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Posts Tagged: "Gene Patents"

U.S. Companies and Groups to Congress: the Section 101 Reform Draft is Good and Genes are Safe

Seventy-two companies and organizations, ranging from Tivo to Bristol-Myers Squibb and from the American Conservative Union to the Alliance of U.S. Startups & Inventors for Jobs (USIJ)— as well as retired Federal Circuit Chief Judge Paul Michel—have sent a letter to Senators Thom Tillis and Chris Coons and Representatives Hank Johnson, Doug Collins, and Steve Stivers in support of the current draft language to reform Section 101 of the U.S. Patent Act. The letter comes as the patent community eagerly awaits a new version of the bill, following three hearings and 45 witnesses in which most voiced their general support for the approach taken in the draft, but several sticking points were identified. The next iteration is expected soon after Congress’ July 4 recess.

The Only Way to Counter False Claims on Patent Reform is to Enter the Debate

Coverage of the ongoing patent reform debate in the Senate Judiciary Committee by the popular press has been alarmist and largely incorrect. For example, even just yesterday—five days after the final hearing on patent eligibility reform concluded—the top story in Google’s patent alert results was “Corporations shouldn’t be able to patent your DNA,” which leads with the sentence, “The practice of patenting genes, once banned by the Supreme Court, may come back soon despite a measure of horror the very idea once inspired.” It would seem that those companies and entities that oppose reform to patent eligibility requirements are not going to meaningfully participate in the political process, and instead will wield their considerable PR machines in an effort to confuse, conflate and misdirect the public as part of their ongoing scheme to suppress innovation in America. Indeed, we know that the high-tech industry was invited to testify before the Senate Judiciary Committee, but refused, as Senator Thom Tillis (R-NC) explained at the second hearing. Why would the high-tech industry choose to ignore these Senate hearings, where many dozens of witnesses both for and against reform were invited to share their views?

Two Observations on Last Week’s Senate Hearings on Patent Eligibility Reform

Last week, all eyes were on the first two days of historic Senate Judiciary IP Subcommittee Hearings, led by Senator Thom Tillis (R-NC), Chair of the Subcommittee, and Senator Chris Coons (D-DE), Ranking Member of the Subcommittee. The purpose of the hearing was simple: to determine a fix for the disaster foisted upon the industry by the patent eligibility jurisprudence of the Supreme Court of the United States. The testimony of the first 30 witnesses has already been summarized, so there is no need for me to dive into the particulars of who said what here. Suffice it to say that the Subcommittee heard a range of opinions—some better supported than others.

Universities: Fallen Angels or Stewards of Bayh-Dole?

University discoveries are recognized as critical national assets because Bayh-Dole gave academic institutions the ability to own and manage inventions made with federal funding. The law helped lift the economy out of the doldrums of the 1970’s, re-establishing America’s leadership in every field of technology…. While the critics argue that Cohen-Boyer would have had the same impact without patent protection, there are other more likely scenarios. It could have languished on the shelf as did many other published, but not patented, discoveries. It took a lot of work from Reimers before U.S. companies recognized its potential. That effort would not have been made to promote a scientific paper.

SCOTUS Blog founder asks Supreme Court to reconsider Mayo ruling in Sequenom v. Ariosa

This is as straightforward a certiorari candidate as any patent case can be. It is manifestly important: A host of judges and amici have stressed that the result below is untenable— invalidating previously irreproachable inventions and precipitating what Judge Lourie called “a crisis of patent law and medial innovation.” And this is the vehicle this Court needs to provide that clarification: Every opinion below agrees that this case tests Mayo’s uncertain limits by invalidating an otherwise plainly meritorious invention. Here, unlike Mayo, every intuition points towards patent-eligibility. And yet the Federal Circuit felt compelled by Mayo to condemn this meritorious patent—and, a fortiori, the patents underlying an entire, vital field of American healthcare innovation.

