High court gene patent ruling doesn’t end legal battles

Myriad Genetics and others claim that two companies that have introduced their own cancer screening products are infringing on patents that remain in force.

By — Posted July 29, 2013

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A landmark U.S. Supreme Court ruling in June stating that human genes cannot be patented prompted two companies immediately to introduce new cancer screening tests to compete with one that had been at issue in the case. But the original patent holders are suing the companies, a development some observers fear will continue to delay similar introductions of more affordable genetic screening options for patients.

The patent owners, led by biomedical testing company Myriad Genetics, are alleging in court documents that Ambry Genetics and Gene by Gene Ltd. are infringing 10 of their patents related to testing of the BRCA1 and BRCA2 genes, mutations of which have been linked to certain types of cancers. The plaintiffs say the patents, which cover synthetic primers, probes and arrays as well as methods of testing the genes, remain in force after the high court ruling. They are seeking to block the companies from selling any products that infringe upon the intellectual property covered by the patents as well as treble damages from any lost profits that may result from the companies’ actions.

Complaints against the companies offering the new tests were filed in early July with the U.S. District Court for the District of Utah, Central Division.

Myriad, based in Salt Lake City, is the developer of the BRACAnalysis test, which has dominated the market for BRCA screening. At least 1 million women have received this test to gauge their hereditary risk for developing diseases such as breast or ovarian cancer. Myriad had been claiming exclusivity over its screening through its patent protections, but a lawsuit brought against the company in 2009 by the Assn. for Molecular Pathology and others challenged its sole rights to the genes themselves. The case eventually made its way to the U.S. Supreme Court. In June, the high court ruled that Myriad did not hold a valid right to patents on the naturally occurring BRCA1 and BRCA2 genes, despite the company’s discovery of their precise locations on the corresponding human chromosomes and its isolation of the genetic sequences.

To the American Medical Association and others that applauded the ruling, removing patents on human genes presented new opportunities to innovate on BRCA testing methods and other screening tools involving human genes. The decision immediately opened up the market to allow other genetic testing labs to offer their products at lower cost, said Rebecca Nagy, a certified genetic counselor and president of the National Society of Genetic Counselors.

In a statement, Ambry Genetics said it would vigorously defend itself against the infringement suit in light of the Supreme Court ruling. “We have had an overwhelming response from our clients seeking an alternative laboratory to perform BRCA testing, and Ambry is fully committed to supporting our clients and patients moving forward,” said Charles Dunlop, Ambry’s CEO. The company had begun offering BRCA1 and BRCA2 diagnostic testing just after the ruling came down.

But according to Myriad spokesman Ron Rogers, the focus of the latest patent infringement lawsuits against Ambry and Gene by Gene is unrelated to the question that was at issue in the Supreme Court case. “We consider these to be ordinary, classic patent cases. They’re infringing our patents covering the use of primers, probes and arrays as well as methods of testing,” he said.

The BRCA patent owners, which include Myriad, the University of Pennsylvania, the University of Utah, the Hospital for Sick Children and Endorecherche, continue to assert more than 500 enforceable patent claims on 24 patents related to BRCA screening. “In return for licenses to the patents, Myriad pays the BRCA patent owners about 8% of its annual profits in the form of royalties,” Rogers said.

Of the nine claims the Supreme Court case considered, only five involving naturally occurring DNA were invalidated, Rogers said. The high court also affirmed the patent eligibility of complementary DNA, synthetic genetic sequences created in the laboratory, as well as new methods or applications of gene discoveries. “Those are the claims that are really at issue in what we consider to be classic patent cases that we recently filed,” he said.

Suits may delay testing decisions

If it prevails in its lawsuits against Ambry and Gene by Gene, Myriad could slow down other companies looking to offer their own BRCA1 and BRCA2 tests, said Haig Kazazian, MD. He’s a professor at the Johns Hopkins University School of Medicine in the Institute of Genetic Medicine and was one of the original plaintiffs in the lawsuit against Myriad over natural gene patents.

“I don’t know if any of the other big companies are planning to offer the testing, like Quest Diagnostics or LabCorp, but certainly if Myriad is successful, those other companies will probably wait. They’ll delay setting up the testing for BRCA1 and BRCA2. And the same may well be true for academic labs,” Dr. Kazazian said. Physicians in the meantime may be compelled to continue to order Myriad tests for patients if the court grants a preliminary injunction against the companies offering the new screenings, he said.

The lawsuits may make sense for Myriad in terms of continuing its testing monopoly and benefiting its shareholders, but “to us and the physician and scientific community, they really don’t make much sense” after the Supreme Court ruling, Dr. Kazazian said. “We had thought that with this decision, women would now be able to get second opinions on their tests and get their tests done at labs other than Myriad and wouldn’t have to pay as much money.”

Myriad contends that it does support the advancement of scientific research and the rights of patients to get second opinions on test results. The company said it would “continue its practice of not interfering with laboratories conducting genetic testing on patients for the purpose of confirming a test result provided by Myriad … [and] not impede noncommercial, academic research that uses patented technology licensed or owned by us.”

Costs could be slow to fall

Before the high court’s ruling, one of the complaints had been that Myriad’s monopoly over the BRCA1 and BRCA2 tests had driven up their costs into the $3,000 to $4,000 range. Labs that opened up testing following the decision were offering tests at much lower prices, said Nagy, with the National Society of Genetic Counselors. Costs were about $2,000 for most of them, but some prices went as low as about $1,000. “From a patient, genetic counselor and physician perspective, that’s a good thing, because it means that more patients could possibly access the test,” she said.

On the day of the Supreme Court’s ruling, DNATraits, a division of Gene by Gene, had announced that it would be offering screenings for the BRCA1 and BRCA2 genes for $995. “It’s critical that as an industry we are able to continue to engage in healthy competition to drive down the costs of these tests,” Bennett Greenspan, Gene by Gene’s president, said on June 13. The company, based in Houston, declined to comment on the patent infringement lawsuits.

Although it’s true that most insurance companies cover these tests for covered individuals who need them, for patients enrolled in plans that don’t cover them, or who face an out-of-pocket cost of 10% to 20%, the difference between a $1,000 test and a $4,000 test is significant, Nagy said. “Myriad does a fantastic job with its test and customer service, so as far as quality goes, that’s never been a concern. It’s more about cost for most of our patients,” she said.

The Supreme Court’s ruling also had an impact on panel testing, Nagy said. Beforehand, if patients wanted to get a full breast cancer profile, they first would have to obtain the BRCA tests. If the results were normal, they would have the option of receiving an additional screening in which 20 to 25 different genes are tested at the same time.

“That’s $6,000 worth of testing,” Nagy said. “Because of the Supreme Court ruling, they can just get the $2,000 panel test and get the complete picture, because those panel tests now include BRCA1 and BRCA2.” Reverting to the way the screenings were done before the ruling will make the process slower for patients and be more costly, she said.

Rogers noted that Myriad has invested more than $500 million to ensure the broad availability of genetic testing. “As of today, BRCA testing is widely covered by public and private insurance for the vast majority of at-risk patients, and their average out-of-pocket cost is less than $100.” The company also offers free testing or financial assistance programs for uninsured and underinsured patients, he said.

On July 15, Myriad announced it would offer assistance to reduce out-of-pocket costs to underinsured patients that met certain qualifications. “A lack of financial resources should not be an impediment to quality health care,” said Peter D. Meldrum, Myriad’s president and CEO, in a statement.

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