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The Great Gene Grab

Will the frenzy of gene patenting drive innovation-or stifle medical advances?
September 1, 2000

Imagine that when Neil Armstrong stepped onto the lunar surface for the first time in July of 1969 to plant the American flag and proclaim “one giant leap for mankind,” he found that a number of companies and universities had gotten there first and divvied up the moon for themselves. Not only had they quietly laid claims to the most promising parcels of lunar real estate, but they had done so with the blessings of the U.S. government.

Sound absurd? Well, that’s the fate of the 10-year, multibillion-dollar effort to decipher the human genetic code. In June, amid much fanfare, the directors of the publicly funded Human Genome Project and executives at Celera Genomics, a Rockville, Md.-based startup, announced they had separately finished sequencing most of the three billion DNA letters that comprise the human genome-the so-called “Book of Life.” This rough draft of the human genome, the leaders of the decade-long public effort proclaimed proudly, represents an invaluable resource free for use by all humanity in its quest to diagnose and cure diseases.

The only problem is that numerous passages (and many of the most interesting sections) in this Book of Life have already been staked out as private property. Even as the Human Genome Project and Celera competed to finish sequencing the genome, a separate race was well under way: a race to patent as many human genes as possible. The frenzied patenting effort, taking advantage of the same automated sequencing technology and high-powered computers that made the Human Genome Project possible, has been spearheaded by a handful of “genomics” companies, high-tech startups whose laboratories are uncovering genes by the fistful-and whose legal departments are filing patent applications almost as fast.

Human Genome Sciences of Rockville, Md., which has been aggressively filing its claims since 1994, holds patents on 103 human genes, including those believed to be responsible for osteoporosis and arthritis; it has patents pending on another 7,500 genes. Incyte Genomics of Palo Alto, Calif., tops the list with some 400 patented genes, while Celera, which only began decoding DNA last year, has already filed patent claims on at least 6,500 gene sequences. Universities and government agencies are also involved: The University of California and the National Institutes of Health are among the most active gene patenters (see table ” Gene Patent Fever” on last page).

“The patenting is intense,” says Mark Boshar, associate general counsel at Millennium Pharmaceuticals, a genomics firm in Cambridge, Mass. Boshar says the reason for the frenetic pace is simple: “There is one human genome and a finite number of genes.” The number of human genes is likely somewhere between 50,000 and 150,000 (geneticists are still debating the actual number). Of those, about 1,000 have already been patented, and applications on thousands of others await approval.

Man-Made Genes

During a decade and a half of lecturing on biotechnology law, University of Michigan legal scholar Rebecca Eisenberg says she’s been asked the same question countless times: How can anyone “invent” and patent the genes that each of us have carried since birth? Although patent law allows inventors to claim new and useful machines, processes and compositions of matter (say, the chemical recipe for a novel plastic) as proprietary creations, that privilege traditionally has not extended to “products of nature,” such as the elements in the periodic table. However, when it comes to human genes, says Eisenberg, legal precedent offers a way around that prohibition, namely that genes captured and identified in the lab aren’t in their natural form. In order to be studied, genes are copied, abbreviated, spliced into bacteria or otherwise altered. From the point of view of patent law, a gene is just another man-made chemical.

Using that logic, the U.S. Patent Office began issuing the first patents on human genes in the 1970s. Since then, gene patents have become the bedrock of the burgeoning biotech industry. Human growth hormone, insulin and erythropoietin-protein drugs with billions of dollars in combined annual sales-are all manufactured using patented DNA sequences. Given the incentive of 20-year patent protection, several dozen new drugs have been brought to market (with hundreds more in the pipeline) by a U.S. biotech industry that now numbers 1,200 companies and counts $13 billion in sales, according to the Biotechnology Industry Organization (BIO), a Washington, D.C., trade group. ” No one would develop a drug if you didn’t have a patent,” says Human Genome Sciences CEO William Haseltine (see article: “The Case for Gene Patents,” this issue).

Super Patents

Last April, both the importance and potential dangers of the coming wave of gene patents became clear when the University of Rochester was granted a patent on a gene called Cox-2. University officials immediately filed a lawsuit against G.D. Searle, a subsidiary of Pharmacia, whose blockbuster painkiller Celebrex acts by blocking the enzyme encoded by the Cox-2 gene. Rochester claims Searle’s drug infringes its patent, which describes not just the DNA letters of the gene, but also the general idea of using a drug that blocks Cox-2 as a way to alleviate pain.

