By: Jon F. Merz, JD, PhD

Assistant Professor of Bioethics

Department of Molecular and Cellular Engineering, and

Center for Bioethics

University of Pennsylvania

Philadelphia, PA 19104

merz@mail.med.upenn.edu

Good morning. I am very pleased to have the opportunity to address the Committee.

I wish to direct my comments to the emerging pattern of exclusive licensing of so-called Disease Gene Patents. These patents generally claim a gene sequence, one or more mutations in which are found to be associated with disease or risk of disease. In addition to claims covering all uses of the chemical sequences, the patents also claim all methods of diagnosis of disease by identifying in a specific patient the disclosed genetic alleles, mutations, or polymorphisms.

In a recent survey published in Nature, Anna Schissel, Mildred Cho, and I found that 14 of a sample of 27 disease gene patents had been licensed as of the date of our survey, and all licenses were exclusive. Patents covering the diagnosis of various neurological diseases including Charcot-Marie-Tooth disease, Spinocerebellar Ataxia, and Apolipoprotein-E in Alzheimers Disease have all been exclusively licensed to Athena Diagnostics. The first patent on the breast and ovarian cancer gene --BRCA1 -- was exclusively licensed to Myriad Genetics. Not all such patents are exclusively licensed, of course. Most notably is the patent covering the most common allele of the cystic fibrosis gene, which is being broadly licensed by the University of Michigan to anyone who performs CF testing.

Nonetheless, the pattern of exclusive licensing raises various concerns. Primary among these is that some licensees are exercising their patent rights to prevent physicians -- in particular, molecular pathologists -- from performing genetic testing of their patients.

In a pilot survey of a convenience sample of 74 laboratory physicians, my colleagues Mildred Cho, Debra Leonard, and I found that 25% reported abandoning a clinical test that they had developed, and 48% reported that they had not developed a clinical test because of patents. Respondents also reported paying royalties for using patented technology ranging from 9% for Polymerase Chain Reaction (PCR) to 75% for the human chorionic gonadotropin (hCG) patent, which covers but a small part of the maternal serum triple test.

In a follow-up nationwide survey of 112 laboratories capable of performing testing for hemochromatosis, a common disease causing iron-overload in the body, my student Antigone Kriss, along with Debra Leonard, Mildred Cho, and I, examined knowledge of and performance of the patented test. This survey showed that a good number of laboratories had adopted the test immediately upon publication of the research paper disclosing the test, more than a year prior to the issuance of the patent. Subsequent to the grant of the patent and its exclusive license to Smithkline Beecham (SB), nearly all of our respondents stated they knew of the patents, while about half of the laboratories had received letters from SB. Nineteen percent of our respondents reported that they did not develop the genetic test for hemochromatosis and another 4% stated they had abandoned the test, at least in part because of the patents.

One important point that I would like to make is that most of these disease genes to date have been found at least in part with federal funding of the research. The exclusive licensing of patent claims which anyone skilled in the art can immediately practice is contrary to a long-standing policy that the public should not be made to pay twice for inventions. Exclusive licensing should be reserved for inventions that require substantial downstream investment and development efforts to bring a commercial product to market.

A second point is that there is no clear line to be drawn between clinical testing and research testing, because the state of the art of genetic tests is such that much more clinical study is necessary to validate and extend the early discovery of a disease gene. Thus, the restriction of physicians from performing clinical testing will directly reduce the knowledge about these genes, which may very directly harm patients whose care can be affected by incomplete science.

A third point is that the restriction of physicians in the United States from performing clinical testing gives a competitive advantage to physicians who are free to practice medicine in other countries. Two examples from 1999 exemplify this.

Relating back to the hemochromatosis test that we have found is not being offered by some laboratorians, several researchers in early 1999 discovered that the patented and published probes yielded a high rate of false positive tests because of a polymorphism in the non-coding portion of the HFE gene.

In another case, a clinician who performed over 2000 clinical tests for Apo-E4 for Alzheimer’s Disease affirmed the occurrence of 2 rare, 1 in 1000 mutations, which presented difficult clinical issues regarding how to perform tests and how to counsel patients about new mutations and about information of limited or questionable clinical utility.

In these cases, the clinical researchers were from Australia and Canada.

A fourth important point here is that almost without exception, disease gene patentees are physicians. The rush to patent genetic discoveries conflicts with the 150-plus year moral stance of the American Medical Association because it gives physicians the right to restrict and to profit directly from the practice of medicine by other physicians. This was, to my mind, the primary concern behind the Ganske-Frist amendment of the patent statute. That law, description of which I am sure is unnecessary here, frees physicians and institutions from infringement of "pure process" patents. But the law does not extend to biotechnology patents, and does not protect CLIA-approved laboratory services. From this, I’d like to make 3 final remarks:

First, releasing physicians from infringement is a radical policy that has led at least some institutions to simply stop filing patent applications on surgical and other medical procedures. If patents are a strong incentive to innovate, then there may be fewer such innovations, which should be a public health concern.

Second, molecular pathologists practice medicine too. They have nonetheless been carved out from the Ganske-Frist protections.

And, third, it may well be that the reward structure of patents could have been retained in medicine by statutorily requiring compulsory licensing of all medical technologies, and by limiting royalties to a reasonable amount. Gene patents are too basic to believe that the patents may be avoided or worked-around by new innovations. Because of this, these patents grant real monopolistic power in a market already fraught with inefficiencies.

Thank you.