I recently blogged on the topic of gene patents in light of news publicising Angelina Jolie’s pre-emptive actions in dealing with her increased risks of developing breast and ovarian cancers.  The point in writing the article was that, in my view, gene patents are not as ‘evil’ as the public perceives them to be.  Rather, they are a necessity in bringing life-saving drugs and diagnostic tests from the lab bench to the marketplace.

I also made the point that more could be done by the Government and global patent profession to effectively communicate to the public the benefits of protecting and leveraging intellectual property to bring life-saving technologies to market.  Perhaps then, it was to my disappointment that a report entitled ‘Economic Analysis of the Impact of Isolated Human Gene Patents’ was quietly published by IP Australia and has so far gone unnoticed by mainstream media in Australia.

Economic Analysis of the Impact of Isolated Human Gene Patents

The report [PDF, 1.83MB], produced by The Centre for International Economics (CIE) for IP Australia, focusses on patents for isolated human gene sequences that include at least one claim to an isolated human gene sequence or a portion thereof.  It appears that CIE conducted extensive research of the Australian Patent Register, in addition to interviewing stakeholders (both public and private), to produce the report.

The report confirms the view that patents, generally, are an important tool for incentivising innovation, recouping costs and offsetting risks associated with commercialisation.

Other points of summary are:

  • Isolated human gene patents play less of a role in this incentive now than they have in the past, with the number of patents granted for isolated human gene sequences declining dramatically since the completion of the Human Genome Project in 2003.
  • Patenting activity is increasingly focused on methods of using isolated gene sequences and on modified (i.e. not naturally occurring) DNA and genetic sequences created in laboratories.
  • Approximately $795m was invested in gene technologies related to human health in Australia during 2011-12 – 79% being derived from public funding and 21% from private. Isolated human gene sequences are part of that investment, but it is not possible to isolate the precise share.
  • Measurable economic impacts associated with isolated human gene sequence patents are small in terms of royalty and fee income attributable to the patent. An estimated total of $1.1m to $2.6m per annum is earned by publicly funded research institutions.
  • Costs often cited as caused by isolated human gene patents, e.g. price of gene diagnostic tests or the inability to improve on diagnostics, do not appear to be the result of the patent itself, but rather issues over exclusive licensing, complexity of the technology or business relations.

Importantly, the report also emphasises the facts that, in Australia:

  • the medicines industry is the second highest manufacturing industry investor in R&D (spending almost $1 billion in 2011), and
  • in 2011-12, the pharmaceutical sector was one of Australia’s largest contributors of manufactured exports, with medicinal and pharmaceutical product exports totalling over $4 billion.

The Australian pharmaceutical industry has expanded, and continues to expand, rapidly.  The report points to biologics being a key area of growth, which is not surprising given that patents covering some of the world’s largest blockbuster drugs have expired, or will soon expire (see here or here for example).  Biologics, such as a vaccines, blood or blood components, living cells, tissue or recombinant proteins, are derived using DNA-based technology from a variety of living organisms including humans.

‘If it aint broke…’

As I concluded in my previous post, greater emphasis needs to be placed on alternative mechanisms for providing accessible healthcare which don’t involve ‘fixing’ an allegedly ‘broken’ patent system.

With respect to the evolution and growth of the Australian pharmaceutical industry, the above report suggests that patents for isolated human genes per se are of decreasing significance, while those covering inventions such as biologics are of increasing significance. One can conclude from this that patents covering human-derived genes will continue to play a crucial role in commercialising pharmaceutical inventions.

I strongly believe that the ‘fixes’ proposed for the patent system by those opposed to the patenting of genes will compound the misery resulting from a decreased accessibility to drugs and healthcare solutions by stripping both academia and industry of incentive to innovate and collaborate to bring new life-saving technologies, particularly biologics, to market.