Australia Releases Guidelines on Patentability of Genetic Material – Now That’s How It’s Done

The Australian Patent Office yesterday released its new guidelines in response to Australia’s High Court decision on the patentability of genetic material. The good news for Australia, though cold comfort for us on the other side of the Pacific, is that the Australian Patent Office has shown our counterpart US institutions the correct way to interpret and apply an important new case carving specific subject matter out of the broad default of patent eligibility. Rather than declaring ineligible from patenting everything under the sun “involving” a law or product of nature, Australia has instead read the High Court’s decision faithfully yet narrowly to exclude exactly what it said it excluded.

PTO Report on Confirmatory Genetic Testing: A Worthwhile Effort But Not Far Enough

The USPTO has released its ‘Report on Confirmatory Genetic Diagnostic Testing,’ which was prepared to fulfill the requirements of §27 of the Leahy-Smith America Invents Act. The USPTO did make an interesting observation that has been reflected in its patent examining guidelines. The USPTO Report concludes that ‘it is unlikely that exclusive provision of a diagnostic test, whether for an original diagnosis or to confirm the original result, will be possible based on patenting and licensing behavior.’ This statement reinforces the USPTO’s prior broad interpretations of the Court’s findings in Mayo and Myriad. Of note is that in the USPTO Report, the USPTO adopts the Supreme Court’s factually and scientifically unsupported distinction between genomic DNA and cDNA.

Naked Emperors: A Supreme Court Patent Tale

The idea that the Supreme Court is at all capable of understanding — let alone deciding — issues of a technical nature is ridiculous. Yet their individual and collective lack of knowledge hasn’t prevented them from reaching misguided decisions in a variety of cases. Like an Emperor without any clothes the Supreme Court seems blissfully ignorant of their own ignorance. Indeed, you would have to go out of your way to find nine less qualified people to decide issues of a technological nature.

Australia Court Says Isolated DNA Patent Eligible, Slams SCOTUS

On the very same day that the U.S. jobs report shows unexpectedly weak growth, the Federal Court of Australia issued a ruling directly opposite to the ruling rendered by the United States Supreme Court relative to gene patents. In Yvonne D’Arcy v. Myriad Genetics, Inc., the Federal Court of Australia ruled that Myriad’s claims to isolated DNA are patentable under the laws of Australia. That is the correct ruling, and it is the ruling the U.S. Supreme Court should have reached in Association of Molecular Pathology v. Myriad Genetics. As the patent eligibility laws of the U.S. become increasingly inhospitable to high-tech innovative businesses we can expect more job losses and worse news for the U.S. economy on the horizon.

High Noon for Bayh-Dole

Senate Judiciary Committee Chairman Patrick Leahy (D-VT) asked NIH in a July 12 letter to force compulsory licensing of Myriad’s BRCA breast and ovarian cancer genetic test under the “march-in rights” provision of the Bayh-Dole Act. Myriad received an exclusive license to develop the test from universities operating under Bayh-Dole Act. The law allows nonprofit institutions receiving federal R&D funds to own and license resulting inventions so they can be commercialized for use by the public. Critics of Bayh-Dole have long sought to reinterpret its statutory standards under which the government can compel universities to issue compulsory licenses as a weapon to control prices. This was not the intent of the law.

Why SCOTUS Myriad Ruling Overrules Chakrabarty

The Supreme Court quite directly contradicts the reasoning of Chakrabarty in Myriad. Thomas explains that it is a fact that isolated DNA is nonnaturally occurring, but still nevertheless not patent eligible. Whether we like it or not, the very foundation of the Supreme Court’s decision in Chakrabarty has been overruled, or at the very least significantly cut back. Arguments to the contrary are simply wishful thinking and ignore the explicit language of the Myriad decision.

USPTO Instructs Examiners to Reject

USPTO to Examiners: “As of today, naturally occurring nucleic acids are not patent eligible merely because they have been isolated. Examiners should now reject product claims drawn solely to naturally occurring nucleic acids or fragments thereof, whether isolated or not, as being ineligible subject matter under 35 U.S.C. § 101.”

Supremes Rule Isolated DNA and Some cDNA Patent Ineligible

You can expect a near complete cessation in many areas of personalized medicine. If creating something in a lab, such as a composite cDNA, does not make the underlying claims patent eligible because what results is indistinguishable from what appears in nature that means that the fledgling and potentially promising technologies to grow organs for transplantation will shrivel up and die. The whole point is to create an organ that is indistinguishable from what appears in nature so that it can be transplanted into a human body to prolong life. Given the breadth of this opinion and the uncertainty it will cause funding will dry up in the U.S.

