The ruling that natural human genes cannot be patented was one of the biggest biotechnology stories of 2013, and the effects of that Supreme Court decision are already threatening defendant Myriad Genetics.
The Salt Lake City-based molecular-diagnostics company lost the ability to patent DNA sequences of genes known as BRCA1 and BRCA2, which are associated with the risk of developing breast and ovarian cancers (see “U.S. Supreme Court Says ‘Natural’ Human Genes May Not Be Patented”). Hours after that decision was announced, other molecular-diagnostics companies announced that they would offer similar tests at a lower cost than Myriad’s test.
And now, the federal government’s Centers for Medicare and Medicaid Services, or CMS, is proposing to lower the amount of money it pays for the tests. The new rate is approximately half of what the agency has previously reimbursed, according to GenomeWeb. The announcement was followed by analyst downgrades on Myriad stock.
CMS directly points to the Supreme Court decision in its announcement and notes that labs charge anywhere from $900 to $2,900 for the test. The new proposed reimbursement amount is $1,438. The proposal is likely to lead to lower costs for BRCA testing even when private insurance companies are paying for it, as these companies usually base their rates on those of Medicare, according to the Wall Street Journal.
Myriad is likely to be hardest hit by such price drops because 85 percent of the company’s revenue comes from BRCA testing, says the WSJ.
Is this a good deal for patients? With cheaper options available, it’s reasonable to think that more patients will have access to this testing. But as Robert Nussbaum wrote for MIT Technology Review, Myriad still has an “unparalleled record of the natural variation in these important genes.” Myriad’s competitors may offer more affordable tests, but they don’t have access Myriad’s private database linking DNA variations to disease outcomes, a wealth of information the company built up over the years when it monopolized BRCA testing. That’s why Nussbaum and colleagues are asking doctors to contribute such vital data for a free, public database that would help doctors interpret the potential effects of a patient’s BRCA sequences on their cancer risks.