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.
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