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HHS Advisory Group Proposes Gene Patent Limits, Riles Industry

By Matt Jones

NEW YORK (GenomeWeb News) – A government committee at the US Department Health and Human Services today voted to advise HHS Secretary Kathleen Sebelius to limit the ability of holders of gene patents to keep others from using those genes for diagnostic and research purposes.

Critics say that the proposals would amount to a major change of important US patent law, would hinder industry innovation and commercial opportunities in genetics, and would lead to fewer gene-based technologies making their way to the clinic.

The Secretary's Advisory Committee on Genetics, Health, and Society today agreed to send Sebelius a report that recommends creating a specific statutory exemption from infringement liability for genetic tests that use genes patented by another party, and another exemption for scientists who wish to use patent-protected genes for research.

"By undermining the value of gene-based patents, these recommendations would chill future investment and innovation in this area, and would unfairly upset the investment-backed expectations of current patent owners and licensees," a group including industry representatives, technology transfer offices, and patient advocates, and led by the Biotechnology Industry Organization (BIO), said in letter to Sebelius this week.

Less controversial were the committee's other recommendations, which include pursuing measures aimed at ensuring access to genes that may be useful but are patented, enhancing transparency in licensing, and creating an advisory body to measure the health impact of gene patents and licensing. SACGHS also proposed that the US Patent and Trademark Office be provided with "needed expertise" on genetics and gene-based technologies, and that measures be considered that would ensure equal access to clinically useful genetic tests.

Earlier this week, a judge in a US District Court in the Southern District of New York listened to oral arguments in a case that is questioning the legality of genetic patents and which could have significant implications on any proposed changes to existing laws.

In the case, the American Civil Liberties Union and Myriad Genetics both asked the judge to rule on whether the first amendment and patent laws allowed the patenting of genes. The ACLU had argued that these patents are unconstitutional and not allowed under current law, and Myriad Genetics countered that they are legal. The judge opted not to rule on the case at the current time, citing the complexity of the issues involved.

In the SACGHS report, originally completed by the Task Force on Gene Patents and Licensing in October, the committee justified its suggestions by saying that "a near perfect storm is developing at the confluence of clinical practice and law" in genomic medicine.

The cost of genetics research is "decreasing dramatically" while genomic knowledge is "growing exponentially," enabling the arrival of the much-heralded era of personalized medicine, the report noted.

"Trends in patent law appear, however, to pose serious obstacles to the promise of these developments," the SACGHS committee pointed out, citing "a host of problems such as patent thickets, blocking patents, high transaction costs, royalty stacking, and holdouts."

"Indeed, already, some laboratories using multiplex tests have chosen not to report to patients or clinicians the results for certain patent-protected genes for fear of being sued," the SACGHS report explained, adding that "evidence indicates that patents have already limited the potential of these tests."

Critics of the proposals say that such rules are not necessary, that the patent system works, and that the reports SACGHS used to develop its positions do not show serious problems with access to tests or to genes for research purposes.

At a BIO-sponsored press conference yesterday at The National Press Club, former SACGHS committee member Brian Stanton said that the committee had not found significant evidence of problems to date to support such proposed changes, that it had over-reached its original task, and that the rules would have unintended consequences, such as squelching private sector research.

"The original question of the task force was whether or not there is any empirical evidence that patents or licensing has affected genetic research," explained Stanton, who was a biotechnology quality assurance specialist at the USPTO and was director of the Division of Policy at the National Institutes of Health's Office of Technology Transfer.

"Somehow, in the [report's] last draft, the question asked was whether or not there was any evidence that licensing, intellectual property, or technology transfer was needed," he added.

"It is critical to bear in mind the difference between research and development," Stanton said, explaining that while much basic research is conducted with federal funding, the private sector plays a critical role in translational research aimed at developing specific products and treatments and seeing them through the lengthy and expensive clinical trials process.

BIO has focused its fire on how the SACGHS recommendations would affect the current patent system, which was created largely by the Bayh-Dole Act of 1980. That law was enacted to boost US competitiveness and economic growth by promoting the transfer of inventions that had resulted from Federal funding to the private sector for commercial development.

At the BIO press meeting, former US Senator Birch Bayh said that the legislation he co-sponsored with former Senator Bob Dole came at a time when the Federal Government owned all the inventions that came from federally funded research and US innovation was stagnating and investment in R&D was not growing.

He attacked the proposed rules as an "attempt to roll back the clock to implement the failed policies of the past."

"Ideas developed in laboratories need to reach the marketplace," he said, adding that there needs to be incentives to get people and companies to invest in such ideas. "This incentive would not exist unless the investor has a right to the patent in which he's investing," said Bayh.

"Collaboration fostered by the Bayh-Dole Act and fueled by massive amounts of private investment means that research is translated into tangible medicines, diagnostic tests, and other healthcare-related products that save lives, improve diagnoses, and alleviate suffering for millions of people worldwide," BIO President and CEO Jim Greenwood chipped in at the press conference.

In the report, SACGHS noted that the first proposed statute change "does not eliminate gene patents," and said that it is "narrowly tailored and only applied to diagnostic use of gene patents in the context of patient care."

The proposed exemption from infringement for research also is focused to apply to research to develop new genetic tests and therapeutics and to develop new methods of prognosis and risk assessment, the committee said.

The assurances in the report that these recommendations apply only in some cases has not assuaged critics of the new rules.

"Why let the camel get his nose under the tent?" Bayh asked.

The opponents of the recommendations also said in the letter to Sebelius that the SACGHS committee "ignored the public comments by organizations with experience in patenting and technology transfer, as well as thoughtful, dissenting views" of its own members.

The report will include a list of public comments, and it includes the dissent of three of its members.

The dissenting statement on the report was submitted by Mara Aspinal, president and CEO of On-Q-ity; Paul Billings, director and CSO at the Genomic Medicine Institute; and Sheila Walcoff, a partner at the law firm of McDermott, Will & Emery.

Aspinal, Billings, and Walcoff argued that the proposals to liberate some genetic research from patent liability is unwarranted, and is "a risky intrusion into a process that has delivered many key innovations to needy Americans."

They agree with the BIO position that the research that SACGHS used does not show that the current patent system has caused harm, but rather has led to more research investment. They also said that the data did not show that changing the system as has been proposed "would result in multiple laboratories performing proprietary tests with better quality than generated by current and developing oversight of quality assurance undertaken by these agencies and the laboratories themselves."

SACGHS' report is expected to be sent to HHS Secretary Sebelius soon.