A Patient-Centric Look At Gene Patents

One of the central policy issues injected into the current case of AMP v. Myriad Genetics is whether the BRCA patents are good for innovation and ultimately for patients. Specifically, ACLU and PubPat allege that the patents have hindered research, blocked innovation, and harmed patient access to BRCA testing. No matter how many times these allegations are repeated, all available evidence shows concerns over research and innovation to be unfounded. More importantly, two natural experiments give us an opportunity to evaluate actual patient access to testing, the ultimate measure of whether the patents are doing their job of incentivizing delivery of new technology to the public. Both of these experiments show that exclusive licensing of strong “gene patents” not only does not harm patient access to quality testing, but is instead vital to it.
In the impassioned words of Linda Bruzzone, a Lynch syndrome mutation carrier and head of Lynch Syndrome International: “Many of us with Lynch Syndrome wish there had been a patent in place for us. It would have protected us and perhaps protected the lives of our loved ones.” L. Bruzzone, Oral Comments at USPTO Public Roundtable on Genetic Diagnostic Testing (January 10, 2013), available at http://www.uspto.gov/aia_implementation/uspto_genetic_testing_roundtable_transcript20130110.pdf.
If There Really Was a Problem, Shouldn’t We Have Seen Something by Now?
Commentators have expressed concern about so-called “gene patents” from the beginning. Perhaps the most popular theory underlying opposition to gene patents is the “tragedy of the anticommons” proposed by Michael Heller in 1998. The theory essentially goes as follows:
In an anticommons, by my definition, multiple owners are each endowed with the fight to exclude others from a scarce resource, and no one has an effective privilege of use. When there are too many owners holding rights of exclusion, the resource is prone to underuse — a tragedy of the anticommons.
Heller, The Tragedy of the Anticommons: Property in the Transiton from Marx to Markets, 111 HARVARD LAW REV. 621 (1998).
Heller and Rebecca Eisenberg attempted to apply this new theory of the anticommons to biomedical research, with particular emphasis on DNA patents. See Heller & Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 SCIENCE 698 (1998). This article caused quite a stir in the academic community, with numerous authors parroting the theory and, most problematic, presenting the “tragedy” as specifically applied to gene patents as a fact.
More recently, those studying biomedical innovation have begun to amass an impressive body of research showing there is no anticommons at all. For example, a 2005 study found that researchers rarely worried about patents and patents caused no project abandonments. Walsh et al., View from the Bench: Patents and Material Transfers, 309 SCIENCE 2002 (2005) (“[O]f 381 academic scientists, even including the 10% who claimed to be doing drug development or related downstream work, none were stopped by the existence of third-party patents, and even modifications or delays were rare, each affecting around 1% of our sample.”). A 2007 study found “[v]ery little evidence of an ‘anticommons problem.’” Am. Ass’n. for the Advancement of Sci., International Intellectual Property Experiences: A Report of Four Countries 23, at p.12 (2007). The list goes on and the evidence is mounting: “[T]here is at present no strong evidence that the ‘anti-commons’ concern has had a major impact on the research community.” Caulfield, Human Gene Patents: Proof of Problems, 84 CHICAGO-KENT L. R. 133, 136 (2009).
A careful review of the original Heller & Eisenberg article makes these findings unsurprising. While gene patent opponents co-opted the Heller & Eisenberg paper as the primary theoretical basis for their claims of harm, the paper explicitly contrasted patents directed to fully characterized genes (which would clearly include Myriad’s) against patents to uncharacterized gene fragments (i.e., expressed sequence tags or ESTs). In fact, Heller & Eisenberg appeared to accept as unproblematic “patents on genes generally correspond[ing] closely to foreseeable commercial products, such as therapeutic proteins or diagnostic tests for recognized genetic diseases.” Heller & Eisenberg at 699 (emphasis added). It was the NIH’s practice of patenting numerous ESTs, with no discernible function but which might incidentally cover an unforeseeable product, that for Heller & Eisenberg introduced the possibility of an anticommons. They were essentially worried about an EST thicket (which never materialized).
The recent findings of a lack of any anticommons effect have led some commentators to push back against the impassioned calls for, e.g., bans on gene patents. “Surely, if patents caused a problem warranting immediate policy action, there would be some clear, discernible effect.” Caulfield at 138. As noted by Christopher Holman:
The paucity of documented examples in which the fears surrounding gene patents have manifested themselves is striking, particularly when one considers the high level of public concern and the extraordinary nature of the proposed legislative fix.
Holman, The Impact of Human Gene Patents on Innovation and Access: A Survey of Human Gene Patent Litigation, 76 UKMC L.R. 295, 300 (2006). In other words, if there really was a pernicious problem as ACLU and others claim, shouldn’t we have seen something by now?
Patents Incentivize Investment in and Commitment to Translation From Basic Discovery to Commercial Availability
