Cost curve down?

The U.S. Supreme Court today invalidated a patent that Myriad Genetics had obtained for the BRAC tests. The ACA regulators recently announced in FAQ XII that

Q6: Does the recommendation for genetic counseling and evaluation for routine breast cancer susceptibility gene (BRCA) testing include the BRCA test itself?
Yes. HHS believes that the scope of the recommendation includes both genetic counseling and BRCA testing, if appropriate, for a woman as determined by her health care provider.

The Mayo Clinic explains that

The BRCA gene test is offered only to people who are likely to have an inherited mutation, based on personal or family history, or who have specific types of breast cancer. The BRCA gene test isn’t routinely performed on women at average risk of breast and ovarian cancers.
Having a BRCA gene mutation is uncommon. Inherited BRCA gene mutations are responsible for about 5 percent of breast cancers and about 10 to 15 percent of ovarian cancers.

Nevertheless, Myriad was flying the pirate flag. It refused to license the patents and its rack rate for the test was $4000.  This NY Times op-ed contributor went off on Myriad’s pricing strategy after Angelia Jolie recently popularized the test by announcing her results and her course of treatment.

The Supreme Court decision today is expect to cut the price of the BRAC test to under $1000 in the near future. The FEHBlog listened to a telephone conference about the Supreme Court decision this afternoon in which the speaker advised that the BRAC patents which were issued in the late 1990s would have expired sometime next year in any event. Moreover the Wall Street Journal reports that

Via the story from the WSJ’s Brent Kendall and Jess Bravin:  However, the ruling wasn’t a complete loss for Myriad. The court said that DNA molecules synthesized in a laboratory were eligible for patent protection. Myriad’s shares soared after the court’s ruling. The court adopted the position advanced by the Obama administration, which argued that isolated forms of naturally occurring DNA weren’t patentable, but artificial DNA molecules were. Myriad also has patent claims on artificial genes, known as cDNA.

Similarly the conference call speaker made the same point — the Supreme Court invalidated an old patent and kept the door open for more recent patenting techniques.


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