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Hearing on Second-Opinion Genetic Testing Highlights Risks of Athena's Exclusive Licensing Practices


Lawyers challenging Myriad Genetics' patents underlying its BRACAnalysis genetic test have made no secret of the fact that a similar case could very well have been brought against Athena Diagnostics.

The Quest subsidiary markets more than 300 diagnostic tests, many of them for genetic conditions. Like Myriad, but operating more quietly, Athena has enforced its suite of exclusive patent rights on gene sequences and testing methods to restrict the activities of academic and commercial labs and maintain its position as the sole provider of tests for various diseases — such as a test for hereditary hearing loss that gauges mutations in the GJB2 gene.

At a meeting last week hosted by the US Patent & Trademark Office, Arti Rai, an intellectual property law professor at Duke University, highlighted Athena's practice of securing exclusive licenses for genetic tests from academic developers to suggest that the federal government has the legal power under the Bayh-Dole Act to grant additional licenses for patents that have been funded in some part with taxpayer dollars.

During the meeting, which was webcast, Rai highlighted data from an unpublished survey by Duke researcher Subhashini Chandrasekharan and others that looked at 93 patents licensed to Athena, most of which, if not all, the company exclusively licensed, and found that 40 patents involved federal funding.

"Athena's business model is essentially built on acquiring exclusive rights [to patents on gene sequences and testing methods] and being the sole provider for genetic tests," Chandrasekharan, a research assistant professor at Duke's Institute for Genome Sciences & Policy, told PGx Reporter. Of the 93 patents on genetic tests, reviewed as of March 2010, 47 included at least one claim on a DNA sequence and 64 involved at least one claim on a diagnostic method or only method claims.

"The company has primarily licensed its intellectual property from academic universities and other non-profits," which commonly depend on federal research grants, Chandrasekharan added. Athena "has been quite active in enforcing its intellectual property rights, sending cease-and-desist letters to other academic centers that are offering genetic tests that Athena believes are infringing its IP rights."

Boston University, for example, stopped providing a handful of tests in 2008 due to Athena's enforcement of its exclusive licenses of genetic testing patents. A number of other academic labs have had similar encounters with Athena, but several of the labs contacted by PGx Reporter declined to be interviewed or only agreed to share their experiences anonymously.

Sherri Bale, managing director at the diagnostic company GeneDx, however, wasn't shy about discussing her firm's run-ins with Athena. According to Bale, Athena is "one of the bad players" when it comes to the use and enforcement of exclusive licenses for patents on genetic tests. "With the shortage of federal funding for research and those who do this kind of work, the fact that a company can come in and take over testing [with an exclusive license] … really sticks in my craw," she said. "I don't think there should be any exclusive licenses for projects that the government has funded."

Exclusive licensing of federally funded research has been an underlying tension in Association for Molecular Pathology et al. vs. USPTO et al., a case in which healthcare providers, genetics researchers, and cancer patients are challenging patents that Myriad has exclusively licensed that underlie its hereditary breast and ovarian cancer risk test BRACAnalysis. The plaintiffs, represented by the American Civil Liberties Union and the Public Patent Foundation, have succeeded in invalidating several of Myriad's broad patents around methods of testing gene markers in the Court of Appeals for the Federal Circuit. The case is now headed to the Supreme Court, where justices will consider the validity of Myriad's patents on isolated gene sequences, which plaintiffs have argued don't meet the patentability requirements under US law because the claims on stretches of isolated DNA are identical to DNA sequences naturally occurring in the human body.

It is well known that funding from the National Institutes of Health played a critical role in helping Myriad win the race to sequence the BRCA1 gene and identify mutations linked to breast cancer. However, according to documents filed in the AMP vs. USPTO case, when the University of Utah patented the finding and exclusively licensed it to Myriad, the institution did so without listing as co-inventors six researchers from the National Institute of Environment Health Sciences who were financially backed by NIH and were part of the 45-person team that sequenced the gene. The NIH and Myriad got into a legal tussle over this. After the NIH filed its own BRCA 1 patent application, however, Myriad added the NIEHS researchers' names to the patent.

According to the court filings, the NIH contributed around one-third of the funding for the discovery of BRCA1.

