It’s not about information; it’s about selling information

Sequenom ISPD tote bagYesterday, the United States Supreme Court ruled that genes cannot be patented. This may not stop competing NIPS labs from trying to enjoin their competitors. But, the ruling reveals a point that gets lost in the celebration of genomics.

This is the tenth anniversary of the mapping of the human genome. The Smithsonian Institution opens an exhibit today to commemorate this milestone. The Human Genome Project began with promises of significant advances in health care based on personalized medicine. And then the law got in the way.

Recently, Angelina Jolie made news with her prophylactic double mastectomy after finding out she had the BRCA1 gene. BRCA1 and BRCA2 increase the likelihood of breast and ovarian cancer; testing for these genes is a clear example of personalized medicine. A couple has  gone so far as to go through IVF and pre-implantation genetic diagnosis to select embryos that did not have the BRCA1 gene because the mother’s side had a history of early, aggressive breast cancer. But, then the laboratory Myriad patented BRCA1 and BRCA2.

By patenting, Myriad held a monopoly over the testing of those genes. If others sought to introduce competing genetic tests, Myriad sought to enforce its patent. And, that led to yesterday’s Supreme Court decision.

In a unanimous decision written by Justice Thomas, the Court ruled that genes are not patentable. Genes are a product of nature, naturally occurring and able to be found in nature, and as such, genes do not qualify to be patented.

The ruling was hailed by competitors and critics of Myriad. With Myriad no longer having a patent on the genes themselves, other companies can now market their own BRCA1/BRCA2 tests. With competition, the price of testing will go down, making health decisions like Angelina Jolie’s not limited to the rich and famous, but affordable for more women.

And, that’s the larger point about genomic medicine and yesterday’s court decision.

Non Invasive Prenatal Screening NIPS BrandsAll of the laboratories offering Non-Invasive Prenatal Screening (NIPS)–Sequenom, Ariosa, Verinata, and Natera–do so on the basis that they are providing information. As Sequenom’s tag line emphasizes, MaterniT21 is “Clear. Convenient. Compelling.” But these labs are not just providing information to expectant mothers.

Like Myriad’s competitors, Sequenom, Ariosa, Verinata, and Natera have all engaged in a costly litigation battle. Each is arguing over whether their testing method was infringed by their competitors.

When Sequenom launched, being the first to market, it aggressively pursued litigation against its competitors, with the other labs responding in kind. It made for a very awkward situation at the International Society for Prenatal Diagnosis (ISPD) annual meeting in June 2012. Representatives from Sequenom, Ariosa, and Verinata all shared a breakout session where they presented research on their respective style of NIPS testing. Attendees commented on the “snippiness” in presenters pointedly drawing contrasts on how their testing was better than another company’s.

ISPD 2012 reception SequenomAll of these companies paid a good sum of money to erect impressive exhibit booths in the exhibitors hall. Sequenom sponsored the opening evening reception, where, being in Miami, there was delicious Cuban food and a fine band to entertain attendees. The photo above is of the conference bag each attendee received. On one side was the logo for ISPD, and on the other was Sequenom’s advertising for MaterniT21. All of the cocktail napkins at the reception had the same MaterniT21 logo and tag line as well.

And this is the point about yesterday’s Supreme Court ruling. The ruling on genes not being patentable probably will not impact the legal claims of the various NIPS labs, since they are suing based on the testing method for identifying the cell-free DNA, and not patenting the cell-free DNA itself. But the effort to prevent competitors from bringing to market competing tests offering BRCA1 and BRCA2 testing, in the case of Myriad, or the effort among Sequenom, Verinata, Natera, and Ariosa from stopping one another from offering their tests reveals that genomic medicine and personalized medicine is not about information. It is about selling information.

If NIPS laboratories were simply about providing information, then, logically, the more information the better. If Sequenom’s MaterniT21 provides “Clear. Convenient. Compelling.” information, then so, too, does Ariosa’s Harmony test, or Verinata’s verifi, or Natera’s Panorama. Of course, that is not exactly the case.

While each laboratory certainly wants expectant mothers to be “verifi”-ied, or find Harmony, or enjoy the Panorama of the pregnancy experience, the laboratories more particularly want expectant mothers to have their testing, and not their competitors. And, that is why the lawsuits were filed: not to spread information, but to make a single point of information so that one lab could set the cost if someone wanted an NIPS test.

This is not meant as a critique, but rather a simple, but key, observation. Research and development have high costs. Patents provide a profit incentive to sink substantial costs in early losses in order to obtain a patent and be the sole provider based on that development. Indeed, this was Myriad’s policy argument for enforcing its patents on BRCA1 and BRCA2, and remains its critique of the Supreme Court’s decision: that it will be a disincentive to medical research.

But, the profit motive needs to be kept in mind about these developments.

Medical guidelines justify NIPS for providing information so women can exercise their reproductive autonomy. But those offering NIPS are not doing so just to provide information. They are offering NIPS because they want to sell their brand of NIPS to providers–hence the tote bags, receptions, and lavish exhibits–and they want expectant mothers to want their brand of testing, not a competitor’s test, which could bring the cost down.

This point should be kept in mind when considering materials provided to an expectant mother from testing companies–this is not just information being given to you; they want to sell you their information.


