Gene patents

Foundation of the Industry

Gene patents, more specifically patent claims to nucleotide sequences, such as genes, plasmids, and probes, are fundamental and critical to the biotech industry. They are the foundation of the industry. Such claims protect therapeutic proteins, like human insulin; Mabs, like Herceptin®; transgenic plants, like insect-resistant corn; and diagnostic probes for genetic diseases, which are the foundation for personalized medicine. Banning such patents risks shutting down a large part of the industry and creating a major roadblock to progress in patient care and food production.

Inventions do not move from the laboratory to the marketplace without a huge investment of money, time, and effort. A Tufts University study has found that it takes over $800 million to bring a new drug to market. The author is not aware of similar studies for transgenic plants or gene-based diagnostics, but the cost must be substantial, even if less than for drugs.

For diagnostics in particular, critics have argued that it is a relatively quick and straightforward process for a laboratory to develop a molecular diagnostic once a particular disease-associated gene has been identified in the scientific literature. However, an examination of financial disclosure documents of some molecular diagnostic companies indicate that this is not the case.

For example, the prospectus for Genomic Health’s IPO, dated September 8, 2005, states that the company would use $20 million of the proceeds to fund R&D. Third Wave’s 10-K for 2005, the latest available, states that it spent $8.4 million for R&D for that year. These amounts would cover several products, but clearly a substantial amount of money is involved. Quite simply, this investment will not happen if, after it is done, a competitor can get a free ride on the pioneer’s efforts and knock-off the product.

http://www.genengnews.com/articles/chitem.aspx?aid=2052