The absence of any evidence of a systemic problem should be enough to dismiss claims of harm caused by gene patents. But some simply cannot let go of the theory on which they built their ideological case against gene patents. Unfortunately for the misguided attack on gene patents, even the supposed epitome of what is wrong with gene patents turns out to instead be a brilliant example of what is right.
Many gene patent opponents focus on the initial discovery of the BRCA genes and invention of isolated BRCA-related DNA molecules, arguing it would have happened with or without Myriad. But for those who take the long-view and are genuinely concerned about actual patient access to life-saving technologies more than theories, the whole inquiry is irrelevant. The real question is whether, without the patents, the basic science discovery would have been successfully translated into a widely-available, quality product for patients.
First, a quick look at Myriad’s efforts and struggles to deliver the gold standard in genetic sequencing to as many patients as possible. Myriad has invested over $500M in developing and refining its BRACAnalysis® product and, more importantly, in raising physician, patient, medical society, and insurance company awareness of hereditary breast and ovarian cancer (HBOC) syndrome. A recent study found that such investment in public awareness for genetic tests that are non-exclusively licensed does not happen:
In the context of breast cancer testing, Myriad has a strong incentive to “get the word out” about genetic testing for inherited risk of breast cancer. This incentive is stronger for BRCA testing, for which Myriad is sole US provider, than for colon cancer testing, where there are alternative providers. […] The social benefit from this incentive is more public knowledge of test availability.
Cook-Deegan et al., Impact of gene patents and licensing practices on access to genetic testing for inherited susceptibility to cancer: Comparing breast and ovarian cancers with colon cancers, GENET. MED. (2010) 12:S15-38.
It took 17 years before Myriad finally broke even and became a profitable company. Myriad has spent years and millions of dollars collaborating with hundreds of researchers studying the BRCA genes and has performed tens of thousands of free tests to establish the clinical importance of BRCA testing. As result of this investment, numerous medical societies have clear, well-validated guidelines on who should get tested and virtually all major private and public payors reimburse BRACAnalysis® testing (such that the average out of pocket cost to patients is less than $100.). Further, Myriad has generous programs to help uninsured and underinsured patients get affordable access to BRCA testing.
It wasn’t just a monetary investment that the patents spurred; Myriad’s commitment goes much deeper than money. For example, many in the mid- to late-1990s actually opposed widespread clinical testing of the BRCA genes. As reported in a 1999 article in Reason Magazine,
[A] 53-member panel of ethicists and lawyers chaired by Stanford University law professor Henry Greely [declared] “The test for BRCA1 should be confined to the research setting.” […] The ethics panel advised women not to take the commercial test for BRCA1….
[…]
Francis Collins, the director of the Human Genome Project, agreed in U.S. Senate testimony in 1996 that the BRCA1 test should not be commercially available to women. According to Collins, the information that a woman might get from such a test is “toxic.”
Bailey, Warning: Bioethics May Be Hazardous to Your Health, available at www.reason.com/archives/1999/08/01/warning-bioethics-may-be-hazar/print. Bioethics and the wisdom of giving patients distressing genetic information are still controversial today. But the question of whether the concerns were well-founded is beside the point. It is difficult to imagine any company without a strong, exclusive patent position enduring years of losses to overcome this kind of opposition and deliver life-saving testing to patients.
Patent Exclusivity Increases Access to HBOC Compared to Lynch Testing
Delivering quality testing to as many appropriate patients as possible should be the ultimate goal of the patents and, thus, the ultimate measure of whether the BRCA patents are beneficial. Not how many providers offer the test. Not whether researchers subjectively feel unfettered to tinker with the genes. Not whether integrated or public health systems can maximize workflow efficiency by performing the test in public hospitals. Comparing testing levels of HBOC syndrome versus Lynch syndrome in the United States shows that the BRCA patents have led to wider patient access to higher quality testing.
Background. HBOC syndrome is a disorder caused by a mutation in, e.g., BRCA1 or BRCA2. Lynch syndrome is a disorder caused by a mutation in a mismatch repair genes, which predisposes a person to colorectal, endometrial, and other cancers. HBOC and Lynch share numerous similarities that make for an excellent comparison between exclusivity and non-exclusivity in genetic testing. For example:
• Similar prevalence in overall population …
– HBOC ~ 1/400
– Lynch ~ 1/440
• Similar prevalence in cancer population …
– HBOC ~ 7% of breast cancer
– Lynch ~ 3-5% of colorectal cancer
• Similar prevalence/mortality for breast cancer and colorectal cancer
– Breast cancer ? 2nd most commonly diagnosed cancer & 3rd highest in estimated yearly deaths
– Colorectal cancer ? 4th most commonly diagnosed cancer & 2nd highest in estimated yearly deaths
• Similarly drastic increases in cancer risk with each syndrome
– HBOC

