Originally published Feb. 17.
By Turna Ray
Instead of altering the scope of the US patent system through legislation, the federal government and industry stakeholders should consider other types of policy measures to facilitate public access to second-opinion genetic testing in cases where patents and exclusive licensing practices allow one company to be the sole provider of a diagnostic, several speakers recommended at a public hearing hosted by the US Patent & Trademark Office.
The USPTO this week hosted the first of two public meetings to gather information on whether gene patents and exclusive licenses have limited patients' access to confirmatory testing from independent diagnostic providers. Through these meetings, the patent office is also hoping to garner input on whether allowing a safe harbor for such secondary testing would diminish incentives for patent holders to develop innovative products, as well as gather data on how cost and insurance coverage impact genetic testing access.
Under a provision in the America Invents Act, a patent reform law enacted last September, the USPTO is required to prepare a report on secondary genetic testing and submit it to Congress by June 15. This week's meeting was held in Alexandria, Va., and the second public meeting on this topic will be held on March 9 in San Diego. Public comments to the Federal Register are due by March 26.
Prior to the passage of the patent reform bill, House Representative Debbie Wasserman Schultz (D-Fla.) had introduced an amendment that would include a safe harbor for diagnostic providers if they performed a test "solely for the purpose of providing [an] individual with an independent confirmation of results obtained from another test provider" that holds a license or a patent to the test.
However, lobbying efforts led by the American Civil Liberties Union — which was already leading a legal challenge to invalidate BRCA patents held by Myriad Genetics and the University of Utah — convinced Schultz to scuttle that amendment. In a letter to legislators, the ACLU charged that the amendment ultimately "risks allowing gene patent holders to argue that Congress implicitly endorses the validity of such patents."
As a result of these efforts, Schultz introduced a provision in the patent reform bill that requires the USPTO director to "conduct a study on effective ways to provide independent, confirming genetic diagnostic test activity where gene patents and exclusive licensing for primary genetic diagnostic tests exist."
At the USPTO hearing, she recounted her experience being diagnosed with breast cancer and getting tested with Myriad Genetics' BRACAnalysis test. Based on the results of this test, Schultz had seven surgeries, including a double mastectomy and an oophorectomy. "There was nothing I could do to question these results or get an independent test," she said.
"There is only one test on the market for the BRCA mutations," said Schultz, noting that this situation is maintained Myriad's patents and exclusive licenses around these markers. "So, there is no way for someone who is questioning her risk for genetic breast or ovarian cancer to get a second opinion … This is intensified by the fact that for many women the test results are inconclusive."
She noted that for approximately 20 percent of available genetic tests, only one laboratory can perform the test due to patent exclusivity around the gene being tested.
At this week's hearing, discussion of the issue of second-opinion genetic testing was unavoidably wrapped up in arguments around whether isolated genes should be patented in the first place, which is the key question at issue in Association for Molecular Pathology et al. v. US Patent and Trademark Office et al. In this case, healthcare providers, patients, and researchers represented by the Public Patent Foundation and the ACLU are challenging patents held by the University of Utah and exclusively licensed to Myriad on BRCA 1 and BRCA 2 genes.
The Court of Appeals for the Federal Circuit in August ruled that isolated gene sequences in Myriad's patents are not products of nature and are therefore patentable — a decision that overturned an earlier ruling by a New York federal district court. The appeals court determined, however, that several of Myriad's method claims that describe "comparing" and "analyzing" gene sequences were invalid (PGx Reporter 8/3/2011). The ACLU has asked the Supreme Court to hear the case, and the judges are supposed to meet on Feb. 17 to decide whether they will.
What's the Problem?
A day before the Supreme Court is slated to make this decision, several presenters at the USPTO's public hearing asserted that there is no evidence suggesting that gene patents restrict access to tests. Many characterized Myriad's aggressive enforcement of its exclusive licenses to block confirmatory diagnostic testing from other labs as an isolated example in the diagnostics industry. As such, the USPTO, in its report to Congress, should not advocate changes to the patent system that would allow a broad safe harbor for confirmatory gene testing, speakers asserted.
"The US government should employ the laws already on the books … to provide independent confirmatory genetic testing when it is needed on a case-by-case basis," Thomas Kowalski, an intellectual property lawyer at the firm Vedder Price, said during the meeting. "There is no need for Congress to consider altering the patent system as to genetic testing … [The] need for independent second-opinion genetic diagnostic testing is a healthcare issue and a health reform issue, not a patent law issue."
