IN A LANDSCAPED lot on the outskirts of Salt Lake City, Utah, stands a modern building of glass and brick, typical of countless other offices built in the 1990s. What goes on inside, however, is anything but commonplace. The building is home to Myriad Genetics, a pioneer in genetic testing, and best known for developing the DNA test based on the BRCA1 and BRCA2 genes to assess a woman’s risk of breast and ovarian cancer.
You’d think this company would be riding a wave of popularity, that its image would thrive on the gratitude of doctors and the thousands of women worldwide whose lives have been saved by the test. But you couldn’t be more wrong. For many scientists, Myriad has become one of the most despised biotechnology companies in the world. It’s being boycotted by Canadian health authorities and laboratories in the Netherlands, Belgium and Germany, challenged by the French government in a heated patent dispute, and has provoked deep animosity in Britain as the company negotiates with the National Health Service over testing policy.
Myriad’s patents give it broad rights over pretty much any diagnostic or therapeutic use of BRCA1 and BRCA2 and the proteins they code for. What’s upsetting people is that Myriad is trying to stop anyone else carrying out comprehensive tests for breast and ovarian cancer. Myriad’s critics argue that by setting up a monopoly on testing, the company is attempting to profit at patients’ expense.
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It’s the quintessential David and Goliath story. Here’s a big biotechnology company with its two key genes, going round the world telling small diagnostic labs they can’t test people any more because the genes are private property. Critics contend that the monopoly Myriad is creating lets it set an unreasonable price for its tests. And academics are furious that companies hoarding the rights to genes may stifle valuable research by raising the price of genetic testing and restricting access to tests.
But the detractors had better brace themselves for more. Other companies are following in Myriad’s footsteps, including Athena Diagnostics, a Massachusetts subsidiary of Ireland’s Elan Pharmaceuticals. Athena has bought exclusive patent rights to several diagnostic tests for neurological diseases, such as late onset Alzheimer’s disease. The tests used to be routinely performed by some university labs, says bioethicist Jon Merz from the University of Pennsylvania in Philadelphia, who has looked closely at Athena’s practices. He and others told 91av that the company has asked many labs to stop offering some of those tests, because they want to be the exclusive provider.
Disturbing implications
Athena declined to comment on its strategy, but 91av has obtained a letter sent by Athena to a university laboratory in which the company states: “It is only by using Athena’s facilities that other laboratories can offer this patented diagnostic test without infringing the patent.” Because of letters like that, “a lot of small good laboratories are backing off from companies like Athena”, says the director of one of the biggest university laboratories in the US, who preferred not to be named. “They just bully around small labs.”
But perhaps the most disturbing implication of all is that Myriad and Athena’s modus operandi could be repeated by the pharmaceuticals companies a few years from now. Drugs companies are applying for patents on genes and their functions with unprecedented speed. And some of these patents are so far-reaching that, if granted, they could prevent anyone else from touching those genes to create drugs that act on them or even to test the genes for mutations in a patient.
There are now numerous patent applications for key cell receptors that claim their associated genetic sequences and mechanisms of action. Being able to use these receptors could be vital for discovering whole classes of drugs, says Gordon Wright, a partner at patent law firm Elkington and Fife in Sevenoaks, Kent. “If it’s inevitable that others must pass through that gateway to find a drug, it may be that [the patent owners] are in a position to control access,” Wright says. “If they get too greedy on this, it’s a danger.” In the future, instead of several companies competing to create blockbuster drugs that act in a specific way–think of the statins that reduce cholesterol and stave off heart disease, or the new class of anti-inflammatories for arthritis called COX-2 inhibitors– a single drugs company could monopolise the information needed to create the next miracle cure. It would be goodbye to competition and hello to monopoly pricing and a slower pace of medical progress.
The herald of this bleak scenario is Myriad. The company has been granted more than 25 patents in the US, Europe and elsewhere, giving it rights over the sequence, diagnostic and therapeutic uses of BRCA1 and BRCA2. Soon after being granted the US patents in the mid-1990s, Myriad successfully halted most testing being done by labs in the US. These labs were offering different kinds of tests: some scanned the genes for mutations, others were simply testing for faulty versions of the gene’s protein. All these labs were infringing the patents, so Myriad warned them to stop offering the tests.
The company allows other labs to carry out limited tests on the genes, for a fee. But for full sequencing, Myriad insists that all samples are sent to its headquarters in Salt Lake City, no matter if the patients are thousands of miles away around the globe.