– Lynch

The patent landscapes for HBOC and Lynch are quite different, however. The patents first disclosing the BRCA genes are exclusively licensed to Myriad, while the patents for the Lynch genes are non-exclusively licensed. As such, NCBI’s Genetic Testing Registry lists only one provider of full-sequence BRCA analysis (Myriad) and 15 providers of Lynch testing.
Myriad itself offers Lynch syndrome testing. Using internal Myriad data based on market analysis and competitive intelligence, the following statistics show that this difference in patent landscape has driven a marked difference in test quality and utilization.
Pricing. One of the most common allegations by gene patent opponents is that gene patents lead to higher prices. This is clearly untrue as to HBOC v. Lynch. As noted by the Duke IGSP: “Prices for BRCA1 and 2 testing do not reflect an obvious price premium attributable to exclusive patent rights compared with [Lynch] testing, and indeed, Myriad’s per unit costs are somewhat lower for BRCA1/2 testing than testing for [Lynch].” Cook-Deegan at S15 (Abstract).
Quality. Some allege that patents lead to patent holder complacency and lower test quality. This is also untrue. One of the best examples is the issue of variants of uncertain significance (“VUS”). A VUS is a change in a patient’s gene where it is currently unclear whether the change leads to increased risk of disease. Myriad has invested $100Ms in reclassifying VUS. As a result, Myriad’s VUS rate is less than 3% for HBOC while the rate of VUS for non-Myriad Lynch providers ranges from 15% to 30% depending on the gene. Similarly, Myriad’s average turn-around time for BRCA testing is less than two weeks, while the average for non-Myriad Lynch providers is around double that.
Access. Finally, far more patients get tested for HBOC than for Lynch. From June 2010 to the present, Myriad tested nearly 340,000 patients for HBOC. Over the same period, just over 70,000 patients received Lynch testing. Thus, a single, incentivized provider performed almost 5X as many HBOC tests (of higher quality at a similar price) as 15 different Lynch providers. Again quoting Linda Bruzzone on the problem of a lack of “ownership” in genetic testing:
It is our belief, had there been a single patent for Lynch syndrome, public awareness would be far more enhanced. More physicians would have knowledge of the condition in order to diagnose affected persons. Tests would be improved and confusion over the testing process would alleviate with one central repository. Many more lives would have been saved. Many of our families wish there would have been one central company, with a patent and believe it could have saved the lives of our families.
L. Bruzzone, Written Comments on Genetic Diagnostic Testing Study, USPTO Public Roundtable on Genetic Diagnostic Testing (January 10, 2013), available at http://www.uspto.gov/aia_implementation/gen_e_lsi_20130207.pdf.
It Is the Same Story When BRCA Testing Is Compared Between US and Europe
Perhaps an even better comparison than HBOC versus Lynch is a comparison within HBOC: USA versus Europe. While nominal differences between HBOC and Lynch are very unlikely to account for the marked difference in quality and utilization, comparing US BRCA and European BRCA excludes even these differences as possible causes.
For this analysis, data was compiled from data that Myriad separately commissioned from a third-party consultant to analyze the HBOC testing market in five key European countries: Germany (DE), France (FR), Switzerland (CH), Italy (IT), and Spain (ESP). Considering these countries as a group, which I will call simply “Europe” for the purposes of this article, they are roughly comparable to the US in both population and per capita GDP (Europe is roughly 75% of US in both measures).
The patent landscapes for BRCA in the US and Europe are quite different. While Myriad has exclusive license to BRCA patents in Europe, the attitude in Europe toward the patents is very different from the US. N. Hawkins, The Impact of Human Gene Patents on Genetic Testing in the UK, 13 GENET. MED. 320 (2011) (“[G]ene patents are essentially ignored.”). As such, NCBI’s Genetic Testing Registry lists only one provider of full-sequence BRCA analysis in the US (Myriad) and 25 providers in Europe. This difference in provider exclusivity has driven a striking difference in test quality and utilization despite similar or better prices at Myriad.
• Pricing