Kowalski suggested that if Myriad's exercise of its exclusive licenses is barring access to confirmatory BRCA testing for breast and ovarian cancer patients, then the government should "step up" and exercise its "march-in rights" under the Bayh-Dole Act, which allows federally funded research to be patented by universities, small businesses, and non-profits. Under this provision of the law, the government can grant additional licenses to other applicants for a patented invention if the patent holder or exclusive licensee fails to address the "health and safety needs" of consumers.
He also recommended that the USPTO, the Federal Trade Commission, the Department of Health and Human Services, and the US Food and Drug Administration form a committee to study whether the US should enact antitrust legislation that mitigates situations when a patent holder behaves in an anticompetitive manner that hinders other patented inventions.
Meanwhile, Hans Sauer, associate general counsel for intellectual property at the Biotechnology Industry Organization, questioned whether there is even a potential market for confirmatory testing. He noted that BIO has gathered physician anecdotes that suggest that patients generally want a second opinion on what course of treatment to pursue, but "it's quite rare for a patient to ask for a repeat of an advanced molecular diagnostic test.
"Absent a reason to believe that the original test provider will again provide an unreliable test result, there is no reason to request a repeat test from an independent third-party laboratory," Sauer said. "So, we're told, and unfortunately it's kind of hearsay, that such instances are actually quite rare." Sauer recommended that the USPTO find out how often patients request confirmatory testing in cases where there are no exclusive licenses and patents that would bar an independent lab from providing a second opinion.
Of course, the plaintiffs in AMP v USPTO would vigorously deny Sauer's suggestion that there is no demand for second-opinion testing, since in that case researchers are challenging Myriad's patents precisely because they were restricted from performing confirmatory BRCA testing on patients at their labs. Furthermore, at least one plaintiff, Genae Girard, sought a second opinion on her BRCA test result but was unable to get one because Myriad is the sole provider of such testing.
Upon the request of several USPTO officials, Mary Williams, AMP executive director, agreed to provide data on whether the level of physician care to patients is diminished by the lack of access to secondary testing, the degree to which diagnostic developers are not filing patents on isolated genes and diagnostic methods in the current environment, and the types of insurance policies that impact patient access to tests.
Reimbursement Questions
Speakers generally agreed that reimbursement for molecular diagnostics is one of the main barriers to patient access to genetic testing, but they disagreed on how patents and exclusive licensing practices might aggravate existing reimbursement issues.
AMP's Williams pointed out that when patents and exclusive licenses accommodate a single test provider, patients whose insurers don't have a relationship with the provider are out of luck. For example, one of the plaintiffs in AMP v. USPTO, Lisbeth Ceriani, could not get BRCA testing because her state Medicaid insurer didn't have a contract with Myriad, and she couldn't get the test from another lab because of Myriad's exclusive licenses around such testing.
"Coverage of genetic tests appears to be quite good for the majority of patients who have private health insurance. Where private payor coverage is average, [genetic testing coverage] is adequate independent of patent status," Sauer said. "Actual access concerns have been raised mainly for patients who must rely on public payors. So, the problem seems confined to a certain class of patients and to a certain kind of payor."
A report issued by the HHS Secretary's Advisory Committee on Genetics, Health, and Society in 2009 found that gene association patents and exclusive licensing practices have harmed patient access to genetic testing in geographically isolated and poor populations (PGx Reporter 10/14/2009).
Several speakers pointed out that merely providing a safe harbor in the patent system for independent confirmatory testing won't necessarily improve patient access if reimbursement policies are not taken into account.
"The barriers to access for claiming confirmatory retests will always be higher than for the first test, because payors are unlikely to pay for confirmatory testing irrespective of how many providers are available," Sauer said. "If [retesting] is brought up as a big entitlement concept it could lead patients to incur significant, unnecessary out-of-pocket costs," since payors are unlikely to cover such testing.
Other Culprits, Potential Solutions
At the public hearing, the 2009 SACGHS report was cited by numerous presenters who highlighted the portions of the committee's findings that bolstered their stance on confirmatory testing.
Some pro-gene-patent presenters noted that SACGHS did not find that gene patents broadly impacted patient access to confirmatory testing and maintained that there wasn't evidence suggesting that tests developed with exclusive licenses cost more than those that are developed with non-exclusive licenses.