In the Myriad case, "the NIH is … co-owner of several relevant BRCA1 patents," Rai said during the USPTO meeting. As AMP vs. USPTO has progressed through US courts, however, only one patent still at issue in the case lists the US federal government as an original assignee.

In AMP vs. USPTO, even if the Supreme Court upholds the patentability of isolated gene sequences, the NIH does have some leverage to award additional licenses related to BRCA testing if it chooses to use its "march-in" authority under Bayh-Dole, a power the government has yet to exercise.

Rai noted at the USPTO meeting that beyond the Myriad case, the government perhaps has even more influence to use the march-in provision to award licenses to patents underlying genetic tests for colon cancer, Alzheimer's disease, spinocerebellar ataxia, and long QT syndrome, some of which Athena holds exclusive licenses for and all of which came about with the help of federal funds. Athena did not respond to a request for comment ahead of press time.

Of course, in granting exclusive licenses, universities also play a part and should be particularly careful about giving full control of a federally-funded patent to a single company. But, Rai acknowledged, that universities with patents advanced with taxpayer dollars, aren't always forthcoming about identifying the funding source.

Will the Government March In?

Athena's enforcement of its gene diagnostic patent rights came up as part of a USPTO meeting held last week to discuss whether Congress should exempt from patent infringement labs that conduct confirmatory genetic tests that are otherwise protected by patents and exclusive licenses. The America Invents Act, a patent reform law enacted in September 2011, has instructed the USPTO to prepare a report on this matter and suggest actions Congress can take, if any, to ameliorate any patient access issues to second-opinion genetic testing.

The report was initially due last June, but the USPTO felt it didn’t have enough information on the matter to make recommendations to Congress. Hoping to address the remaining gaps in knowledge, the patent office held a third meeting, where several speakers suggested that the US government can use provisions already granted under the Bayh-Dole Act to make second-opinion genetic testing available in certain cases if the underlying patents resulted from federally funded research.

The Bayh-Dole Act, which gives universities, small businesses, and non-profits the right to patent inventions developed with taxpayer dollars, also includes a march-in provision that allows funding agencies to override an exclusive license and grant additional licenses. To date, no federal body has exercised the march-in clause, although the NIH has received petitions requesting that it do so.

"March-in is a very controversial provision and in many cases, even cases involving genetic diagnostic testing, the US government may not own all of the relevant patents," Rai said at the meeting. "Nonetheless, I don't believe that should be a showstopper with respect to thinking about marching in, in cases where additional investment is not necessary to attract interest in diagnostic testing."

For example, Rai said that exclusive licensing of patents for the specific purpose of developing a US Food and Drug Administration-approved kit or developing a therapeutic may be appropriate. "But an 'all-exclusive-for-all-fields/types-of-use' license is a problem," she told PGx Reporter over email. "That prevents even relatively low-cost [secondary] testing in CLIA-approved labs (i.e. without the kit)." Myriad does not have regulatory approval from the FDA for BRACAnalysis but instead runs the test as an LDT through its CLIA lab.

According to Mark Rohrbaugh, director of NIH's Office of Technology Transfer, the NIH rarely grants exclusive licenses for patents it owns. "By law and policy, we limit the use of licenses to the scope needed as a reasonable incentive for commercializing a product," Rohrbaugh said, noting that for patents that NIH owns it awards exclusive licenses if the commercial product requires significant financial risk or investment to develop. For example, he noted that the NIH might exclusively license a family of patents to develop FDA-approved drugs for a particular disease condition, but non-exclusively to develop test reagents.

Between 1984 and 2010, the NIH executed 56 licenses with at least one nucleic acid claim, which have been used to launch 94 protein-based tests and services and 23 nucleic acid test products and services. Only three of the licenses after 1990 were exclusive, including one patent family related to the BRCA test to which Myriad holds sole rights.

Myriad has highlighted that millions of dollars in private funding were necessary to commercialize BRACAnalysis. In addition to the several millions of dollars that NIH provided to NIEHS and University of Utah researchers who were collaborating with Myriad in sequencing the BRCA1 gene, the company raised $10 million in a private stock offering in 1993 and received $1 million in equity and $1.8 million in research funding from Eli Lilly.

