Experts Debate MDx Industry Impact of AMP v. Myriad Three Years After Court's Decision

NEW YORK (GenomeWeb) – It's been more than three years since the US Supreme Court ruled that Myriad Genetics could no longer patent isolated DNA sequences. The ruling, a unanimous 9-0 vote by the court, came about because of a lawsuit sponsored by the American Civil Liberties Union and led by the Association for Molecular Pathology, and the decision carried with it a promise, for better or worse, of new entrants and competition within genetic testing.

Molecular diagnostic industry experts convened last week at the Association for Molecular Pathology meeting in Charlotte, North Carolina, to debate benefits and challenges obtained from the ruling and to discuss the issues that omics and molecular diagnostics workers are encountering in trying to accurately provide interpretation for gene variants, now that genetic testing has become more widespread.

In its decisions in both AMP v. Myriad and a prior patenting case, Mayo Medical Laboratories v Prometheus Medical Laboratories, the Supreme Court "removed gene patents as a legal barrier to large-scale sequencing," Roger Klein, chair of the AMP professional relations committee, said at the meeting. "Rapid growth and advancement in diagnostics has continued in part because of these decisions. However, thousands of existing gene patents may continue to create impediments to diagnostic development. Although patent protection for some therapeutic and industrial biotechnology applications appears to have weakened, the long-term effects are unclear."

In 2013, the Supreme Court ruled that because products of nature cannot be patented, Myriad's patents held on the BRCA 1 and BRCA 2 genes were invalid. AMP, the lead plaintiff, argued that separating a gene from its natural environment was not an act of invention, and that techniques used to isolate BRCA 1 and BRCA 2 had been in routine use at the time of Myriad's discovery, and the court agreed.

Because of the court ruling other molecular diagnostics laboratories could begin offering clinical sequencing tests for those two and other genes. The ruling had been preceded by the case of Mayo v. Prometheus, in which the court ruled that claims around administering a drug to a patient, measuring metabolites of that drug, and using that information to increase or decrease the drug's dosage were not patent eligible.

"The two cases had similarly written opinions and they had common themes running through them — most of all that you cannot patent laws of nature," Klein told GenomeWeb. "To understand the full implications of the AMP v. Myriad decision, you also need to look at the Mayo case, and when you take them together they say you can't patent isolated DNA and you can't patent the relationships between changes in DNA and the physical properties attributable to those changes, such as predisposition to disease."   

Together these rulings gave the molecular diagnostics and omics space a boost that encouraged competition and innovation, Klein said. "I think the AMP v. Myriad and Mayo v. Prometheus suits freed up large-scale genomic testing generally," Klein told GenomeWeb. "Without the rulings in these two cases, one could not have sequenced an exome without infringing many patents. Hereditary cancer, and breast cancer in particular, is perhaps the most visible example, but the impact is much broader than this class of diseases."

In the US, gene patents still exist and inventors can patent cDNA advances. "Genes patents are still out there because they were obtained before this decision," Klein said. "The patent office shouldn't be granting any more, but we have thousands that have already been granted and they are not automatically invalidated by the Mayo and Myriad decisions. Each patent must be treated on its own. Although they could lose, a company that has an existing patent can sue a potentially infringing party and try to enforce it."

Suing for patent infringement is pricey, however, and the required investment may deter entities from entering litigation.

"These suits can cost millions of dollars to litigate," Klein said. "You have to look at what the entity that is trying to enforce the patent could potentially gain. If all you can get back is $50,000 in damages in trying to defend a patent that has a high likelihood of being found invalid, it makes attempts to enforce the patent a hard thing to justify economically."

Klein said he sees few if any of these types of lawsuits now. "I suspect that there's a lot of infringement going on because I know there is a lot of large-scale sequencing being done, but I'm not aware of patent holders suing laboratories because of it," he said.

"Without this decision, however, these existing patents could have proven to be a huge obstacle to doing any sort of large-scale sequencing," he added. "I don't think the field could have grown and advanced the way it did if we continued to have gene patents — both on the variants themselves and on the relationship between a variant and a physical property."

The argument for gene patents

At the AMP meeting, Timothy Stenzel, chief operating officer at MDx company Invivoscribe, countered that patents are necessary to encourage invention and investment in the molecular diagnostics space.

Stenzel found value in providing a description of the purpose of a patent, which he said "is a temporary government-granted monopoly right on something discovered by an inventor. The historical purpose of the patent system was to encourage the development of new inventions, and in particular to encourage the disclosure of those new inventions."

In Europe, inventors may patent nucleic acid sequences as well as cDNA and gDNA advances when the sequence is isolated, and European courts have issued numerous decisions recently defending gene patents, Stenzel said.

In the US, gene patents have been weakened but not eliminated, and inventors may patent cDNA advances, he added.

Patents are only one element of intellectual property; others include registered trademarks, brands, copyrights, registrations, trade secrets, and commercial, marketing, and technical know-how, he said. However, molecular diagnostics is still an emerging field and would benefit from additional protections, he argued.

An uncertain regulatory and reimbursement environment may underscore a need for patents, he said. "Relative to the charges for pharmaceutical and medical procedures, molecular diagnostics are currently well undervalued in the US," Stenzel said. "In fact, typical reimbursement compensates for labor, not clinical value. Molecular diagnostics has become a commodity market well before it has been fully established," which adds risk to its future potential.