Myriad’s takeover was fairly smooth in the US. There was little fuss– at least in public. But the company has not had such an easy ride outside the US. Labs in several European countries are refusing to recognise the company’s patents. For example, the Curie Institute in Paris with support from the French government has filed challenges to the BRCA1 patents with the European Patent Office (EPO), arguing that Myriad’s unwillingness to let anyone else do full testing would establish a monopoly, damaging scientific research and the welfare of patients.
Human genetics societies in Germany, the Netherlands, Belgium and Denmark have also field a challenge with the EPO, says Dominique Stoppa-Lyonnet, head of oncological genetics at the Curie Institute. Laboratories in those countries have decided not to honour Myriad’s patents, arguing that they have tests that are just as effective and several times cheaper. “We are still doing our own genetic testing, but we are aware that Myriad could put pressure for infringement of the patents,” says Stoppa-Lyonnet.
In part, this hostility has arisen because diagnostic labs at universities and hospitals had been used to operating in a very unrestricted manner. For years, whenever a gene for a disease was published in a scientific journal, researchers running university laboratories felt free to devise their own diagnostic test for it. Since many of the first gene discoveries that led to diagnostic tests were not patented, labs could offer their home-made test without fear of infringing anyone’s intellectual property rights.
Then, in the 1980s, the US passed the Bayh-Dole Act to encourage universities to patent their research results. Labs increasingly found that their in-house tests were for genes or proteins that had been patented by someone else, meaning they had to pay royalty fees. For example, whenever a lab carries out a genetic test for cystic fibrosis, it has to pay about $2 to the University of Michigan. But while the days of pay-per-use diagnostics had begun, at least labs could still perform the tests themselves. Then along came Myriad, intent on using its patents not just to charge other labs royalty fees, but to stop them doing the tests at all.
Labs may have their own reasons for disliking Myriad’s strategy, but there are wider fears about how the company’s policy will affect healthcare and medical research. First, there’s the cost of the BRCA1 and BRCA2 test, which in the US is approximately $2700 a throw. In some countries, the cost is between double and triple the rate that labs used to charge.
“The cost is prohibitive, so the local population is not opting to do it,” says Doug Horsman, director of the Hereditary Cancer Program in British Columbia, where in-house testing for the two breast cancer genes was stopped in July 2001 after the lab received a cease-and-desist letter from Myriad. In British Columbia, the number of families wanting the test has gone from roughly 100 families per year to about six, Horsman says. “It’s a direct reflection of the price. If they’d come in with a reasonable price, they might have gotten hundreds of patients from us,” he says.
William Hockett, director of communications at Myriad, says that the pricing issue “is never portrayed accurately”. He claims the only reason other lab tests were cheaper was because they weren’t as comprehensive or sophisticated, and would often miss mutations. That’s true in some cases, but not all. Stoppa-Lyonnet, for example, says studies have shown that the method used in France, which is not based on sequencing, is just as accurate as Myriad’s, yet it’s several times cheaper.
But fears go beyond the cost of tests. There’s also concern that Myriad’s tactics will harm research. Generally speaking, it’s widely acknowledged that once someone patents a gene, researchers interested in finding diagnostic tests or therapies based on that gene will shy away from it for fear of infringing the patent. A survey published this year by Merz demonstrated that simply knowing there are patents on the gene for hereditary haemochromatosis– a disorder in which the body retains too much iron– played a major role in deterring up to 30 per cent of more than 100 diagnostic labs from developing a test for the disease.
Another widely voiced worry is that Myriad’s restrictions could harm clinical studies by controlling the lifeblood of scientific research: data. If Myriad is the only one that can do the tests, that puts it in charge of the quantity and quality of data produced. But Hockett says that contrary to what some critics say, Myriad does not keep a database of all test results. And if it finds new mutations when sequencing somebody’s DNA, they are sent straight to BIC, the public breast cancer information database.
No stifling of research
“We have sponsored long-term registries to follow women with mutations, such as that run by Dr Fred Li at Dana Farber Cancer Institute,” says Hockett. “We have provided no-cost testing and low-cost testing for dozens of research studies. Over 700 research papers have been published with these genes. Compare that to any other predisposition gene and you you can see that they are extremely well researched – no stifling has taken place.” Myriad has also cut a deal with the US National Cancer Institute to do tests funded by the institute at about half the regular price, which is close to what it would cost any lab to carry out the test.