The financial stakes are immense. Dubbed “super aspirin,” Cox-2 inhibitors are the hottest new pain drugs. In 1999, its first year on the market, Celebrex logged $1.5 billion in sales and eclipsed Pfizer’s potency miracle Viagra as pharmacies’ fastest-selling pill. (Merck of Whitehouse Station, N.J., also makes a Cox-2 inhibitor called Vioxx but is not named in the suit.) A University of Rochester press release giddily predicted the university’s patent is “likely to be the most lucrative in U.S. history.”

The case highlights several troubling aspects of gene patenting. As a tactic to pressure Searle into paying royalties, Rochester has asked a judge to force the company to take the drug off the market, despite the fact that it is used by nearly seven million people, many of whom suffer from severe arthritis. The case also raises new and difficult questions about what a patentable ” invention” really is. Is it Celebrex, a drug developed by industry at a cost of millions of dollars? Or is it the knowledge of Cox-2’s role in pain and inflammation, a fundamental scientific discovery paid for with federal research monies?

Gerald Dodson, a litigator Rochester has hired from the firm Morrison & Foerster, says, “If you discover something that opens a new area of research, then it should be patentable. That is what’s at the heart of this. Somehow there is a school of thought that different rules should apply to basic research in medicine, and I don’t think that washes under any kind of scrutiny. “

Searle freely admits it used scientific findings about Cox-2 as the starting point for its hunt for a drug. (The Cox-2 discovery has also prompted drug research aimed at treatments for Alzheimer’s disease and cancer.) But Searle lawyers say the Rochester patent is invalid because it doesn’t give precise enough directions for finding a drug. In the parlance of patent law, Rochester’s claim qualifies as a classic “submarine patent”: a broad early claim that quietly sits at the Patent Office only to surface when another inventor’s work gives it commercial significance.

Whether or not the University of Rochester deserves royalties from every Cox-2 inhibitor on the market, the surfacing of more and more genetic submarines could signal a painful future for drug development. All existing drugs on the market act on only about 400 distinct targets in the body; these are the critical enzymes and pathways that can be addressed in treating various diseases. And scientists’ best guess is that there may be only 5,000 “druggable” targets overall. As they reveal these targets, companies and universities are laying claim to what amounts to the ultimate biological monopoly-patents that comprehensively cover not only a gene and the protein it makes, but also any “method of treatment” that specifically targets them. Already, Pfizer has a patent in Europe covering any drug that acts via PDE5, the protein targeted by Viagra.

At Millennium Pharmaceuticals, such “methods of treatment” claims are what Mark Boshar calls the “crux” of his company’s patent strategy. Millennium has dozens of such claims pending at the Patent Office, including several on human obesity genes that could be the basis for a new generation of diet drugs. According to Boshar, these patents are a just reward for innovative research that is uncovering the true molecular causes of disease for the first time. The only type of protection broad enough to protect such a fundamental insight, he says, is one that renders the target “locked up and protected… regardless of the drug that our competitor develops.”

Few patents are likely to be as wide-reaching as the one on the Cox-2 gene. In fact, the majority of gene patents, just like most new golf ball designs (another popular category at the Patent Office), will end up being worth little or nothing. However, the sheer number of pending patents could present its own problems. In a 1998 paper in the journal Science, Rebecca Eisenberg and Michael Heller, a University of Michigan colleague, warned that a proliferation of early-stage intellectual property rights could end up stifling lifesaving innovations. For instance, drug companies might shy away from working in a particular area because it’s strewn with overlapping claims on basic scientific building blocks.

One way around this problem would be for companies to share their patents to make new drugs possible. That’s what’s happened in the computer industry, where PCs make use of hundreds of patents, held by a wide array of different inventors. But Iain Cockburn, an economist at Boston University, says that despite the attractive nature of such sharing, particularly where human health is concerned, it may be hard to achieve in biotech. “The nature of the biotech industry is the potential cause of some problems. There are a lot of small, hungry companies out there whose only asset is intellectual property. It’s less likely that broad cross-licensing agreements can happen. If you have too many people owning small, overlapping slices of the same pie, there could be a breakdown.”

Showdown in Genetown

Most observers concede that both private rights and the public good need to be balanced in some way. The question is how. Will market forces afford a solution, or will the courts and policy-makers be forced to step in, breaking up gene monopolies in the name of society? Many would like to see the market work its wonders. But in the near term, it’s the opinion of Q. Todd Dickinson, director of the Patent Office, that “those who own the genes have a heavy responsibility that they are used for the good of all mankind.”

Service to humanity is a nice idea. But it’s already breaking down in a mounting dispute over genetic testing. Discoveries of the gene mutations that cause inherited diseases or susceptibility to cancer have been among the first practical payoffs of genomics research. But now physicians at academic medical centers around the country are complaining bitterly that stiff fees and onerous licensing terms are prohibiting them from performing diagnostic tests.