Stenzel said he believed that rigorous clearance and approvals required by the US Food and Drug Administration are another reason to allow companies to project intellectual property.

"It may cost up to $20 million to get pre-market approval for a molecular-based companion diagnostic," he said. "The cost to achieve a 501k-level submission is in the range of $1 million to $2 million" in addition to the investment necessary to develop a high-quality MDx.

"What this means is that smaller labs will not be submitting to FDA," Klein said. "They don't do enough volume to ever justify the required investment. This is why we currently have so few FDA-cleared tests in genetic testing."

Market sizes, especially for rare diseases, don't justify investing in extensive and expensive clinical trials, he said. "One of the challenges we face in oncology is that the process is also too long, and by the time you get the test cleared new markers may have been discovered. LDTs are actually a safety valve because they are able to compensate for tests that become rapidly outdated in many cases." 

Stenzel said that one of his concerns resulting from the AMP v. Myriad decision is that competition is pushing down test pricing to unsustainable levels. "It is now a race to the bottom for pricing to the point where academic centers are unlikely to be able to compete," Stenzel said.

By contrast, AMP had argued in its case that within the market environment prior to the Supreme Court ruling, one entity could prevent anybody else from testing, Klein said. "So, you are likely to have increased pricing and, when there's no competition, innovation can also suffer."

Still, gene patent holders have ethical and social responsibilities, Stenzel said. These duties include ensuring that tests are harmonized internationally and that they are reliable and accurate. Patent holders developing tests must also ensure that regulatory approvals are obtained throughout the world, he added.

Labs have a dilemma regarding the type of approved test to perform, he said. This is an issue that could be resolved by a single patent holder attending responsibly to tasks, submitting one harmonized test and then making it universally available, he added.

In closing, Stenzel posed questions in support of his pro-patenting stance. "What company has achieved success and stability without patents?" he asked. "What major academic institution hasn't greatly benefitted from licensing and royalty income?"

Stenzel also suggested that patents help support higher reimbursement for molecular testing, help startups raise capital needed to fund the early years, and give small companies the ability to compete against the 800-lb. gorillas.

"I don't buy the idea that every company bases its success on patents," Klein told GenomeWeb. "To my knowledge, new companies that are charging low prices for sequencing don't have patents on genes. I don't think intellectual property is at the core of laboratory businesses such as Quest or LabCorp, for example. They are succeeding because they provide quality services at low prices. In pharmaceuticals, companies providing generics succeed, and they don't get into the market until the patent expires."

Unknown significance

The breadth of new entrants into the omics and molecular diagnostics space since the Supreme Court decisions created competition that has driven down costs and made substitute tests available. To continue to differentiate offerings, labs developed next-generation sequencing tests and launched larger panels, providing increased access to new people.

Companies such as Color Genomics and Veritas Genetics are selling hereditary cancer testing for between $200 and $250 compared to Myriad's $4,000 test. Invitae has an option whereby individuals without insurance pay around $400 for tests. Substitute tests have created a means for comparisons among tests, and lower prices have created broader access to second-opinion tests.

Testing more people, however, means labs will pick up never-seen variants and sometimes they're interpreting these variants incorrectly. Managing variants of unknown significance is among the key challenges for new laboratories offering BRCA testing, Stenzel said.

Many industry experts have recently voiced similar concerns. The broader availability of NGS testing may "result in more anxiety and inappropriate recommendations if it's not used with appropriate genetic counseling," Linda Mileshkin from Peter MacCallum Cancer Centre, Melbourne, said at the American Society of Clinical Oncology's annual meeting in June, while reviewing data on ovarian cancer risk genes from a large group of women assessed on Myriad Genetics' myRisk Hereditary Cancer test.

"The genetic tests that we all run are useless if we're giving wrong answers, and could be harming patients," Heidi Rehm, director of the Laboratory for Molecular Medicine at the Partners HealthCare Personalized Medicine told GenomeWeb while discussing a project involving ClinVar, a freely available archive of genotype and phenotype relationships the NIH publicly launched three years ago. "We know labs are interpreting things differently, which means that at least some patients are getting the wrong answers. So, we clearly have a problem. But evaluating evidence on variants is challenging and labor intensive."

In October, at a meeting held in Washington, DC, genetics and legal experts urged an independent committee to study the growing liability risks for labs when interpreting genomic variants and recommend best practices for sharing data and working collaboratively to resolve classification discrepancies.

"The possibility that a laboratory professional would misinterpret a variant has been present since we began doing clinical sequencing," Klein told GenomeWeb this week. "This issue has been with us for a long time. However, the American College of Medical Genetics and Genomics and other organizations have guidelines on variant interpretation in germline disorders, and the problem is best minimized or averted by having well-trained, experienced molecular geneticists and molecular pathologists responsible for issuance of reports."

The genetics and molecular pathology communities are extremely serious about this, as variant interpretation is arguably the most critical service we perform, he added. "We have reached a point where accurate and reliable sequencing is routinely performed, and in fact the genotyping itself is beginning to become commoditized. The distinguishing feature among laboratories may well be the quality with which they interpret the genetic information obtained."