According to Sauer and other speakers, the patent system is "not the culprit" hindering patient access to genetic testing. Absent changes to the reimbursement and regulatory system for molecular diagnostics, patents and exclusive licenses are the only incentive for test developers to invest in developing innovative tests, he said.
The current dual regulatory pathway for molecular diagnostics enables labs to launch tests based on non-exclusive licenses without gaining approval from the FDA — a disincentive for such developers to seek regulatory approval for their tests. Additionally, molecular diagnostics developers have often complained that insurer payment levels based on outdated stacked reimbursement codes don't recognize the value that these tests add to the care of patients.
For example, Qiagen doesn't have an exclusive license covering diagnostic testing of KRAS mutations. However, as the developer of a companion diagnostic that gauges mutations in the KRAS gene, Qiagen is in the process of securing FDA approval for its test, and cannot launch it before the agency's go-ahead. In the meantime, a number of labs offer LDTs that assess the same markers and these labs are capturing the KRAS testing market without any investment in regulatory approval through FDA.
On the one hand, gene patenting supporters have cited Qiagen's experience with KRAS testing to point out the importance of exclusive licensing in getting a return on investment in the molecular diagnostics field. On the other hand, others have used the same example to point out that absent exclusive licenses, genetic testing and research around KRAS mutations is still occurring.
"When people say you can't have diagnostics without exclusive rights, there are lots of counter examples to that," Robert Cook-Deegan, director of Duke University's Center for Genome Ethics, Law & Policy, told PGx Reporter. While drug companies may want some sort of patent incentive to work with diagnostics developers to advance personalized medicines, "exclusive licenses aren't going to solve the problem for [them]."
Cook-Deegan and others at the Center for Genome Ethics, Law & Policy helped gather public comments that provided the basis for SACGHS' recommendations on gene patenting and licensing practices. Cook-Deegan and his team didn't find consistent reports in case studies or public comments that suggested that patents were necessary to stimulate innovation in commercial genetic testing.
"The problem with exclusive licensing is you have to pick the winner, and the company that has the rights also has to be capable of getting something onto the market," he said. "And that may not always line up."
However, without patents, companies may resort to depending more on trade secrets, a strategy that Myriad has been moving toward. After the federal circuit court invalidated several method patents related to BRACAnalysis, Myriad attempted to assuage Wall Street analysts' concerns by highlighting that the company has numerous patents protecting BRACAnalysis, as well as a proprietary database of BRCA gene association data, the majority of which is likely protected only as a trade secret.
Moreover, as molecular diagnostics move away from single-gene testing and become more complex, policies that force companies to protect their products without patents may also lead to negative outcomes for consumers.
"Even I can think of ways you can protect future diagnostics, especially in complex diseases, without patents," Kevin Noonan, a partner at McDonnell Boehnen Hulbert & Berghoff and one of the writers for the Patent Docs blog, said at the hearing. "Identify the genetic variants that are involved in a half dozen or dozen genes, and you put those genes on a chip with 10,000 other genes. You encrypt every chip, so the position of the diagnostic informative sequences are in a complicated encryption algorithm. Then you truly can't de-identify without a key, and then you provide the test to the public.
"No patents, no problems, and no disclosure. You ended any chance that I'm ever, as the provider, going to have to charge less than anything I want … unless there is the chance that someone else will come up with the test that I did," he said.
With greater development of multiplex testing and increasing application of whole-genome sequencing technologies, test developers no doubt will need to find a solution around exclusive licenses and patent thickets. In this regard, intellectual rights management firm MPEG LA launched a gene patenting "licensing supermarket" two years ago (PGx Reporter 4/28/2010).
At the meeting, Kristin Neuman of MPEG LA announced that the company will soon launch Liberassay, which she described as a "web-based catalogue or store, much like Amazon or iTunes, for patent rights that are available for licensing on a non-exclusive basis" to users on "reasonable, transparent, and non-discriminatory terms."
Liberassay licensees, according to Neuman, can shop for the patent rights they need to develop a genetic test, bundle the patents into customized packages, and license them non-exclusively. MPEG LA plans to launch Liberassay in the second quarter of this year. The company is currently finalizing agreements with research institutes and universities to include their patents upon the launch of the webstore, which is undergoing beta testing.
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