The courts and Patent Office are killing medical innovation

The U.S. is in danger of losing its leadership in medical innovation because of recent Supreme Court decisions that undermine investments in medical research and development. That’s not just bad news for the economy. It’s bad news for everyone who relies on innovative medical treatments when they need them most.

These decisions, Mayo v. Prometheus (2012) and Association for Molecular Pathology v. Myriad Genetics (2013), drastically narrowed the availability of patents on genetic testing and personalized medicine for treatment of illnesses. 

{mosads}The Court sent a troubling message by wiping out hundreds of millions of dollars in investment in the development and implementation of life-saving technologies. Scientists and companies made these investments based on the security of property rights in innovative discoveries – patents – which prevent competitors from stealing the fruits of their labors. For decades, the patent system protected these investments, and as a result we all benefited from a revolution in biotechnology and related medical fields.

Even more troubling, courts and the US Patent Office are now taking these decisions further, denying patent protection to an even wider range of biotechnologies than those that were before the Court.  Unless Congress steps in to correct the situation, the ultimate loser will be all of us who will be denied the benefits of biotechnological innovation that is not invented or distributed in the healthcare market.   

These consequences reflect that the Mayo and Myriad decisions were based on a misunderstanding of how patents function in bringing new innovation to the medical market. Despite acknowledging the value of patented innovation, the Court incorrectly assumed that these patents stifle research and block patient access to diagnostic testing, when in fact the reality is quite different.

Patent owners generally do not enforce their patents in a manner that inhibits basic research – they are in the business of selling products to patients, not competing with academics.  The patent owner in Myriad was no exception. Contrary to popular myth, Myriad Genetics did not threaten patent infringement lawsuits against purely academic researchers; it only asserted its patents against academic institutions engaged in commercial genetic testing – clinical laboratories that were charging patients for testing services and thus directly competing with Myriad.

As a practical matter, patents pose no threat to basic research. In fact, academic research on the (BRCA) breast-cancer genes has flourished in the years since the PTO granted the Myriad patents, resulting in thousands of published articles.

Far from impeding basic research, patents serve a critical role in making such research socially useful. Basic research does not benefit patients until businesses translate it into high-quality, commercially available products – risky investments they are willing to make only if they have commercial security in this innovation in the form of a patent.

As the President’s Council of Advisors on Science and Technology recently found, the “ability to obtain strong intellectual property protection through patents has been, and will continue to be, essential for pharmaceutical and biotechnology companies to make the large, high-risk R&D investments required to develop novel medical products, including genomics-based molecular diagnostics.”

The commercial markets secured by patents are also essential to facilitating patient access to new medicine. The contrast between tests protected by patents and those that are not is telling. In 2010, genetic testing for the BRCA breast-cancer gene in the U.S. was covered for roughly 95 percent of those requesting tests, and reimbursed to cover 90 percent of charges.  Thanks in large part to greater public awareness and reimbursement rates due to Myriad Genetics own investments in educating the public and doctors, as well as working with third-payer providers, the number of individuals who have received BRCA testing in the US greatly exceeds the number who have received unpatented tests for comparable genetic conditions such as Lynch syndrome.

Unfortunately, the fallout from Myriad and Mayo is already being felt throughout the pharmaceutical and biotech industry. Something needs to be done, for the sake of both patients and the economy.

The damage might at least be partially contained if the Patent Office and lower courts were to apply Myriad and Mayo narrowly, thereby maintaining some degree of patent protection for diagnostics and other important biotechnological innovations. Unfortunately, however, to date the Patent Office and lower courts have been interpreting the decisions in a manner that only compounds the problem, and the Supreme Court is unlikely to correct its mistake.  Thus, Congress will likely need to intervene to restore patent protection for biotechnological innovation. It’s too important to our economy and our health to let this stand.

Holman is senior scholar for the Center for the Protection of Intellectual Property at George Mason University School of Law and professor of Law at the University of Missouri-Kansas City School of Law.