Case Studies: Lessons for Labs from the Memorial Sloan Kettering & Paige.AI Alliance

What began as an alliance benefiting both parties has turned into a controversy that has tainted the reputation of one of the nation’s top research hospitals. Here’s a quick recap of the story of Memorial Sloan Kettering Cancer Center and Paige.AI and the lessons it offers to labs regarding conflicts of interest, patient privacy and the other perils to consider in pursuing opportunities for outside income.

Paige.AI & MSK
Paige.AI is a startup whose mission, according to its website, is to help “pathologists to be more efficient, researchers to be more quantitative, and patients to be more confident in their diagnosis.” Ultimately, Paige.AI aims to use artificial intelligence to one day change how cancer is diagnosed. These objectives made it naturally attractive to Memorial Sloan Kettering (MSK). The result was an exclusive licensing agreement between the two.

The idea of MSK’s entering into such a commercial arrangement with a for-profit company didn’t sit well with members of the medical community. Aggravating the problem is the fact that while Paige.AI operates as a separate company, it has close ties with its three founders’ affiliations with the MSK Cancer Center among whom:

• One is director of the computational pathology lab;
• Another chairs the department of pathology; and
• The third is on the MSK board of trustees and executive committee.

In addition, three other MSK board members have also invested in Paige.AI. MSK also holds an equity stake in the company.

Potential Conflicts of Interest
Because of their close ties, the arrangement between the parties has raised conflict of interest red flags among at least some MSK doctors and scientists from the beginning. Recent investigative reporting by ProPublica and The New York Times shows that these concerns have become deeper and spread to other business arrangements. Thus, MSK’s chief medical officer recently resigned because of failure to disclose financial ties to companies cited in his research articles.

Patient Privacy
Meanwhile, the negative publicity from this reporting has been internally disruptive and caused pathologists and others to step forward and voice their concerns about the Paige.AI arrangement. Among these concerns is patient privacy. MSK has reportedly licensed images of 25 million patients’ tissues slides and the hospital’s pathologists’ library of past work to Paige.AI.

Doctors have raised questions about whether patients consented to having their tissue used in this way. A hospital review board initially indicated that the issue was addressed via securing patient consent regarding overall information sharing. More recently, however, MSK has taken what appears to be a different position by calling attention to “information that was not clear in recent news stories.” A detailed statement at its website reads, “No patient tissue, patient slides, or protected health information has been or will be shared with Paige.AI. The patient slides are stored and remain in MSK’s possession.”

Non-Profit Issues
Experts in nonprofit law and corporate governance have also expressed concerns about the arrangement, according to The New York Times and ProPublica. Experts questioned “whether Memorial Sloan Kettering, which is a charity, acted properly in what is known as a related party transaction with the founders of Paige.AI.” Among the issues is that “charitable institutions like Memorial Sloan Kettering must show they didn’t provide assets to insiders for less than the fair market value.”

Clearly, there are numerous considerations when entering into a licensing agreement. The MSK agreement with Paige.AI serves as a cautionary tale.