Argument: Patents provide incentive for R&D investment in product

Issue Report: Gene patents


Kevin E. Noonen. “Falsehoods, Distortions and Outright Lies in the Gene Patenting Debate”: “The incentive for gene patenting motivated private companies, most notable Celera and Human Genome Sciences, to compete with the federally-funded efforts to sequence the human genome. This competition accelerated these efforts and produced sequence information more rapidly than anyone expected.”

Geoffrey M. Karny. “In Defense of Gene Patenting.” Genetic Engineering and Biotechnology News. April 1, 2007: “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.

[…] In the noise and misinformation about gene patents, basic, common-sense principles are lost. These principles have supported the patent system for over 200 years and have contributed to the technological greatness of this nation and to the benefits that technology brings to humankind. They bear repeating. The inventor brings something new to the world. The patent provides the incentive to bring it to market. And new biomedical and agricultural products improve the human condition.”

Gene Patenting. Debatabase. April 14, 2009: “If companies are not allowed to patent the products of their research, then other companies can exploit their findings to profit themselves. If there are no safe-guards to prevent this, then companies will virtually cease to fund their Research and Development (R&D) departments, and the research into this potentially revolutionary area will end. Banning patents would take away the lucrative incentive to invest in this area, which is what drives on medical research.”

Tim Dean. “Gene patents vital to biotech industry: IPTA.” Life Scientist. May 11, 2009: “If the Federal Government places a ban on the patenting of genes or other biological materials it could result in the collapse of the Australian biotechnology industry, said a panel of experts gathered by the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) in Sydney today.

According to the panel, a ban on gene patenting would bring to a halt a great deal of medical research and would result in a catastrophic withdrawal of investment by the corporate sector.

According to Dr Tania Obranovich, patent attorney and former research scientist, allowing genes to be the subject of patents will not stifle research or prevent beneficial therapies to reach the general public. Allowing biological materials to be protected under patent law will encourage private investment in bringing therapies to market, she said.

Products such as the cervical cancer vaccine, Gardasil, would never have been made available to the public were not its key components – including genes from the human papillomavirus – protected by patent law, said Obranovich.

Dr Trevor Davies, patent attorney and fellow at IPTA, said the submission made to the Senate Inquiry by the Cancer Council Australia that all biological materials should be exempt from patenting could prove devastating to the Australian biotechnology industry, forcing Australian researchers overseas to conduct – and protect – their research.”