A Perspective on the Cost of the Myriad BRCA Gene Test

By Kevin E. Noonan --

One of the most compelling arguments in the gene patenting debate with the public has been the cost of the Myriad BRCA gene test:  $3,000 per test, a price that many without insurance coverage cannot afford.  The argument rarely is embedded within a comparison with other tests, and is presented as an absolute indication of Myriad's greed and the putative pernicious effects of permitting patents on such testing.  But an article in the New York Times published last Saturday sheds some light on the question in a way that might surprise anti-gene patenting partisans.

The article, "Variations on a Gene, and Tools to Find Them," by Anne Eisenberg, is concerned with gene testing of patient tumor samples to improve diagnosis and treatment.  It begins by noting the sea change that cancer genomics has effected on diagnostic criteria:  while in the past, cancers were characterized by tissue type and morphology, in recent years ("in the age of genetically informed medicine"), the identities of mutated or disordered genes provides more specific information that can be used to craft treatment strategies.  An example noted in the article is BRAF V600E (a mutation in the B-raf gene than changes a valine to an glutamic acid residue at amino acid 600 in the protein's amino acid sequence) in melanoma.  But the article also recognizes the complexities that this information creates, quoting Vanderbilt University oncologist Dr. William Pao that "[t]here are so many genes and so many mutations . . . .  The human brain can't memorize all those permutations."

Dr. Pao is highlighted in the article for his work in creating an online database, My Cancer Genome, which lists mutations found to be associated with different cancer types and therapies (experimental and FDA-approved) that can be used against these specific tumor types.  The article notes that the site "is maintained by 51 contributors from 20 institutions" and that users (physicians) are not charged for the service, the site being "supported almost entirely by [Vanderbilt U]niversity and by philanthropy."  This is not the whole story, of course, because (as stated in the article) "[b]efore doctors go to My Cancer Genome or a similar site, their patients must have a diagnostic test to find relevant mutations."  The advent of commercial genome sequencing services has made this testing "available to neighborhood doctors" after years when such tests were available "mainly to patients at large university cancer centers, and were often hard to interpret," according to Dr. Fadi Braiteh, an oncologist at Comprehensive Cancer Centers of Nevada in Las Vegas.

This is the point in the article that begins to have specific relevance to the issue of Myriad's BRCA testing costs.  Dr. Braiteh is quoted in the article as using a test, FoundationOne, from Foundation Medicine in Cambridge, Mass.  The cost:  $5,800.  Another example cited in the article is Genomic Health, which provides a test for determining the best chemotherapeutic options for patients with breast cancer.  The cost:  $4,290.  These costs are justified in the article by the successes they have enabled:  while admitting that the information doesn't help every patient, doctors are quoted as advocating the use of these tests, for example, because in one patient the doctors "were able to give a drug [] never used before for this mutation" that was effective in treating the patient's otherwise therapy-resistant cancer.

There are a few things that need to be considered from this information about these tests, not only that they are even more costly than the Myriad BRCA gene test.  First, these tests are given to individuals already diagnosed with cancer, and are used to direct treatment decisions.  Thus, there is little to no need to provide genetic counseling to the patients, or to convince insurers of the benefits of the testing -- these patients are already recognized as being sick, and any treatment that is effective will almost assuredly reduce the costs the insurers will need (or be required) to pay.  Also, the testing is being performed in 2013, 16 years after the BRCA gene patents were granted and Myriad began to develop genetic testing for the BRCA genes.  This type of genetic testing is now both widespread and accepted both by doctors and insurers (to some extent at least), public and private.  It must be remembered that in 1997 genetic testing was in its infancy, and companies like Myriad were under the burden to convince payors that the tests did the one thing that all insurers, public or private, require of such tests:  save them money in the long run, by identifying patients with a high probability of becoming ill and costing the insurers much more for treatment than the costs of prophylaxis.  Moreover, Myriad and like companies needed to convince doctors that the testing was worthwhile, and to establish a network of genetic counselors who could explain to healthy women that they were at much greater risk of developing breast or ovarian cancer than normal, under circumstances that resulted in empowerment from the information and not abject fear.  And in 1997, genetic sequencing technology was not as developed as it is now, and the mechanisms and techniques needed to minimize or eliminate the occurrence of false positives or negatives had not been conclusively established.

The question of whether $3,000 a test is what is required to provide an appropriate return on investment to Myriad's investors is beyond our scope, and the extent to which what Myriad, Foundation Medicine or Genome Health charge for its tests is an indictment of the U.S. healthcare system cannot be definitively determined here.  But it is clear that Myriad's costs are in line with what other genetic diagnostic test providers charge for their tests, and that the efforts to demonize Myriad for these costs is at best uninformed.  It remains to be seen whether the touted "$100 BRCA test" will be provided by those who perform this testing when Myriad's patents expire in the next few years (whether or not the ACLU prevails in its attempt to have the Supreme Court ban gene patenting).  The information in Ms. Eisenberg's article indicates that such an outcome is unlikely.

Comments

[David Koepsell]

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.

[EG]

"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.

[Roy]

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

[Paul San Quentin]

"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.

[Kevin E. Noonan]

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.

[6]

For 100$ I guess I could test them.

[Gary Johnston]

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.

[Kevin E. Noonan]

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.

[Arthur Gershman]

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