Controversial Supreme Court Ruling on Gene Patents has Implications for Health Informatics

19 Jun

By Michael Quigley, Research Analyst, LSN

mike-2The Supreme Courts ruled last week that naturally occurring genes are no longer patentable. The case was brought to the Supreme Court by the American Civil Liberties Union against Myriad Genetics Inc. for their patents on the BRCA1 and BRCA2 genes (two genes strongly correlated with breast and ovarian cancer) on behalf of researchers, doctors and cancer patients. For many, this ruling was seen as long overdue, as the idea of owning something that nature produces on its own is counter-intuitive. However, prior to this ruling, various companies had patented approximately 20% of the human genome, some of which they held for as long as 30 years. (1)

The largest benefactors of this ruling include diagnostic services companies, who can now test patients for previously patented genes that have a known association with a disease or disorder. Patents will also benefit now that companies are no longer able to have monopolies on the tests for these genes; the prices of these tests for patients – which, for certain indications, can cost more than $3,000 and aren’t always covered by insurance – are already dropping dramatically. (2)

With a likely surge of patients getting tested for the presence of these genes, bioinformatics companies will see a boost in amounts usable patient data for their software programs. Combining that with the fact that screening and sequencing costs are dropping at a rate faster than Moore’s Law for molecules, as well as an increasing number of hospitals going digital with their data, many early-stage investors are looking at health informatics as a potential “megatrend” in the drug discovery and diagnostics space. (3) The idea that software and informatics could be a serious player in the development of novel advancement in this industry is not new. However, with this ruling in place, it seems to be a much more a viable theory.

The opposition to this ruling this stems in part from the fact that without the ability to patent genes, funding for companies that are actively searching for genes correlated to diseases will pull back farther than it already has. With companies unable to patent the genes they discover, these discoveries become much less profitable, and therefore, less attractive to investors. However, the ruling also states that synthetic genes (cDNA) that are derived from natural genes but made synthetically still can be patented. These synthetic genes are often honed versions of their natural counterparts, and are used frequently in therapeutics. The ruling that these synthetics can be patented will actually be an attribute for companies working with them in terms of gathering funding, as investors finally have closure in an issue previously clouded in uncertainty.

It seems obvious that something produced naturally should not be patentable. But if having patents exist encourages investors to fund and push the science forward, the decision becomes more ambiguous. In the end this decision will aid millions by providing them will more affordable medical tests, and further down the road, more personalized treatments as a result of the increased inflow of patient data.

1. Cutler, Kim-Mai. “Supreme Court Ruling On Gene Patenting May Be A Boon For Biotech Startups.TechCrunch RSS. TechCrunch, 17 June 2013. Web. 19 June 2013.

2. Than, Ker. “7 Takeaways From Supreme Court’s Gene Patent Decision.National Geographic. National Geographic Society, 14 June 2013. Web. 19 June 2013.

3. Cutler, Kim-Mai. “SV Angel Says Health Informatics Is One Of Its New “Megatrends”.TechCrunch RSS. TechCrunch, 25 Apr. 2013. Web. 19 June 2013.

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