We are probably all familiar with the opposing arguments in the 'Gene Wars' debate:
- those in favour of gene patenting argue that patents are essential to support high risk and high cost medical discovery and development;
- those against gene patenting claim that gene patents limit the accessibility and inflate the price of medical services.
- the 2004 Australian Law Reform Commission's report, Genes and Ingenuity: Gene patenting and human health;
- the 2010 Senate Community Affairs References Committee report on Gene Patents; and
- the 2011 report by the Senate Legal and Constitutional Affairs Legislation Committee, Patent Amendment (Human Genes and Biological Materials) Bill 2010.
To address this information gap, IP Australia commissioned The Centre for International Economics (the Centre) to investigate the economics of isolated human gene patents in Australia. The Centre recently released its final report 'Economic Analysis of the Impact of Isolated Human Gene Patents' (the Report). A copy of the Report can be accessed here.
Key findings
The Report focuses primarily on isolated human gene sequence patents, which it defines to mean patents that include at least one claim to an isolated human gene sequence or a fragment of an isolated human gene sequence (as opposed to patents that claim modified gene sequences or only methods for using a gene sequence).
One of the key findings of the Report is that isolated human gene patents have, particularly since the completion of the Human Genome Project in 2003, been playing a less significant role in the patent landscape, with more and more patents focusing instead on:
- methods of using isolated gene sequences; and
- not naturally occurring DNA and genetic sequences (ie, sequences created in the laboratory).
In fact, the vast majority of full-length isolated human gene sequence patent applications were filed prior to the completion of the Human Genome Project in 2003. This is despite the fact that gross business expenditure on research and development in the medical and health sciences sector has tripled over the past ten years, and National Health and Medical Research Council funding for research on human genetics and genomics for large public entities has increased by two and a half times.
Other findings of the Report include that:
- approximately $795 million was invested in gene technologies related to human health during 2011-12 (a number that has been increasing over time);
- most of that $795 million is funded by governments (specifically, 79 percent or approximately $628 million);
- analysis suggests that price premiums are paid for patent-related genetic tests;
- quantifiable monetary impacts attributable to isolated human gene sequence patents are small in terms of royalty and fee income related to the patent (specifically, $1.1 million to $2.6 million per annum is estimated to be earned by publicly funded research institutions).
The Report concludes that the real value in patents is their role in incentivising innovation and the public-private partnerships that are needed to bring new human gene based therapeutics and diagnostics to market, and that, reflecting changes in patent activity, increasingly the patents involved are those that are not isolated human gene sequence patents.
Comment
The Supreme Court of the United Stated recently held in Association for Molecular Pathology v. Myriad Genetics, Inc. that isolated naturally occurring DNA sequences are not patent eligible (see our previous blog post here).
In light of the findings of the Report, it may be that this decision (and the outcome of the Full Federal Court appeal in the Australian Myriad Genetics proceedings – see our previous blog post here) will not have a large impact on the biotech industry in the future, as isolated naturally occurring DNA sequences appear to be playing a diminishing role in the patent landscape since the Human Genome Project was completed in 2003.
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