HHS Assault on Gene Patents and Diagnostic Methods

UPDATED: 7:19pm on 10/8/2009

Today the Task Force on IP and Genetic Testing submitted its Final Draft Report (titled Final Draft Report on Gene Patents and Licensing Practices and Their Impact on Patient Access to Genetic Tests) to the Secretary’s Advisory Committee on Genetics, Health, and Society (SACGHS). SACGHS, in turn, voted to accept the recommendations, which will be passed on to Secretary Sebelius, Secretary for Health and Human Services. In this report the Committee comes to the shocking and surprisingly unfounded conclusion that “patents do not serve as powerful incentives for genetics research in the diagnostic arena, disclosure of gene-disease associations, or development of genetic tests.” This will no doubt be music to the ears of the many anti-patent advocates out there, but what makes this report, its recommendations and conclusions so bizarre is that the report itself provides facts and evidence that supports the completely opposite conclusion. To this extent it seems as if the conclusion was reached through some kind of political agenda in spite of the facts, or perhaps the report was originally written to come to a different conclusion and then was hijacked.  In any event, strap your boots on, the Committee is advising that the Secretary for Health and Human Services recommend to Congress the creation of an exemption from patent infringement liability for: (1) infringement of patent claims on genes for anyone making, using, ordering, offering for sale, or selling a test developed under the patent for patient care purposes; and (2) those who use patent-protected genes in the pursuit of research.  So gene patents would become like medical process patents; you can get them, just not enforce them.

[Bio-Pharma]

Here are some of the juicy and alarming details from the report, which I have seen, but which I understand is not being made publicly available for reasons I do not understand. What follows is a direct quote from the report:

The findings from the case studies, literature review, and public comments suggest that, although patents offer an incentive to companies to conduct research and develop genetic diagnostics, exclusive rights are not needed to advance the development of most genetic tests for patient care that are provided in the academic setting. It is worth noting that the case studies largely did not focus on the multiplex, multiple-condition predictive genetic tests that are expected to develop more frequently in the future. While these tests will likely be more expensive to develop, patent claims on genes are unlikely to stimulate investment needed to create these tests given that such patents would protect only a component of a multiplex test. Indeed, because multiplex tests involve multiple genes, patents on individual gene molecules may create a patent thicket—a prospect discussed more fully in a later section.

The Committee based this conclusion on a number of specific findings made during the course of the study:

• Most academic scientists appear to be principally driven to carry out research not by the prospect of obtaining a patent but rather by a mix of motives, including the desire to advance scientific and medical understanding, the desire to be successful in their careers, the desire to develop treatments for disease, and the desire to earn the esteem of their colleagues.

• The main factor driving the development of genetic tests in the academic setting is clinical need.

• Patents are not needed to give scientists an incentive to disclose gene-disease associations.

• Patents do motivate some investors to fund genetics research for the purpose of ultimately developing diagnostics or therapeutics. Patents also motivate some investors to fund efforts to develop a genetic discovery into a diagnostic test kit or testing service, although factors other than patents also influence this decision. Patents on genes associated with a rare disease may discourage investment to develop a genetic test for that disease.

• The case studies show that those researchers who did not pursue patenting were willing and able to invest in developing genetic tests soon after their discovery, despite the threat that “free riders” could then offer competing testing services.

• Development costs generally do not appear to pose a significant barrier for creating new diagnostic testing services. When a gene sequence and disease association is reported, diagnostic testing services quickly arise to meet clinical need without the need for patent incentives. If the patent incentive were necessary for the test to develop, the patent holder would be the only test provider upon entering the market; instead, the patent holder or exclusive licensee typically enters a market already populated by other test developers and providers, which are then shut down through enforcement of the patent rights—a phenomenon referred to as “clearing the market.”

• Although patented discoveries described in the case studies were also developed into tests, the fact that unpatented genetic discoveries were routinely developed into clinical genetic testing services suggests that patents are not needed for development of genetic tests.