Still, however, Merz says many scientists are unhappy about sending all samples to Myriad because they’d prefer to do the test themselves and have control over the methods and validity of the results. In fact, there is one well-publicised case of a researcher so upset with Myriad’s policy that he stopped cooperating with a breast cancer clinical trial rather than send his samples to the company. But whether this case, and similar examples, can be used as evidence that the company is unfairly “halting” research is not clear. One argument the company uses in reply to its critics is that in many clinical studies, academic institutions should not be immune from the rules applied to commercial users of its patents (see “Blurring the lines”).
There seems to be no concrete evidence that Myriad’s patents, or any other gene patents, have prevented scientists from studying fundamental questions about genes– such as learning about their molecular interactions inside cells. “It’s really hard to get evidence,” says Mildred Cho of Stanford University, who studies the effects of patenting on research. “There really isn’t a whole lot out there, nothing systematic.”
But even in the absence of hard evidence, the perceived stifling of research by patents and monopolies such as Myriad’s has created enough unease, and lawmakers have begun to act. In the US, for example, a bill to modify patent policy has just been introduced in Congress. According to Representative Lynn Rivers, a Democrat from Michigan who is sponsoring the bill, any scientist doing non-commercial research that involves patented genes should be exempt from a patent. “My greatest concern is that if research is foreclosed, the science stops cold,” she says. Rivers proposes that if a researcher makes a commercially valuable finding, they should then be able to enter into negotiations with the patent holder to pay royalty fees. Likewise, medical researchers would be free to create their own tests for a patented gene without having to pay royalties on that gene. “I’m trying to avoid the possibility of a patent on a gene foreclosing any use of the gene,” she says.
Any attempts to change patent laws are always met with the same objections by industry: the whole purpose of a patent is to protect the inventor’s right to exploit a discovery commercially, and without it a company could not justify investing in research in the first place. And limiting a company’s rights to stop anyone else profiting from their invention would ultimately choke innovation. These arguments are not unique to healthcare, however. According to Geoffrey Duyk, an ex-Harvard academic who co-founded Millennium Pharmaceuticals and is now Chief Scientific Officer at genomics firm Exelixis, the story of Myriad is the story of agribusiness versus the family farm, and amazon.com versus the corner bookstore. So the question becomes, should the rules for companies in healthcare be any different from those in other markets?
If the balance between monopolies and licensing is one part of the problem, another issue is lurking beneath the surface: the breadth of patents. Some critics argue that Myriad’s BRCA1 and BRCA2 patents should never have been granted in the first place because their scope is too broad. But in fact, that may be a misconception. Myriad’s patents are, in fact, no more comprehensive in their claims than thousands of others filed by companies and countless academic labs.
The issue of how broad patents should be is almost unmanageably complex, and a topic of worldwide debate. There are those who feel that no genes should be patented, because they already exist in nature. But according to R. Stephen Crespi, a prominent patent attorney and consultant to the London-based law firm Williams, Powell and Associates, that objection has not been used much in the courts. “Even if it were well-founded, the objection is not so much a legal question as a philosophical one and therefore it cannot be fitted easily into the grounds available for invalidating patents,” Crespi states in a recent essay.
A more reasonable question is how far-reaching a patent should be relative to how much new knowledge has been uncovered. In January 2001, the US Patent and Trademark Office (USPTO) raised the bar for those trying to patent genes, stating that applicants must prove that they have a unique, non-obvious use for a claimed gene, such as a diagnostic tool for a specific disease. “You have to be able to show that you’ve characterised the gene and you would know what to use it for,” says Lila Feisee, former USPTO officer and now director of government relations and intellectual property at the Biotechnology Industry Organization in Washington DC.
The move was prompted in part by the patenting frenzy in the 1990s when companies, including Incyte Pharmaceuticals and Human Genome Sciences, filed thousands of patent applications for genetic sequences, even though they frequently had no idea what the genes did. But even if these guidelines had been in force when Myriad applied for the BRCA1 and BRCA2 patents, they wouldn’t have helped anyone challenge the breadth of the claims, since nobody disputes that the company sequenced the genes and researched their role in breast and ovarian cancer.
That doesn’t mean that companies don’t try to get away with patent claims that go far beyond the knowledge uncovered by the research done on a gene. It’s common nowadays for companies to aim to patent not only a specific gene and its protein but also– based on the molecule’s function –to claim any inhibitors or activators, on any cell type and for any assay or therapeutic application. “People do try to claim everything,” says Duyk.
