Diagnostic Kits/Overview of Economics of Intellectual Property in Kits

Where does the literature says IP works and does not work?

When IP doesn't work

Summary of the Risks Associated with Patent Protections of Genetic Testing Data Access

• Searching for genetic patents is difficult. Solutions have arisen in the form of topic specific databases. (Verbeure, et al., 2005)

Bayh-Dole

• The Bayh-Dole Act may not be serving its purpose in the genetic testing context. If genetic research is inhibited by patenting behaviors then the fact that at least one study found “[t]he majority of the patent holders enforcing their patents were universities or research institutes, and more than half of their patents resulted from government-sponsored research” means that the act holds a central role in creating a barrier to access (Cho et al. 2003).

Patent Protection

• The rise of patent protections over genetic testing research may cause labs to decline to develop new tests and stop their current genetic test offerings. (Cho et al. 2003)
• Patenting of genetic testing can “increase the costs of genetic diagnostics, slow the development of new medicines, stifle academic research, and discourage investment in downstream R&D” (Jensen, K. & Murray, F., 2005)
• There is evidence that patents are not necessary for the quick transformation of the genetic markers to a clinical test (Merz, J.F. et al., 2002)

Licensing

• Licensing behavior can have a measurable effect on the development and performance of genetic testing laboratory studies. Many changes in ownership and degree of patent enforcement lead to market confusion, which has a chilling effect on new and current research. (Merz, J.F. et al., 2002) On the other hand, these licensing effects may actually be a decrease in market rather than effects of licensing behavior (Merz, J.F. et al., 2002)

Is there data on "how much of an increase of the tendency towards enclosure or towards openness"

• History of the market (Diagnostic Test Service Commercialization in Multiplex and Esoteric Testing)
  • A trend towards consolidation (all discussed on page 25)
    • "[T]he 1980s and 1990s saw the establishment of some 7000 independent reference labs." page 25
    • "In 2008, there are approximately 3000 small reference labs in the U.S." page 25
    • 1995 Labcorp of America: was formed by the merger of National Health Laboratories and Roche Biomedical Laboratories page 25
    • 1996 3 main players in the market: Labcorp of America, Corning, and SmithKline Beecham (Beckman) page 25
      • 1997 Corning created Quest Diagnostics as an entity to hold their laboratories page 25
      • 1999 Quest Diagnositics purchased the laboratories of SmithKline Beecham page 25
    • Since 1999, LabCorp and Quest have been the two largest independent labs in the U.S.
• The beginning of patenting (Diagnostic Test Service Commercialization in Multiplex and Esoteric Testing)
  • "Myriad Genetics, Athena Laboratories (now part of Thermo Fisher) and Nymox Pharmaceuticals were among the first companies to offer their patented and proprietary assays as a service in their own laboratories." page 26
  • The patenting was controversial: The lack of access was "seen as unethical and preventing widespread access to what were considered important tests. Further, both companies pursued labs that infringed on their patent positions by offering these tests and threatened litigation." page 26
  • The report says that the controvery over these patent protects has diminished since then.

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