Patenting and Licensing Monopolies Create Problems in U.S. Clinical Genetic Testing

Lab PhotoDURHAM, N.C.-- Patenting of genes has not resulted in a pattern of exorbitant pricing or restricted access to tests for diseases such as Alzheimer’s and breast cancer, Duke University researchers report in Wednesday's Nature magazine.

However, patents and exclusive licenses that establish genetic testing monopolies are creating significant problems for patients and physicians, say authors Robert Cook-Deegan, Subhashini Chandrasekharan and Misha Angrist.

The Nature commentary, “The dangers of diagnostic monopolies,” is based on eight case studies conducted by Duke health policy students over the last two years. The studies were conducted for the Secretary’s Advisory Committee on Genetics, Health and Society (SACGHS), U.S. Dept of Health and Human Services, which is assessing whether patenting restricts patient access to genetic tests. 

“Although our findings detect no pervasive effects that consistently help or hinder clinical access to genetic testing, there is much room for improvement in patenting and licensing, through action by university technology licensing offices, federal oversight and self-policing by commercial patent licensees,” Cook-Deegan said.

Cook-Deegan, of Duke’s Institute for Genome Sciences & Policy, and a professor of public policy and medicine, said the most surprising finding was that prices of patented, exclusively licensed tests are not dramatically or consistently higher than prices for tests lacking a monopoly. For example, unit prices for breast cancer testing – provided solely by Myriad in the United States – are comparable to similar tests for genetic susceptibility to colon cancer, which are available from many laboratories under nonexclusive licenses.

This is contrary to the pattern seen in drug pricing, where exclusive patent rights are linked to substantially higher prices. The study did not address why the pattern differs, but there are theories, Cook-Deegan said.

“Diagnostic tests are reimbursed by formulas that compare new tests to similar existing tests, making large price jumps difficult to justify. Moreover, diagnostics have not been a big profit center historically; companies aren’t used to making massive profits from diagnostics. There also has been a lot of public controversy focused on access to these tests,”

Other common assumptions examined in the case studies are that allowing gene patents will speed up development of tests, and that test quality might suffer without competition. Neither was consistently true, which suggests that patenting was not the primary influence on either innovation or quality. However, the authors noted that monopolies do exacerbate concerns about test quality.

The federal government “has not exercised its considerable clout” in this arena, Cook-Deegan said. It has not used Medicare’s and Medicaid’s market power to decide coverage and set reimbursement rates for tests, which would ensure that all patients who need a genetic test get one. Nor has the government ever taken control of a patent in a case where a patent-holder’s actions have eliminated tests from the market or led to poor quality testing, as is possible under the 1980 Bayh-Dole Act, he said.

Universities are particularly important players. Because their research finds genes associated with disease, they own a highly disproportionate share of gene patents for genetic tests. Universities owned 75 percent of the patents examined in the case studies, compared to less than 3 percent of all U.S. patents, Cook-Deegan said. Paradoxically, universities also own most of the laboratories against which such patents are enforced, and several university laboratories have been driven out of particular genetic testing markets due to patent enforcement actions.

The Duke Center for Genome Science, Law and Policy will host an April 4 workshop on university patenting and licensing of DNA diagnostics, to be attended by federal officials, university licensing managers and scholars from the U.S., Europe, Canada, and Australia.

The draft report to the secretary of HHS from the task force is available for public comment through May 15. It includes the Duke case studies and is available online at http://oba.od.nih.gov/SACGHS/sacghs_public_comments.html.