Industry insiders even have a name for these claims. They’re called “Viagra claims”. The term refers to Pfizer’s attempts to claim rights not only to the active compound in the anti-impotence drug, but to any other compound that blocked the PDE-5 receptor on which Viagra works its magic.
Most of the patents with extensive claims are still in the application process, Duyk says. He doubts that the majority will be granted. Even so, it’s not unheard of for patent offices to approve seemingly overreaching claims. A famous example is a set of patents granted between 1988 and 1999 to Harvard University and DuPont for the “OncoMouse”, a mouse genetically engineered to get cancer.
Lucrative royalty deals
Researcher Phillip Leder at Harvard Medical School showed that inserting a gene called c-Myc into mice caused them to develop tumours, and based on that knowledge the inventors were granted patent rights over research with any cancer-prone mice, not just ones created with Leder’s methods. Though not for a specific gene, they illustrate how much ground can be gained with a powerful set of patents. And controversy has recently ignited over the patents, with prominent researchers publicly criticising the claims as overly broad and arguing that they are stifling cancer research.
It’s hard to see that a combination of broad patents and an unwillingness to license other researchers is in the public interest. Indeed, the impact could be worse if the trend took off in the pharmaceuticals industry. Traditionally, drugs companies have used patents as a way of getting lucrative royalty deals with one another, but that could change. To be fair, there’s no sign yet that drugs following Myriad’s lead.
That could be because the bulk of molecules described in the latest generation of patent applications are compounds that are still under development. But there is another reason why the kind of market domination that’s emerging in diagnostics may never appear in pharmaceuticals, even if the patents are there. In pharma, there are too many companies with deep pockets willing to fight overzealous patents in court.
Ironically, Viagra is a good example. The EPO recently rejected Pfizer’s claim to any molecules interacting with the PDE-5 receptor. Britain’s patent office also threw out the claim. Thirteen companies, including the drugs makers Eli Lilly and ICOS, successfully argued that Pfizer’s idea of using the PDE-5 receptor to correct erectile dysfunction was obvious to everyone before the company applied for its patent.
The challenging companies put a good gloss on their success. “Patients benefit when they have more than one choice,” says Lacy Fitzpatrick of ICOS. Yet they were clearly out to deny Pfizer control over the whole market for PDE-5 inhibitors: ICOS and Lilly are about to launch a very similar drug to Viagra.
So, a greedy pharmaceuticals company may have a much harder time at establishing a monopoly than Myriad has had in its attempt to dominate the breast cancer testing market. And already some experts are saying that not even Myriad’s monopoly will prevail, because market forces have begun to dictate that the monopoly route may not be the most efficient. “If Myriad were making lots of money that’s one thing, but they aren’t,” says Iain Cockburn, an economist and patent expert at Boston University.
But arguments that monopolies will not thrive seem to forget the huge prize on offer to a company that controls the diagnosis and treatment of a common disease. With a new generation of patents making that prize more easily attainable, the rewards for pharmaceuticals companies may be too tempting– and all the more disastrous for society. It would raise the spectre of, say, a company not just “owning” one drug for treating Alzheimer’s disease but also governing any progress in that field for the 20-year lifetime of its patent. What would governments do then?
In demonising the Myriads of the world, critics may be losing sight of the fact that the line between academic and commercial research is getting more blurred by the minute. When condemning the chilling effect of patenting on research, the examples often cited are those of researchers at diagnostic laboratories, many of whom have shied away from developing new tests for fear of infringing on patents that are held by others.
This much seems to be true. But it’s not all as clear cut. For example, because of their affiliation, it’s very easy to classify university laboratories as research venues, even though the truth is that they are really just providing a lab service. They are receiving money for the tests they develop and perform—be it from the patient, their insurance company or a federal grant in case the lab is helping scientists with a research project.
For example, in an epidemiological study of breast cancer, the principal investigator would normally send samples from hundreds or thousands of patients to the university laboratory. Using money from a federal grant, the laboratory would be paid a set amount of money per sample it analyses. Myriad argues that this exchange of money is essentially a commercial transaction, so why should the university lab get that money and not Myriad.
The distinction between what is commercial and what isn’t is further blurred by a trend seen in recent years of industry and academia growing together. Researchers at universities are doing so much work in collaboration with industry these days— such as sharing reagents, analysing compounds and so on—that it’s becoming harder to argue that some of those studies have no commercial applications. In such cases, the work should not be exempt from the licensing duties paid by commercial companies. “Drug companies sometimes use academic researchers to do work, and that’s a way to avoid licensing,” says DuPont spokesman Richard Straitman.