The Financialist

The question of whether genetic material can or should be patented by pharmaceutical companies is being tested in courts both in the U.S. and overseas.

On Monday, the U.S. Supreme Court heard an appeal by the American Civil Liberties Union and the Public Patent Foundation against Myriad Genetics Inc., a Utah-based private biotechnology company that holds patents on the BRCA1 and BRCA2 genes, two genetic mutations associated with breast and ovarian cancer.

The case pits groups that want freer access to gene mutations against companies who argue that they need patent protection to recoup research and development costs.

According to Myriad’s website, approximately 7 percent of breast cancer cases and up to 15 percent of ovarian cancer cases are caused by mutations in the BRCA1 and BRCA2 genes. It says people with mutations of either gene have “risks of up to 87 percent for breast cancer and up to 44 percent for ovarian cancer by age 70.” The company’s $3,340 BRACAnalysis test identifies the mutations.

The Supreme Court decision is expected by June, and Credit Suisse analysts have said other firms would quickly enter the market if the company loses patent protection, forcing Myriad to lower prices.

“The frustration that many in the medical community have toward the way (Myriad) has profited from its BRCA patents should not be underestimated when they are given an opportunity to help find an alternative to using (Myriad) for their BRCA tests going forward,” Credit Suisse analysts Vamil Divan and Jeremy Joseph wrote in a note entitled “Assessing How SCOTUS May Move MYGN.”

Under U.S. law, a DNA sequence can be considered for patenting by the U.S. Patent and Trademark Office if the patentee alters its environment or structure. Myriad’s patents were approved because the BRCA genes were isolated from their natural environment, giving Myriad the right to prevent anyone else from testing, studying or even looking at the genes.

The American Civil Liberties Union (ACLU), which represents the Association for Molecular Pathology, argues that patents on human genes violate the First Amendment and U.S. patent law because genes are “products of nature” and therefore can’t be patented.

“By patenting the genes, Myriad obtained the rights to exclude all other medical and scientific work on the genes,” ACLU attorney Sandra Park told The Financialist. “It enforced its patents to create a monopoly on BRCA genetic testing offered to patients.  It therefore faces no competition for its genetic testing services, even when other laboratories could provide testing that is more comprehensive or lower-priced.”

Myriad declined to comment, but argued on its blog that patent protection encourages innovation. In its most recent quarterly earnings report, Myriad said revenue from the BRACAnalysis test, which represented 74 percent of the company’s total quarterly revenue, was $110.3 million, a 9 percent increase over the same period of the prior year.

“Without the patents, our work would not have been possible,” the company said. “We would not have been able to raise the funds necessary to decode the genes, design and deliver the tests, interpret the results, and help patients.”

“We did not patent the genes in your body, and neither does any other company,” it continued. “Instead, we patented synthetic molecules based on the genes that were created in the lab in order to deliver life-saving tests to patients.”

In February, Australian Federal Court Justice John Nicholas dismissed a 2010 lawsuit brought by advocacy group Cancer Voices Australia and breast cancer patient Yvonne D’Arcy against Melbourne-based Myriad and Genetic Technologies, which has exclusive rights to the testing in Australia and New Zealand. The plaintiffs attempted to block the companies’ Australian patent, which covers mutations of BRCA1. No Australian court had ever been asked to consider the question of whether isolated human genes are patentable, and Justice Nicholas decided that the process of isolating the BRCA1 gene for testing constitutes a patentable action. But in his ruling, Nicholas said there was “no doubt that naturally occurring DNA and RNA as they exist inside the cells of the human body cannot be the subject of a valid patent.”

The ruling means that in Australia, only Myriad can continue carrying out tests with the gene mutation. Genetic Technologies is not currently enforcing its ownership rights under patent laws, though it could at any time, potentially halting medical research and testing in Australia.

Lawyer Rebecca Gilsenan, who represented Cancer Voices Australia and D’Arcy, has said her clients would appeal. That appeal is likely to be heard later this month.

The ACLU contends that unless gene patents are overturned, scientists at universities, laboratories, and biotechnology companies will continue to face difficulty developing new tests, drugs and other information based on genetic information and sequencing.

“Genetic tests currently exist to screen the multiple genes now associated with breast and ovarian cancer, but these clinical tests cannot include the BRCA genes because geneticists would be legally liable,” Park said. “Scientists are aware of which genes are patented and choose not to pursue research on those genes for fear of patent liability.  Moreover, gene patents allow a single laboratory to use its patents to control most of the data about a gene.”

Steven L. Salzberg, Professor of Medicine, Biostatistics, and Computer Science at Johns Hopkins University, told The Financialist the argument that isolating DNA means it’s somehow different is a “very unscientific argument.”

Salzberg said there are patents on thousands of human genes already, but only a few have such a significant influence on the chance of developing cancer.

“The outcome of this case might see a whole lot of companies come out and enforce [their patents],” said Salzberg.

For more on this story go to:

http://www.thefinancialist.com/can-you-really-patent-a-gene-vamil-divan-credit-suisse/