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« Allergan, Inc. v. Sandoz Inc. (Fed. Cir. 2013) | Main | Conference & CLE Calendar »

May 02, 2013

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Ahh, I found my answer... part of those prices can be accounted for by patents and licensing costs:

"Several practical obstacles stand in the way of that vision. One is that some important cancer-related genes have already been patented by other companies—notably BRCA1 and BRCA2, which are owned by Myriad Genetics. These genes help repair damaged DNA, and mutations in them increase the risk of breast or ovarian cancer. Although Myriad’s claim to a monopoly on testing those genes is being contested in the courts and could be overturned, Pellini agrees that patents could pose problems for a pan-cancer test like Foundation’s. That’s one reason Foundation itself has been racing to file patent applications as it starts to make its own discoveries. Pellini says the goal is to build a “defensive” patent position that will give the company “freedom to operate.”

see here: http://www.technologyreview.com/featuredstory/426987/foundation-medicine-personalizing-cancer-drugs/?mod=chfeatured

So we don't know what the prices would do in a free market with unhindered competition, but economic theory suggests they would drop.

"So we don't know what the prices would do in a free market with unhindered competition, but economic theory suggests they would drop."

David,

I would have hoped for a better comment from you than the one above, but I guess you believe that research & development on genetic testing, like money, grows on trees. Developing these genetic tests isn't inexpensive, and the potential liability risk involved with such tests I would expect to be significant. (That liability risk is also one reason why there's a huge shortage sometimes for certain vaccines.) Even with patents involved, there is still a free market and competition; if you've got a better and different genetic test (and one that's price competitive), you'll be competing.

Not to mention that studies have not found a patent premium when comparing Myriad's patented test to other cancer related unpatented tests.

http://fds.duke.edu/db/attachment/1368

"That’s one reason Foundation itself has been racing to file patent applications as it starts to make its own discoveries. Pellini says the goal is to build a 'defensive' patent position that will give the company 'freedom to operate.' "

Of course, the only right that they will receive from any patent is the right to exclude others. And what prevents their patents from being dominated by another more broadly applicable patent (I guess their IP can be used as leverage in cross-licensing )? So, perhaps mere publication would have been the cheaper - and more altruistic - way to go.

All:

We will have our real world experiment in a few years, when Myriad's patents expire. I think prices will drop some but not much.

Which isn't the point - the point is the comparison and the widespread belief that Myriad is a particular avaricious bunch.

We will discuss the myth of the freely available genetic diagnostic tests absent patenting in a future post.

Thanks for the comments.

For 100$ I guess I could test them.

Performance of the BRCA test in the manner of Myriad does not infringe a U.S. patent. It never has. The price argument is really just a generic anti-patent argument. The price is ultimately whatever the market bears. If you want to perform the BRCA test in the manner of Myriad, go ahead and do it right now. Myriad has an established brand, and a proprietary database of mutations/variants. Other than that, there is no reason why another cannot compete. Just once I'd like to see an article in the mainstream press stating that the BRACAnalysis test has never been patent-protected. Not even the EG's and David Koepsell's of the world seem to understand that.

Well, Gary, that is certainly true of the isolated DNA claims. But Myriad believes it has claims that would pass the Mayo test, and hinted it would assert them if anyone starts offering the test. Which may be part of the confusion.

Please see this opinion piece in the NYT by medical oncologist David Agus of USC:
http://www.nytimes.com/2013/05/21/opinion/the-outrageous-cost-of-a-gene-test.html?_r=0

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