However, the fact that federal funding played a significant part in bringing about the discoveries underlying Myriad's test is sufficient reason, some argue, for the government to allow broader access to the relevant patents, which could lead to more competition in the diagnostics market, enable more patient choice, and lower the cost of testing. In the opinion of GeneDx's Bale, however, relying on the march-in provision to break up monopolies in the genetic testing market may be wishful thinking. "The NIH is just too wimpy to use its march-in authority," Bale said. "They've never done it. Why in the world do they have it if they're not going to use it appropriately?"

Rohrbaugh said during the meeting that the NIH considers its march-in authority to be "most useful as a deterrent" in that merely having a discussion with companies about potentially using this power negates the need to use it. "Agencies may use this authority when … they determine that there is sufficient information to invoke a march-in procedure," he said. "The fact that it exists is an incentive for owners and licensees of federally owned technologies not to act in a manner that would invoke its use."

Ultimately, the discussion on whether to exempt labs performing second-opinion genetic testing from patent infringement circles back to the question of whether gene sequences and broad diagnostic methods should be patented at all, since many researchers believe that there is no way to work around such patents. Bale believes that these meetings on second-opinion testing are the USPTO's backdoor attempt to mollify the patient access issues created by gene patents.

"This business of the USPTO focusing on second-opinion testing is weak," she said. "To those who say that we can fix things by fixing the licensing issue, I say we can fix the whole thing by doing away with gene patents."

Plenty of presenters at all three USPTO meetings urged the office to not support second-opinion testing through policy changes, arguing that such action would weaken the existing patent system. Some asserted that confirmatory genetic testing is unnecessary due to limited demand, and others spoke about how a patent exemption for such testing would limit companies' ability to attract private funding necessary for commercializing diagnostic tests.

Leonard Svensson, a partner at Birch Stewart Kolasch Birch LLP who specializes in biotech patents, warned at last week's meeting that allowing a lab to perform second-opinion testing wouldn't necessarily ensure that the testing was accurate, reliable, or of high quality, and could end up harming patients. Without measures to ensure that second-opinion testing is accurate, "it could lead to less quality medical care for patients," said Svensson, who at the meeting was representing BIOCOM, a trade association representing 550 life sciences companies in Southern California.

Acknowledging that most patients are unlikely to seek confirmatory testing from Myriad since it is the primary provider of BRCA tests, Richard Marsh, Myriad's general counsel, maintained that Myriad "has not seen a measureable number of inquiries or requests being made to identify other labs where testing could have been done." Even if second-opinion testing was exempt from infringement liability, Marsh and others pointed out that US payors don't cover this additional intervention.

"I think the patent system works," he said at the meeting. According to Marsh, Myriad has tested approximately 1 million people for their risk of hereditary breast and ovarian cancer.

Anecdotal Harm

Test developers such as Myriad and Athena who secure exclusive licenses from universities claim that stringent patent protection is necessary to recoup the private investment needed to commercially launch their tests. Although Athena has largely stayed quiet during the ongoing legal debates on gene patenting, Myriad has maintained that its enforcement of its patents hasn't harmed patient access or restricted breast cancer genetics research.

Researchers and doctors working closely with patients, meanwhile, have plenty of stories about how exclusive licenses and patents around genetic testing have hindered access to tests and slowed the pace of science. But individual anecdotes are hard to quantify into a measure of harm and are easy to dismiss as one-off cases. "Any patient concerns raised in this debate aren't really patent-related," BIOCOM's Svensson said at the USPTO meeting. "The concerns that we have heard are actually insurance coverage issues. So, any proposed solutions should be focused on understanding or solving those problems."

Robert Cook-Deegan, director of the Center for Genome Ethics, Law & Policy, was dismayed that some speakers at the meeting denied that patents and exclusive licenses on genetic tests have created challenges for researchers seeking to discover the significance of rare gene markers for disease and for patients looking for verification that their genetic test results are accurate.

Cook-Deegan, who has closely tracked the impact of genetic test patents on researchers and patients, recently published a paper in the European Journal of Human Genetics in which he and others asserted that by creating a proprietary database of gene-disease associations, Myriad is essentially denying researchers, physicians, and patients access to "basic scientific and medical information" that would improve their knowledge of variants linked to cancer and enable more accurate diagnoses. The authors of the paper are concerned that the proprietary database will enable Myriad to maintain its control over the BRCA testing market indefinitely, well beyond the scope of its patents (PGx Reporter 11/2/2012).

