An interesting week in the world of DNA and drug patents

A couple of weeks ago, I broached the subject of Myriad Genetics and the BRAC1 and BRAC2 genes. Turns out the case is finally going to be heard by the Supreme Court next week. The case asks the Court to consider a very important question: Can companies patent human genes?

For the court, this is a patent issue, as Emily Brazelon from Slate sums up so well:

The point of patents is to protect the investment it took to create or invent something new. It’s a way we reward and encourage invention. In 1793, as Yale history of science professor Daniel Kevles points out in his extremely helpful articlefor the New York Review of Books, Congress borrowed the words of Thomas Jefferson and declared patents available “for any new and useful art.” In 1952, the scope of potential patents expanded to “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement.”

Does “composition of matter” include the BRCA genes—and should it? You can’t patent one of the natural elements in the periodic table. Yet the U.S. Patent Office has granted more than 3,000 patents for isolated DNA molecules, including genes like the BRCAs.

In this particular case the problems are very real. What if Myriad Genetics test is wrong? How can someone get a second opinion before committing to a mastectomy? What happens if Myriad Genetics decides it needs to raise its profit margin, pricing out the vast majority of people?

If the Court rules that human genes can be patented, a company or person would be allowed to own another human’s genetic material. On a philosophical level, does this mean that you would no longer own yourself? What would be the consequences? Would that put the government, in charge of patent enforcement, in the position of prosecuting its own citizens for using their own genes?

Patents are also big business for drug companies, as Thomas Bollyky points out in the Atlantic this week:

Why does Gleevec, a leukemia drug that costs $70,000 per year in the United States, cost just $2,500 in India?

It’s seemingly simple. Gleevec is under patent in the U.S., but not in India. Accordingly, Novartis, its Swiss-based manufacturer, may prevent competitors from making and selling lower-cost versions of the drug in the U.S., but not in India.

. . .

Rejecting the Gleevec patent application is not the only step that the Indian government has taken to circumvent patents on cancer drugs. Last year, India issued a compulsory license on Nexavar, a late-stage kidney and liver cancer treatment, enabling a local drug firm to produce a generic version of this medicine without the permission of Bayer, the patent holder. India has recently announced plans to grant compulsory licenses on another leukemia drug and two breast cancer therapies.

India is not alone. Indonesia recently issued a compulsory license for a treatment for liver cancer-causing hepatitis B. China and the Philippines amended their pharmaceutical patent laws, making it easier for those governments to take similar measures as India.

Three trends are driving these moves, suggesting more fights over patients, patents, and drug prices are forthcoming.

For many years drug companies have used the expense of R&D to justify high prices and extended patent protestions, claiming it takes $4-$11 billion to bring a new drug to market. The problem? The number is a total myth.

Donald Light and Rebecca Warburton’s research tell a much different story:

In sum, we estimate that the median, net, corporate cost to develop a new drug, based on the confidential cost data that companies reported to their policy research center at Tufts University, is $56 million in 2011, plus the unknown company costs of discovery and the artificial estimate of profits foregone, if you think it should be added. We also show that R&D costs for in-house new active ingredients are much higher, and costs for me-too variations are much lower than this single figure.

Our estimate is almost double the only solid corporate report of R&D costs, which can be found in audited tax returns from the late 1990s. Here companies reported average costs for clinical trials per drug of only $22.4 million. Not $224 million but $22.4 million.

If you’re a drug company, you have a pretty good thing going on here in the United States. Look at all the work you don’t have to pay for. Data, research, and clinical trials from tax payer funded agencies like the National Institutes of Health and the Department of Defense (the military spends nearly $700 million a year on biomedical research). You also have access to government and privately funded university research as well as philanthropic foundations.

According to Forbes Pfizer raked in more than $10 billion in profits in 2012; Johnson & Johnson $9.6 billion; Merck $6.3 billion; Abbott Labs $4.7 billion; and Eli Lilly $4.3 billion. And that is just the top 5.

Forgive me if I don’t shed a tear for drug companies. Governments are trying to help save their citizens lives, if that means Pizer and Merck make a little less profit, so be it. At the least they should be happy they aren’t being forced to pay back the federal government for all the money tax payers have put out for their businesses.


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