– BRCA testing in CH reimbursed at 5,500€ until Myriad entered Europe (dropped in response to Myriad’s lower test price)

• VUS Rates

– The five European countries have VUS rates ranging between >7X and >11X that of Myriad.

• Average Turn-Around Time (in weeks)

In Switzerland, for example, the average patient would wait five months and have more than a 30% chance of getting an inconclusive result. That same patient tested by Myriad would get a result within two weeks and have less than a 3% chance of an inconclusive result, all for a price that is 25% lower.
Access. What about actual patient testing, our “ultimate measure” of the value of the patents? Far more patients get tested for HBOC in the US than in Europe. Adjusting for population differences, none of the countries in this sample reaches even 40% of the proportional utilization of HBOC testing in the US:

In other words, a single, incentivized provider performs between 2.5X and 6.5X as many HBOC tests (of higher quality with faster turn-around time) as 25+ different HBOC testing providers.
What Can We Learn From This?
Many gene patent opponents attack the patents on innovation grounds (“They stifle innovation”). All available evidence shows this to be false. Some attempt to link gene patents to harms in patient welfare (“The patents lead to more expensive, lower quality tests”). Myriad’s experience shows there to be no link.
An endpoint analysis of how many patients get what quality of testing at what price under the exclusive provider and non-exclusive provider models shows that the incentives found only in an exclusive provider model result in better, faster, reasonably-priced tests delivered to vastly more patients. The data presented here suggest a significant positive effect of gene patents on patient access and explain the yearning amongst many patients for an incentivized standard-bearer in genetic testing. When coupled with the complete lack of data suggesting any negative effect, these data strongly warn against the drastic “solutions” to a non-existent problem offered by gene patent opponents (e.g., invalidating in the Myriad case 30+ years of patents on which the biotech industry is built).

Bio-Pharma at the U.S. Supreme Court

Since my last article here on IPWatchdog.com, the pharmaceutical industry has been simply overflowing with interesting developments, including the US Supreme Court hearing arguments concerning three significant cases. The first case argued at the Supreme Court will determine whether generic drugmakers can be sued for alleged flaws in the design of their medications. Another argument before the Supreme Court was about pay-to-delay deals in which a brand-name drugmaker agrees to pay a settlement to a generic rival in exchange for ending patent litigation and launching a copycat medicine at a future date. The Court also heard arguments about a case that raises crucial questions about whether human genes can be patented. And the outcome may well reset the boundaries and direction of medical research in the US, which of course has tremendous implications for investments made by the biopharmaceutical industry and the battle against many diseases, notably cancer.