In an effort to place a human face to the problem, at the USPTO meeting, Cook-Deegan highlighted the story of a woman who got tested with BRACAnalysis in 2008 and was told by Myriad that she had a high-risk mutation. The following year, based on the results of the test, she underwent surgery to remove both her breasts and her ovaries. Her doctor received notification six months later from Myriad, however, that the company had reclassified the patient's mutation as having "unknown significance" in terms of the risk it confers for hereditary breast and ovarian cancer.

"What we have is that a lab that has done a million tests has reclassified [a marker] from high risk to intermediate risk, but all of the public documents … say this is a deleterious mutation," Cook-Deegan said. He added that several labs have tested for this mutation, knowing that they are risking enforcement action from Myriad, but still they haven't been able to verify the significance of this particular mutation.

"It's quite possible that Myriad is right, but it's also quite possible that it's a deleterious mutation," Cook-Deegan said, noting that the way to get a definitive answer in such cases would be for labs to share their research. "But the labs that did the testing and the clinicians that know about this stuff can't possibly notify Myriad, because they would then be laying down the trail for infringement liability, absent an explicit policy" protecting against that.

In the commercial sector, GeneDx and Athena have knocked heads over a number of tests in the past, but the case that bothers Bale most is the interaction between the two companies over testing for mutations in the GJB2 gene. Athena offers a sequencing test for hereditary hearing loss that gauges various mutations in the entire coding region of the GJB2 gene, and specifically, holds an exclusive license for the 35delG mutation in the region, the most common marker underlying hereditary hearing loss. GeneDx, meantime, offers a test for a very rare, autosomal dominant skin disorder, called keratitis-ichthyosis-deafness syndrome, which is caused by a different mutation in the GJB2 gene that is located in the same region as the hearing loss mutations.

Since by sequencing that particular region of GJB2 GeneDx would pick up on whether patients have hearing loss-associated mutations, Athena asked GeneDx in 2006 to stop conducting testing for the keratitis–ichthyosis–deafness mutation. "We never do testing for non-syndromic hearing loss. We sequence this very, very small gene, looking for dominant mutations that are not mutations that Athena is looking for to gauge hearing loss," Bale explained.

Initially Athena tried to stop GeneDx from sequencing the region of interest in the GJB2 gene, which Bale refused to do. "We sequence the whole thing. It's one coding exon. That's what we're being paid for and we have to look at every position, because there aren't common mutations associated with keratitis-ichthyosis-deafness," Bale said. "So, I can't design a single test and only look at one place."

After much back and forth, GeneDx eventually agreed that if it found a patient who harbored a common GJB2 mutation associated with deafness, it had to inform the doctor that the patient had a mutation that the firm cannot report due to its agreement with Athena, and refund the money for the test. Moreover, GeneDx also had to recommend that the doctor redraw a blood sample from the patient and send it to Athena for testing.

Because the hearing loss mutations are common, GeneDx has had to often swallow the cost of testing patients for keratitis-ichthyosis-deafness-linked mutations, according to Bale. "So, it costs GeneDx, which has already done the work. It costs the patients, because they have to make another trip to the doctor, pay for another doctor's visit, another blood draw, and then pay again for Athena's test," she said. "It's unbelievable, and it really bugs me."

In another example, an academic molecular diagnostics lab that was interested in offering a genetic panel for hereditary hearing loss interacted with Athena some years ago to garner a license for the patent covering the 35delG mutation. "Athena wanted a per-test fee that was more than the total cost of the Connexin 26 test," the head of the academic lab told PGx Reporter on the condition of anonymity. "I think they wanted $500 dollars per test, and we weren't even charging that much to run the whole test. It was ridiculous."

Even though Athena was willing to offer a license to the lab for the specific mutation, the company was under no obligation to quote a fee that the university lab could afford. "My perception of it is that Athena made the fee so high that no one would ever pay it and they would essentially be the only provider," the lab director said.

Given these examples, Cook-Deegan challenged those who claim that exclusive licensing practices around genetic tests aren't creating research hurdles and access issues for patients. "I was especially discouraged at the spin statements that the problem does not exist," he told PGx Reporter. "It's not a common problem, but it exists and will get worse with more and more whole-genome analysis. Denial is a stupid strategy for an issue that has already bred a congressional mandate."