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A Utah life science company soon will be under a microscope as the U.S. Supreme Court weighs in on a challenge to its patents. Myriad Genetics will be defending itself against an objection to the idea that it can patent an isolated DNA molecule.
Is DNA a product of nature that no one can own rights to? Or is it the result of inventive research and processes that can be patented? The answer to these questions will have far-reaching impacts on life science companies, researchers, the healthcare industry and patients.
Origins of the Dispute
Myriad Genetics was born out of a collaboration with researchers at the University of Utah, the National Institutes of Health and other academic researchers. Together, they sequenced BRCA1, a gene associated with an increased risk for hereditary breast cancer. The company later sequenced BRCA2, another breast cancer gene, and patented both BRCA1 and BRCA2 in concert with the University of Utah Research Foundation.
Myriad then developed a predictive test for breast and ovarian cancer associated with these genes, and that test, BRACAnalysis, has proved lucrative for the company. In total, the BRACAnalysis tests brought the company $405 million in revenue for fiscal year 2012, according to Myriad’s annual report.
The lawsuit was brought by the Association for Molecular Biology (AMP), along with several university researchers, patient advocacy groups and individual patients. These plaintiffs, who are represented by the American Civil Liberties Union, say that genes should not be patentable, and that such patents stifle additional research and drive up costs for patients and the healthcare system.
The case was originally decided in the plaintiffs’ favor by the U.S. District Court in New York, but Myriad appealed to the Federal Circuit Court. That court reversed the original decision, and then upheld the reversal upon a second review.
At that point, the ACLU requested the U.S. Supreme Court hear an appeal of the case. In late 2012, the Supreme Court agreed to hear the case and is expected to do so this session.
The Battle Lines
The plaintiffs’ chief argument is that “you can’t patent naturally occurring items—chemicals, compositions that occur in nature,” says Grant Foster, partner with Holland & Hart. Foster, who is not part of the case, is registered to practice before the U.S. Patent and Trademark Office and has extensive experience litigating patent infringement cases.
If the patents were not in force, other companies could offer the predictive tests for BRCA1 and BRCA2, driving down costs for patients and the healthcare system. Also, researchers would be free to pursue their own lines of inquiry involving these genes.
“Judge Bryson, who wrote the dissenting opinion at the Federal Circuit, used a leaf analogy and said basically that what Myriad had invented was equivalent to plucking a leaf off of a tree. And just as a leaf separated from a tree shouldn’t be patentable, just because it’s plucked from its tree, similarly isolating DNA molecules shouldn’t be patentable,” explains Foster.
“The reality is Myriad Genetics has developed a way of isolating DNA molecules to allow those molecules to be used in genetic testing,” he says. The federal judges who ruled in favor of Myriad said that process of isolation is “a work of human transformation requiring skill, knowledge and effort,” and therefore “is surely what the patent law is intended to encourage and protect.”
When the Supreme Court announced it would review the case, Myriad Genetics CEO Peter Meldrum released a statement noting that, “Myriad devoted more than 17 years and $500 million to develop its BRCAnalysis test. The discovery and development of pioneering diagnostics and therapeutics require a huge investment, and our U.S. patent system is the engine that drives this innovation.”
The company insists that BRCAnalysis tests are widely available—that its patents haven’t made it cost prohibitive for women to obtain testing. It says that 95 percent of all patients in the United States have access to the tests through private insurance or Medicare and Medicaid, leaving them with an out-of-pocket cost of less than $100.
Myriad also notes that research continues on the genes, with the support of Myriad Genetics. “More than 18,000 scientists have studied the BRCA genes and published more than 9,000 research papers, making these genes among the most widely researched genes in history,” it said in response to the Supreme Court announcement.
Weighing the Outcomes
“So you have a struggle with people who would like to see very beneficial technologies used for as many people as possible, on the one hand,” says Foster, “with companies who invest millions and millions of dollars in research and development into these types of diagnostics and therapeutics—they want to protect those efforts and try to take advantage of the patent system.”
Foster says the Supreme Court ruling has the potential to have a very significant impact in the life science arena. If it reverses the Federal Circuit ruling, companies will start using the test “with impunity” and competition will drive prices down.
“On the flip side, there will be less incentive for big companies that are dealing with gene sequences to spend time and money developing these sophisticated processes. I personally believe the healthcare system in general will lose if the Myriad case is reversed by the Supreme Court,” he says.