  1. I was thinking through the implications of that ruling in regard to NIPS as well, Mark. Thanks for addressing it.

  2. And we all now what that path leads to.

  3. Thank you for stating this so clearly. There is a lot of profit to be made from creating ‘fear’ of Down’s syndrome and therefore a lack of media counteracting this. No different in the marketing methods of promoting artificial milk over breastmilk and the current war between Danone and Nestle in the U.K. A society where money is God. Disturbing times and a lot of work to be done to expose the truth.


    Compelling insights, but they ignore the obvious. Even though these tests are not yet considered accurate enough to be “diagnostic”, there is little doubt that when 97% of the high risk population that achieves a negative result, they have no reason to pursue invasive testing. Using typical miscarriage outcome rates of .5%, that means that over 3,600 babies lives will be saved each year. Clearly this “data” is important. And prior to Dr Lo and Sequenom, no one knew it was available nor how to retrieve it.

    Sequenom has a retained deficit of $1 billion. In essence they have spent $1 billion more than they have generated in revenues pursuing genetic sequencing capabilities. Everyone, including Judge Illston, agrees that the work done by Dr Lo and then by Sequenom was ground-breaking for prenatal care. Verinata is in a similar position as they also spent significantly for research and eventually royalties to Dr Quake for his discoveries. We don’t know their losses, but they are likely quite large as well.

    Ariosa is a different animal. They come in late. Did much less research. Came up with a simpler test that doesn’t test the whole genome, which is somewhat less comprehensive. They ignore the need for genetic counseling. They ignore various advisory comments that state this should be restricted to high risk until further clinical evidence is available. They cut the test price dramatically to create a low cost version. Now the court blesses them and creates a long term dilemma.

    How long do you think these companies will commit significant spending to pursue new molecular diagnostics if they have little hope of getting a return on that investment? How long will investors fund this research if this becomes the norm relegating these investments the equivalent of charitable contributions?

    Yes you can call this a process of finding information (CfDNA) that is in the mother’s blood and selling it back to the individual. How is that different that many other consumption pricing models? Isn’t digitizing pictures and sound into binary code just information? How about X Rays or MRI’s. They are clearly just information that is being processed and sold back to the individual. Yet the individuals that created the MRI would have no incentive to pursue it if society decided that anyone else to copy it and sell it at a lesser price because it was not worthy of protection.

    Seems pretty clear how much value society is placing on saving 3,600 lives a year. And if you think I’m an outlyer, do a little research into the number of companies who have already laid off employees do to the CMS CPT code debacle. Check into how many companies are cutting 2014 research budgets in selected areas that may not be patentable according to the Myriad ruling. Watch to see how much Venture capital goes into molecular diagnostic companies that are pursuing unique approaches in areas that are gray with respect to IP.

    • Thank you for your comprehensive comment. Regarding your first point, I made much the same argument concerning invasive testing at this blog post. I would be interested in a reference showing that Sequenom has a deficit of $1 billion based on research into NIPS. Regarding what is valued, it remains concerning that the NIPS labs do not invest the relative scintella in cost to provide the recommended materials with each positive test result, as identified in the ACMG position statement, given that they are in the best position to provide this information with the delivery of each positive test result.

      • MARTY CHILBERG says:

        Thanks for the reply. With respect to your Mar blog, I appreciate the perspective. Also interesting to note that the future of NIPS is very likely NIPT given numerous references to the reasons false positives exist. The approach taken by Sequenom and Illumina (Verifi) are both much more comprehensive and evolving to provide more and more diagnostic value, which will eventually likely not only replace invasive procedures, but also lead to In-Utero treatment capabilities. Dr Cantor discussed it at the end of this podcast.

        The $1B in accumulated losses represent the retained deficit of Sequenom today It is not solely NIPS as they are also investing in numerous other diagnostic areas and mass spectrometry. The later is a separate business segment called bioscience by the company and it has been profitable from 2009 to present but this goes back to the early days of sequencing research so I suspect there are still cumulative losses. The primary issue I was addressing was the relative undervaluation of molecular diagnostics today. Another interesting podcast with Jim Greenwood of BIO touches on this subject.

        Your comment about proving materials to accompany positive test results is very accurate, yet I’m not sure that issue is owned by the lab. The need is acute which is why the MFM and genetic counselor should be intimately involved in this process and provide this material and knowledge transfer to the patient. I’m not sure either of these professionals who have the ultimate relationship with the mother to be want to be usurped by a lab. They should however require genetic counseling to accompany the test results in any positive test result.

        That issue though is very real and why I am so livid at prenatal diagnostic companies that are ignoring guidelines relative to high risk and genetic counseling in their pursuit for incremental market share.


  1. […] The ruling means several things for the new age of prenatal testing. It means that competitors will be able to offer their brand of NIPS testing without threat of an injunction for violating Sequenom’s patent (provided Judge Illston’s order is upheld on appeal). But it also means that for all of its touting, NIPS is not as ground-breaking as the labs and media reports would have the public believe, at least not in the context of being so innovative that it can be patentable. And, finally, the admission of Sequenom’s management confirms, yet again, that NIPS is not about information; it’s about selling information. […]

  2. […] any material from the testing laboratories that it’s not about information, it’s about selling information and getting more women to buy their brand of […]

  3. […] these results would seem very embarrassing for Sequenom, Illumina, and LabCorp. Sequenom’s tag line for MaterniT21 is that its results are “Clear. Convenient. Compelling.” It highlights […]

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