Yale's $1.5M Ketamine VA Settlement Spotlights Private-Public Partnership Complexities

by Staff Writer
September 25, 2023 at 10:05 AM UTC

intranasal ketamine

Clinical Relevance: Ethics matter in publicly funded research

  • Yale and one of its psychiatry professors settled a lawsuit with Veterans Affairs for $1.5 million over undisclosed ketamine patents.
  • The settlement brings ethical questions about public-private research partnerships to the forefront.
  • The case could set a precedent for transparency in managing publicly funded research.

In a landmark settlement that exposed complex legal and ethical questions regarding private and public research partnerships, Yale University and John Krystal, MD have agreed to pay more than $1.5 million to the Department of Veterans Affairs (VA). This resolution comes in the wake of allegations that both the university and psychiatry professor failed to disclose certain ketamine-related patents and to share patent royalties for inventions developed while Krystal was serving dual roles at Yale and the VA.

“Universities and their professors must properly disclose and share royalties on inventions they discover while working for the government,” said Principal Deputy Assistant Attorney, General Brian M. Boynton in a government statement on the matter. 

The settlement addressed alleged misconduct spanning from March 2006 to February 2023. During this period, Dr. Krystal worked part-time at Yale, serving as a professor of psychiatry, neuroscience, and psychology. He was also a part-time salaried clinical psychiatrist at the VA Medical Center in West Haven, Connecticut.

“It is critical that inventions funded with taxpayer money be fully and timely disclosed to the government,” stated U.S. Attorney Vanessa Roberts Avery. She added that this settlement should serve as a stark reminder of the need for transparency in the management of publicly funded research and inventions.

Clinical Effectiveness of Intravenous Racemic Ketamine Infusions

Ketamine for Treatment Resistant Depression and Suicidal Ideation

Ketamine in the Real World

The Dispute

The crux of the issue centered on patents related to the use of intranasal ketamine for the treatment of depression and suicidal ideation. Krystal and his co-inventors applied for several such patents, acknowledging VA funding in the applications. Despite this, neither Yale nor Krystal shared the royalty payments—now totaling more than $3 million—with the VA.

The VA claimed an ownership stake in the patents, citing its partial funding of the research and development. Government agencies like the VA retain certain rights, including potential ownership or financial interests, when their funding produces inventions. In this case, since the VA contributed funding to the research that led to the patents, they asserted their right to an ownership stake and a share of the associated royalty payments.

“The VA Office of Inspector General is committed to ensuring the VA is appropriately and fairly compensated for all intellectual property developed through VA-funded research projects,” said Special Agent in Charge Christopher Algieri.

The ball started rolling on legal action when a VA employee reminded Krystal of his obligations to disclose inventions. That’s when he finally submitted the required disclosures. The VA then determined that it was entitled to an ownership stake, a decision later upheld by the National Institute of Standards and Technology, the U.S. federal agency that develops and promotes research to enhance productivity, innovation, and security.

Future Impact

The settlement resolved the allegations of nondisclosure and also those related to breach of contract and unjust enrichment by Yale and Krystal. As part of the agreement, Krystal has relinquished any claim to the settlement amount. In a separate agreement, Yale and the VA have agreed to share future royalties and assign patent ownership to the VA.

Although the resolution closes this chapter of the legal saga, it opens a new level of scrutiny for publicly funded research. As U.S. Attorney Vanessa Roberts Avery pointed out, the settlement shows a “commitment to ensuring that the government is fairly compensated for all taxpayer funded inventions.”

Growing Use

Ketamine started out as an anesthetic and a recreational drug, but in recent years has gained clinical acceptance as an antidepressant. Studies show it can rapidly reduce symptoms of depression and suicidal thoughts in people who haven’t responded to other treatments, usually within 24 hours or less. Typically given as an infusion or a nasal spray under medical supervision, ketamine works by affecting certain brain chemicals and receptors. 

Experts don’t consider ketamine a first-line treatment for either depression or suicidal ideation. However, there is increasing evidence to suggest that it can be a lifesaving option for some patients in acute distress. According to the Ketamine Clinics Directory, a website that features ketamine clinics that meet a standard of safe practices, have a history of ketamine service, and don’t engage in questionable patient care, there are more than 500 ketamine clinics across the U.S.

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