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Myriad Genetics' actions justify a ban on gene patents?

July 7, 2011
The following information was provided by Myriad’s General Counsel during his presentation on the subject during a recent BIO IP conference:

  1. In order to develop and then ensure the widest possible distribution of the Myriad BRCA diagnostic test, Myriad needed to make the initial discovery, educate the medical community on the values of personalized medicine (the BRCA test), convince insurance companies to cover the test, and educate the patient community.  All of these activities took significant investment.  Investors will not make that investment without a patent.  Discovery of a gene mutation alone will not get patients access to a test.

  2. Myriad spent significant resources to negotiate insurance contracts to cover the test and, as a result, the major payers now cover the test.  Medicaid covers the test in 35-40 states.  Myriad now has a contract with Massachusetts to cover the test (one of the plaintiffs was not able to get the test because Massachusetts did not cover the test at that time).  Myriad attempted to provide free testing to women (including the plaintiffs in the case) but they were prohibited by law.  Since 2009, Myriad is going through NGOs to provide free testing.

  3. Myriad spent $500 million dollars in the first 10 years but did not fully recoup its investment and make its first dollar of profit until 2005.  It filed for the patent in 1994 and it was issued in 1997.

  4. Myriad may have attempted to enforce its patent at first, but spent the next 10 years not enforcing it while research on the genes continued, undercutting claims that clinical laboratories were afraid to conduct the test.

  5. The BRCA gene is the “most published gene.”  The patent not hindering research. 18,000 scientists have published 7,000 articles on the BRCA genes.

The following information comes from U.S. District Court Judge Sweet’s Opinion:

  1. To compete with Dr. Francis Collins’ team and their substantial grant from NIH, Dr. Skolnick and a local venture capital group formed Myriad and Myriad received $5 million in funding in 1992, $8 million in 1993, and $9 million in 1994.

  2. According to one analysis, the NIH contributed only 1/3 of the funding for the identification of BRCA1. That means that 2/3 of the funding for identification came from other sources like private investors.

  3. 90% of the tests Myriad performs are covered by insurance at more than 90% of the test cost.

  4. While BRCA testing previously conducted by Yale, the University of Pennsylvania, and OncorMed cost less than what Myriad charges, on a “cost per exon” basis, Myriad’s BRCA analysis test costs less than testing for other genes performed by the University of Pennsylvania and Emory University.

  5. Myriad cited a survey published in 2009 by BIO stating that the majority of companies (61%) generally in-licensed projects that are in the pre-clinical or Phase I stage of development, and thus still require substantial R&D investment and commercialization risk by the licensee.  A substantial majority (77%) of the respondents without approved products indicated that they expect to spend 5-15 years and more than $100 million developing a commercial product.  Myriad asserts that these expenditures dwarf any initial research funding by the federal government.

  6. Myriad notes that a significant amount of private investment led to its identification of the BRCA1 and BRCA 2 sequences, with the expectation of patent protection providing an incentive to fund the research into the determination of the gene sequences.

  7. Myriad has made over 20,000 submissions to the Breast Cancer Information Core (BIC) mutation database, making it the largest contributor to the database.  It has also published the largest clinical series of mutation risk in the BRCA1/2 genes based on its testing data. This stands in stark contrast to the majority of academic researchers operating laboratories (as opposed to CLIA-certified laboratories) who do not believe that they should share test results outside of the standard clinical setting.