Big Pharma Paid $690 Million To Fauci’s Agency Through Secret Third Party Royalties During Pandemic Years

Payments to Dr. Anthony Fauci’s agency and colleagues from private pharmaceutical firms under obscure licensing and royalty schemes skyrocketed during the pandemic. Thanks to two federal lawsuits demanding transparency that were filed by Open the Books, we now know more details that do not inspire confidence in the relationship between Big Pharma & Big Government.

In 2022 and 2023, pharmaceutical and healthcare companies paid the National Institutes of Health a sum of $710,381,160 in third party royalties. These were payments to NIH, its leadership and scientists by healthcare entities licensing inventions created in federal, taxpayer-paid labs. The two-year average of such payments over the prior decade was less than $5 million, for an increase of more than 175 times.

Fauci’s institute, The National Institute of Allergies and Infectious Diseases (NIAID) received $690,218,610 of the $710 million, or 97%. In the same period, the other 26 institutes under the NIH received some $26 million in total.

It was an extreme cash haul at Fauci’s institute: Between 2009-2021, OpenTheBooks.com, the organization I founded and lead, previously reported that $325 million was paid to all NIH institutes. Fauci’s NIAID received $23.9 million of that – or an average of $2 million per year.

NIH and NAID wasted countless taxpayer dollars illegally resisting the requirement to tell taxpayers what was happening with their tax dollars. That’s because in the next two years – 2022 and 2023— Fauci’s institute collected the equivalent of 175 years in NIAID royalty payments. Nearly $690 million in just two years vs. $23.9 million over 12 years.

Open the Books had to sue NIH twice in federal court over their royalty payment database with Judicial Watch, their legal partner, as counsel. It’s been a two-and-a-half-year battle to open the NIH books.

Big Pharma Pay$ Big Royalties

In the years 2022 through 2023, from the government disclosures, the top companies ranked by the number of payments into named scientists employed by Fauci’s NIAID could not be linked by dollar amounts, because NIH is redacting the amount paid to each scientist.

Some of these companies, like Merck and GlaxoSmithKline, are recognizable as some of the largest pharmaceutical companies in the world. Other notable top companies include:  State-owned Chinese vaccine developers Changchun BCHT and China National Biotech Group; Intranasal vaccine developer Blue Willow Biologics; Taiwan-based Medigen Vaccine Biologics Corp, which developed the MVC COVIC-19 vaccine 
.

Just this list raises all kinds of potential conflict-of-interest questions such as how much money did the Chinese state-owned vaccine developers pay NIH on third party royalties during a period when Fauci, NIH, and their colleagues did all they could to hammer down the Wuhan lab-leak theory?

While it’s clear vaccine developers are licensing patents from the NIH, it is unclear if those patents are related to COVID-19 treatments.  The NIH provided un-redacted license numbers as a part of the OpenTheBooks.com lawsuit, however, the agency’s active license database , which describes the technology being licensed, only runs until fiscal year 2020.

We reached out to NIH to ask why this database is not updated. As is typical, they ignore such questions.    Without an up-to-date database connecting patents to NIH licenses, auditors cannot match the medical invention to the payment from a private company.

Pfizer and Moderna are not among the top royalty payers during this time – based on payment count. Moderna made 29 payments to named scientists and Pfizer made nine. Moderna did settle litigation with NIH in February 2023 for a $400 million payment for their licensing of Covid-vaccine technologies, but it is unknown if any of these funds are reflected in our data.

As more questions pile up around NIH’'s involvement in pandemic policy, and even pandemic origins, it is crucial the full dataset is unredacted as a step towards restoring trust in this agency.

Top Royalty Receiving Scientists At Fauci’s NIAID (2022-2023)

Because we do not know the amounts paid in each transaction, we do not know if these scientists received the highest dollar figures—only that they received the most royalty payments. We assume that there is a correlation between the number of payments and the total amount received but cannot know for certain until payment totals are disclosed.  

The top five payment recipients and their current and former positions, if known: 

•    Dean Metcalfe, Chief of the Mast Cell Biology Section, NIAID, 79 payments


•    Arnold Kirshenbaum, position unknown, 79 payments


•    Cem Akin, former fellow at NIAID, current clinician-scientist and a Professor of Medicine at the University of Michigan Division of Allergy and Immunology, 78 payments


•    Peter Kwong, former Chief of the Structural Biology Section, Vaccine Research Center, NIAID, current co-director of the Aaron Diamond AIDS Research Center at Columbia University, 53 payments


•    Tongqing Zhou, current Chief of the Structural Biology Section, Vaccine Research Center, NIAID, 46 payments.


Nearly 5,000 Royalty Payments still have the name of the scientist redacted. As a result of this federal litigation, NIH was forced to uncover the names of scientists receiving royalties, which they’d initially redacted. So, for the first time since 2005, when the Associated Press did a similar investigation, we are able to see each name of the royalty receiver on the payment line. (However, NIH continues to redact the dollar amount of the payment in materials provided—something they did not do with the Associated Press 20 years ago.)

Why the names of NIH scientists are considered “confidential” or “trade secrets” is unexplained. In FY 2022 and FY 2023, when royalty payments to NIH scientists hit record highs, 936 payments were made to scientists with redacted names. Of those, 299 payments flowed to scientists affiliated with NIAID.  

Conflict of Interest—Fauci’s Vax Maker

The federal government gave Moderna grants of nearly $10 billion from 2020-2022 to develop a Covid-19 vaccine and to deliver doses. From 2013-2017 the Department of Defense gave Moderna $60 million to develop its mRNA technology. Between 2018 and 2023, 44 scientists at NIH received royalty payments from Moderna and one of those scientists was John Mascola.\

John Mascola joined the NIH in 2000, and since 2013 directed the Vaccine Research Center, an office under Fauci’s NIAID. In other words, he was Fauci’s vaccine maker. During the pandemic, Mascola was charged with leading Operation Warp Speed, the government program focused on developing a COVID-19 vaccine.

What the general public didn’t know, and NIH has spent tax dollars to fight tooth-and-nail not to disclose, is that Mascola had been receiving royalty payments from Moderna since 2018. So, Mascola was leading the very committee that would choose the vaccine… and Moderna had been paying Mascola royalties for his own inventions at NIAID since 2018.

Mascola has stated publicly that he didn’t choose Moderna out of self-interest, but from an understanding of their operations and he knew the odds of success were higher.  Tensions between Moderna and the NIH were revealed in a rare public patent dispute, where the agency accused the company of wrongfully leaving NIH scientists—including Mascola—off a lucrative patent related to Covid-19. 

Moderna eventually settled the dispute, adding the NIH scientists to the patent and paying out $400 million to the NIH. It also promised payments to the agency in the low single digits of future vaccine sales. NIH has not disclosed how much of those payments went to NIH scientists. 

The Fight Continues: Legislation and Litigation 

Open the Books is not giving up the fight for royalty transparency. Their federal court cases with Judicial Watch continue.   Congressional leaders such as Senator Rand Paul (R-KY)  has repeatedly confronted NIH leaders like Fauci, and current NIH director Lawrence Tabak, about the potential conflict of interest these payments represent.  

Senator Paul introduced the Royalty Transparency Act, which passed unanimously out of the Senate Homeland Security and Government Affairs Committee in early March. The measure is a needed reform. Requiring federal government employees to include their royalty payments in their financial disclosures, which would then be public.