• Patents likely play a more important role in the development of genetic test kits. There are greater regulatory hurdles that must be overcome for test kits than for testing services. Public comments suggested the possibility that the exclusive rights provided by patents make companies willing to invest the time and money needed to achieve regulatory approval for test kits.

• While the Committee did not identify any specific testing services or test kits that required the patent incentive to be developed, it may be that some test kits and novel testing services would not be developed without patents.

• If regulatory oversight of genetic tests evolves toward requiring costly independent review before marketing, patent protection may be needed for companies to be willing to risk resources in satisfying the regulatory requirements.

It seems that there is a lot of wishful thinking and conclusions drawn that contradict the findings.  How can patents play an important role, but not be important or necessary? How can patents provide motivation to some investors to fund genetics research for the purpose of ultimately developing diagnostics or therapeutics, but not be warranted?  How can a report like this completely and totally (by its own admission) ignore multiplex, multiple-condition predictive genetic tests that are expected to develop more frequently in the future?  Furthermore the report even indicates that these tests will be expensive to develop, but patents will not be necessary to stimulate investment needed?  A lot of hope is being placed on the altruism of academics and their ability to research, develop, implement, deploy and conduct testing.  What experience has shown since the enactment of Bayh-Dole legislation is that academics and research scientists are very good at discovering and engaging in science for the sake of science, but that from discovery to market there is a lot of uncertainty that requires commercial enterprises to undertake feasibility and scaling research and development, which requires capital investment.  This report completely ignores the reality of the pure, government funded science and acts like through some mystical black magic pure science will translate into widespread and deployed testing, diagnostics and treatments.  What is missing from the report is any discussion regarding how that will happen.

The conclusions reached in the report are enormously difficult to understand given that in significant places finding and conclusions seem contrary to the overall conclusions and recommendations of the report.  By way of example, this conclusion seems to completely undercut the position presented:

For the most part, patents covering genetic tests and related licensing practices do not appear to be causing wide or lasting barriers to patient access. However, the case studies and public comments documented several situations in which patient access to genetic tests has been impeded for segments of the population—especially indigent patients—when these tests are offered by an exclusive provider or a limited number of providers, a practice directly enabled by current patenting and licensing practices.

So let me get this right, Congress should exempt from patent infringement liability those who make, use order, offer for sale, or sell a test a patented genetic test, but patents are not creating barriers to patient access?  Someone is going to have to explain that to me very slowly I’m afraid, because every time I read this it seems clear that this finding suggests the exact opposite of what is being suggested.  I guess the rationale is that patents are so inherently evil that even though they cause no problems those who infringe should not have to pay.

But what about the indigent patients?  Right, indigent patients, or said another way those without money, are unable to access patented genetic testing.  But how is that any different than saying indigent people are unable to afford the latest patented pharmaceutical?  It isn’t any different, and that is the point.  Those who cannot afford health care should be given the same health care as those who can, or those who have insurance.  The fact that it will be rationed for everyone is of no consequence, at least everyone will be in the same boat, right?  But moving forward with this line of thinking why not say that patents are completely unjustified and we should throw away the entire patent system.  After, Apple Computer has a whole lot of patents on the iPod and various accessories, and that raises the cost so those without money cannot enjoy the pleasures of a portable MP3 player.  Never mind that there is NO evidence to suggest patents bar access.  They simply should not exist.

Wait a minute, perhaps we are on to something here!  Maybe what we should do is simply conclude that patents are unjustified across the board.  I mean if the pharmaceutical companies and biotechnology companies, which tend to be largely right-leaning are causing problems then why not also acknowledge that the left-leaning high-tech companies that are strong Obama supporters are similarly skewing the playing field?  Why don’t we just level the playing field, throw out all patents and let India, China, Hong Kong and Taiwan import whatever electronics devices they want regardless of patents.  Obviously this has no chance to happen because while politicians are more than happy to play fast and loose with innovation policy if it pleases their base they are not about to take out and shoot their high-tech supporters.