By Donald Zuhn --
In a press conference held earlier today, the Biotechnology Industry Organization (BIO) expressed concern about recommendations to be issued on Friday with a report on gene patents. The report, entitled "Gene Patents and Licensing Practices and Their Impact on Patient Access to Genetic Tests," is being issued by the Secretary's Advisory Committee on Genetics, Health and Society (SACGHS), which is charged with advising the Secretary of Health and Human Services on human health and societal issues raised by the development and use of genetic technologies.
BIO did not stand alone in opposing the report's recommendations at the press conference. Appearing with and in support of BIO President and CEO Jim Greenwood were former Senator Birch Bayh, co-author of the Bayh-Dole Act; Dr. Brian Stanton, a member of the SACGHS Task Force on Intellectual Property and Access to Genetic Testing; Dr. Jim Davis, Executive Vice President, General Counsel and Secretary of Human Genome Sciences, Inc.; and Dr. Jon Soderstrom, the Managing Director of the Office of Cooperative Research at Yale University.
Mr. Greenwood (at left) began by noting that the while the SACGHS report indicates that gene patents and licensing practices have not had an adverse impact on patient access to genetic tests, the Committee will nevertheless be making recommendations that "would undermine the U.S. patent system and the Bayh-Dole technology transfer system that have served our nation so well." However, despite the success of the U.S. patent system and the Bayh-Dole model, the BIO CEO observed that:
Unfortunately, there are academic and other critics who view the private property rights granted by Bayh-Dole in federally supported research with suspicion, if not outright hostility. Despite all evidence to the contrary, they persist in believing that the U.S. patent system and the Bayh-Dole Act hamper patient access to the very life-saving therapies and diagnostics that these systems make it possible to develop in the first place
Mr. Greenwood contended that the Committee's recommendations "would discourage investment in biotech innovation, hobble the transfer of federally-funded research, undermine university research programs, and harm patients who are waiting for life-saving therapies and diagnostics yet to be developed."
Senator Bayh (at right) bemoaned the need to once again respond to "a small number of determined critics who want to send us back to a time when it appeared that American innovation was on its last legs and our economy was in deep distress." The former Indiana Senator explained that prior to enactment of the Bayh-Dole Act, the federal government owned all of the patents that resulted from federally funded research. During Senate Judiciary Committee hearings on the legislation, the Committee reported that "it could not find a single instance where the old policies had resulted in even one drug being developed when the government owned the patents." Moreover, despite investing more than $30 billion in taxpayer dollars, the Committee found that before Bayh-Dole, some 28,000 patents were "gathering dust on the shelves of the Patent and Trademark Office." After enactment of the Act, however, more than 6,000 new companies were founded on university inventions, more than 4,000 new products came on the market (including 153 new drugs, vaccines, or in vitro devices), at least 279,000 new jobs were created between 1996 and 2007, and over $457 billion was added to the country's gross national product. Senator Bayh contended that history has shown that the SACGHS recommendations, which he believed would roll back the advances made under Bayh-Dole, "would have a disastrous impact on the American economy."
Dr. Stanton, who served on the SACGHS task force, informed reporters that the Committee's report "has no evidence of harm, and yet it still calls for changes." Among the changes, the one that has garnered the most attention is a proposal to exempt gene patents from infringement liability. While Dr. Stanton acknowledged that the task force did identify a few isolated instances of harm that need to be addressed, he noted that the task force also determined that "the court systems and the systems of checks and balances that are built into the fabric of the patent system were more than capable of addressing problems on a case by case basis." Dr. Stanton also noted that the report contains a letter of dissent from three members of the full Committee, who interestingly, were the only members having direct experience in both business and law as it relates to intellectual property and the private sector development of products and services.
Dr. Davis used HGS' experience with the human gene bliss to illustrate the importance and value of gene patents. He recalled that when the company first identified the gene, it did not know whether its value would lie in diagnostics, as a target to generate small molecule therapeutics, in its encoded protein, or in antibodies directed to that protein. However, thirteen years after HGS identified the gene, the company turned this knowledge into a drug for use in the treatment of lupus, which Dr. Davis noted was the first new lupus therapeutic to be developed in the past 50 years. Over the course of the drug's developmental period, HGS spent some $2 billion on a number of programs, the majority of which failed after reaching the clinic or which never made it out of the lab. Noting that for every success story, ten to twenty drug candidates "die in the clinic" and another one to two hundred never reach the clinic, Dr. Davis asked where the investment dollars would come from if companies were prevented from securing patents at an early stage as HGS did with bliss. Declaring that "patents matter," Dr. Davis pointed out that the entire biotech/pharma industry was built on the practice of licensing patents, a system that "provides enough of an incentive for each of us to find our own products in our own way." Observing that the U.S. has one of the strongest and most well-funded biotech industries in the world, Dr. Davis contended that this was due in no small part to the U.S. patent system.
Dr. Soderstrom (at left) started by pointing out that the Bayh-Dole Act "really transformed the entire way that we, as universities, interact with the commercial sector," and as a result, helped create a whole new industry. He noted that an annual survey conducted by the Association of University Technology Managers (AUTM) indicated that AUTM members had gone from issuing dozens of licenses more than twenty years ago to issuing over 5,000 licenses in 2009 alone. Dr. Soderstrom also noted that over the past twenty years, patents licensed by AUTM members led to the development of more than 10,000 new products. Significantly, Dr. Soderstrom stated that prior to Bayh-Dole, not a single drug had been developed using Yale's own patent technology, and that since the passage of the Act, five drugs based on Yale patents had made it to market and eighteen more are in clinical trials today. Based on his involvement in the formation of some 35 biotech companies over the last decade, and in the raising of more than $450 million in venture funding, Dr. Solderstrom bluntly declared that:
It's hard, and if people think it's easy, they're fooling themselves. And if they think that companies are investing just out of charity, they're really deluding themselves as well. What companies demand is the ability to protect their investment.
Returning to the SACGHS recommendations, Dr. Solderstrom admitted that what frightens him is that the recommendations are "essentially a reconstitution of the world as is it existed before 1980."
During the question and answer portion of the press conference, Dr. Davis argued that although the SACGHS report only singles out gene patents, "it's really gene patents that are the foundation of the biotech industry," explaining that gene patents have led to the development of both diagnostic and therapeutic products. Senator Bayh then asked "if it starts here [with gene patents], where will it go next?" Dr. Solderstrom observed that while the report presents empirical evidence showing that gene patents have no adverse impact on patient access to genetic testing, "the recommendations would have you believe that there is a problem and they're going to fix it." He also used a drug initially developed at Wayne State University with federal funds to illustrate the difference between public and private sector funding of drug development, noting that the NIH provided about $150,000 for initial development of the compound and that BMS spent about $350 million to get the drug to market as a part of an HIV cocktail. Dr. Stanton concluded the press conference by saying that although he was a member of the task force, he "would not take ownership, authorship, or credit for the language, content, or components of this report," and in fact had submitted a dissenting opinion.
BIO has made a podcast of the entire press conference available here.
Image of Senator Bayh courtesy of Indiana University.