For instance, biomedical researchers at the Miami Children’s Hospital in Miami, Fla., helped discover (and then patented) the mutations that cause Canavan disease, an inherited neurological disorder that affects Ashkenazi Jews. The scientific advance allows doctors to test parents who fear they might be carriers of the defect by taking blood samples and checking for specific DNA mutations on chromosome 17, where the Canavan gene is located. The catch? Miami Children’s is charging a $12.50 royalty for every test performed.

Physicians are balking at having to pay to use what they consider to be medical knowledge. The financial restrictions, they argue, hurt their ability to teach, perform research and care for patients. “We would be happy to pay for some kind of test kit that is faster, better, cheaper. But they are trying to control manual testing, which is not appropriate,” says Michael Watson, a professor of pediatrics at Washington University in St. Louis.

The Canavan test is not the only one that’s kept behind a patent wall. Companies with patents on genes that can predict the onset of breast cancer and Alzheimer’s disease have angered physicians by exercising their right to keep commercial testing in-house. Tired of receiving letters bringing news that yet another gene has been patented-and that it’s time to pay up-Watson is among the physicians pushing for strong action. After tipping off the press to the controversy, he helped draft a resolution endorsed by the American College of Medical Genetics that calls for a moratorium on human gene patenting. The resolution is now being considered by the American Medical Association, which has supported gene patents in the past.

With patient groups and physicians rallying against gene patents, the trade group BIO has moved to stem the growing public relations debacle. In an interview, Chuck Ludlam, BIO’s VP of government relations, offered dire warnings. “Any move that compromises issuance of patents on genetic tests could have an impact on drug research. They are not separable. If there is an idea around of changing the law or the licensing on diagnostics, I think that is dangerous and misguided.”

Watson quickly dismisses the argument. “They [the biotech industry] talk about saving the children, but their angst comes primarily from the loss of market valuation. I don’t think that our side has a whole lot of interest [in] coming to an agreement.”

With the rhetoric from both sides heating up, the dispute over diagnostics could be a warning sign that commerce and medicine just can’t get along when it comes to gene patents. Diagnostics “is where the shooting is going to be for the next few years,” says University of Pennsylvania bioethicist David Magnus. “This is the cutting edge of the clash of values between the business world and the scientific and medical worlds.”

My Genes

The concern about who owns commercial rights to our genetic material is manifest high and low. At the highest levels of the National Institutes of Health, deep ambivalence about patenting has shown itself in health officials’ ongoing efforts to convince the Patent Office to make gene patents more difficult to secure. At the National Academy of Sciences, gene patents have been included in a new study, “Intellectual Property in the Knowledge-Based Economy,” that is intended to determine whether the patents help or hinder innovation. And activists associated with the well-known biotech critic Jeremy Rifkin say they are planning a legal challenge to gene patents that they hope to take all the way to the Supreme Court.

That’s in the towers of Washington. In the streets the issue is also heating up. Over seven days last March, Boston played host to both the largest-ever biotech industry conference and the largest gathering of anti-biotech protesters in North America. One genomics company CEO, Jonathan Rothberg of CuraGen in New Haven, Conn., describes taking off his nametag and venturing across the police barriers that separated the industry proceedings from the colorful crowd of protesters. Rothberg says he was troubled by what he heard. “I spent the day with the protesters. I’d say 90 percent were worried about genetically modified food, and 10 percent were worried about people patenting their genes,” says Rothberg. “I watched the genetically-modified food debate tilt in the wrong direction. I look at our own industry and I realize that we are causing undue anxiety.”

Could it be public opinion that ultimately determines whether gene patents actually promote the creation of new medical treatments? “This subject is not going to run away, and at the end of the day the general public is potentially going to get involved in this if they feel the system is being used unfairly,” says Michael Morgan, chief executive of the Wellcome Trust’s Genome Campus in Cambridge, England. “The ownership of ‘my genes’ is an emotive rallying call for all kinds of folks, and we need to be aware of that or we are going to hinder the development of new drugs.”

Although gene patenting has been going on for years, as far as the man and woman on the street are concerned, the debate has just begun. And if it follows the course of other recent biomedical controversies over cloning and stem cell research, it may be one argument that politicians and ordinary citizens will not be content to leave in the hands of scientists, pharmaceutical companies or patent lawyers.

Gene Patent Fever

The number of gene patents granted each year has shot up almost 14-fold since 1990. Data include patents on human, animal, plant and microbial gene sequences.

Top 10 patent holders Incyte Genomics 397 University of California 253 Glaxo SmithKline 248 U.S. Dept. of Health & Human Services 205 Novo Nordisk 196 Genentech 165 Isis Pharmaceuticals 146 Chiron 135 American Home Products 130 Novartis 128

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