these potential concerns, WIV was added to GVN’s “Centers of Excellence” in January 2021.

Gallo later suggested investigators simply believe whatever Wuhan scientists said about COVID-19 origins, telling the Washington Post in June of that year, “We either take [the Wuhan lab’s] word for it, or we send you over with some muscular guys and we draw their blood. Would we tolerate that? No, we would not.”

As evidence linking the Wuhan lab to COVID-19 piled up, news reports from October 2021 revealed that gain-of-function research on coronaviruses was funded by the NIH through contractor EcoHealth Alliance at the Wuhan lab. 

Nevertheless, in an IHV annual report published in January 2022 Gallo continued to run cover for the Wuhan lab, calling implications that the virus originated from the lab “unfounded” and that speculation around the question was “anti-Asian.” 

He admonished investigations into Chinese scientists and said “​​I firmly believe that we need to strengthen connections between China and the rest of the world, and one way to do this is through the Global Virus Network (GVN), which I co-founded and of which IHV is a leading Center of Excellence.”

One month later Gallo published an op-ed in TIME titled “Knowing the Origins of COVID-19 Won’t Change Much,” diverting attention away from allies at the NIH and Wuhan.  

In the article he argues that while it would be “nice to know” the origins of COVID, “the best way forward may be to minimize the distraction of a politicized attempt to assess origins while, instead, investing in long-term international collaborative endeavors on SARS-CoV-2 and in preparation for future epidemics and pandemics.”

GVN has not received federal grants related to the organization’s mission, but did receive $123,054 in 2021 from the Small Business Administration in COVID-19 aid. 

Gallo collects no reported salary from GVN, but the connections the organization provides, coupled with Gallo’s proven fundraising abilities from federal agencies, underscore the need for further transparency and scrutiny into how American taxpayer dollars flow around the world. 

Gallo’s Friends in High Places

All told, the various organizations Gallo has co-founded have received at least $627.7 million in federal funding. But equally valuable is the intricate and self-reinforcing network of private, university, and public institutions built throughout his long career. 

IHV regularly collaborates with professionals from the NIH, its most recent annual report is peppered with references to research and programs conducted jointly between the organization’s scientists or with NIH funding. 

Similarly, GVN used a recent $1 million grant from an anonymous donor to launch a mentorship program, with involvement from the NIH. Elodie Ghedin of the National Institute of Allergy and Infectious Diseases at the NIH served as an evaluation committee member for the new program. She later said “we are confident that this opportunity can lead to further collaboration with a variety of GVN projects and help foster the rising stars’ career path.”

To make matters cozier, the Food and Drug Administration’s Office of Vaccines Research and Review is counted among GVN’s “Centers for Excellence.” FDA is an agency responsible for approving drugs for market use, and is under the Department of Health and Human Services (the parent department of NIH as well).  

“We are pleased to join the GVN in an official capacity, as we have participated in GVN activities since its inception,” said FDA OVRR director Konstantin Chumakov in 2019, “We will continue working with the GVN to facilitate the sharing of information to develop and evaluate effective vaccines.”

As if there were any doubt of the close bond between Gallo and his NIH counterparts—Anthony Fauci wrote a glowing tribute to him in a 2015 Washington Post article about Italian-Americans that should be celebrated instead of Christopher Columbus.

And in case connections with federal bureaucrats aren’t helpful enough, the nonprofit GVN provided a platform for Gallo to urge more NIH funding for virus research in testimony to Congress in 2014. 

Gallo’s testimony said in part “it has been estimated that every $1 of NIH funding generates about $2.21 in local economic growth. Nations have an enlightened self-interest of protecting human health while also protecting economic growth.”

Perhaps “nations” are not alone in their “enlightened self-interest”!

We Need Transparency

Since leaving the NIH in 1995, Robert Gallo has developed an interlocking network of private, nonprofit, university, and federal collaborators and funders across the globe. 

His NIH patents continue to put him at the top of royalty payment receivers at the agency long after he moved on, and NIH has plowed hundreds of millions of dollars into the organizations he has co-founded since 1996. 

These patent licenses need transparency. The NIH doled out $32 billion in government grants last year alone, understanding how those grants benefit patent holders, including the NIH itself, is a critical next step in untangling the complicated nexus between pharmacy companies, research institutions, and the federal workforce. 

We reached out to IHV and GVN for comment but received no response. As we discovered while requesting comments, IHV’s Chief Communications & Public Affairs Officer Nora Samaranayake (who made $137,000 in 2021 as a state employee) is also the Public Relations Senior Advisor at GVN. It is unclear if she is also compensated for her role at GVN. 

Note: At arms length, all transactions described in this article are legal, however, the patterns are troubling and more transparency is needed.

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