News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Congress Passes Law Changing How Medicare Sets Prices for Clinical Laboratory Tests; Lab Industry Groups Differ on Which Labs Will Be Winners and Losers

Leaders from ACLA, AdvaMedDx, CAP, NILA will be at Executive War College on April 29-30 for first medical lab industry debate about the best and worst of the new law

Clinical laboratories will face new financial challenges following passage of a new federal law two weeks ago that makes deep changes in the way Medicare officials will establish prices for the Medicare Part B Clinical Laboratory Fee Schedule (CLFS). Many medical laboratory administrators, hospital lab managers, and pathologists remain unaware of the significant negative financial impact this law will have on their lab’s revenue and fiscal stability.

On April 1, President Barack Obama signed H.R. 4302: Protecting Access to Medicare Act of 2014. The law’s primary purpose is to extend the Sustainable Growth Rate (SGR) formula for 12 months. The House had passed the bill on the previous Thursday and the Senate passed the bill on the following Monday, March 31. (more…)

National Institutes of Health Creates Partnership with Big Pharma to Improve Development Success of New Drugs and Diagnostics and Speed FDA Clearance

Pathology groups and clinical laboratories are among the beneficiaries if the Accelerating Medicines Partnership achieves its goals

Power players in healthcare are about to invest nearly a quarter of a billion dollars to accelerate the time it takes for new medical discoveries to gain regulatory approval and enter clinical use. The emphasis will be on both therapeutic drugs and diagnostics, making this an important development for in vitro diagnostics companies and medical laboratories.

Anchors to this new initiative are the National Institutes of Health (NIH) and the Food and Drug Administration (FDA). Their partners are 10 pharmaceutical companies and six nonprofit groups. The goal is to jumpstart research to find targets for new drugs and diagnostics, noted a Genomeweb.com article. (more…)

Legal Fight over Gene Patents in AMP vs. Myriad Case to Be Subject of Oral Hearings at the Supreme Court, Just Months after Its Ruling in Prometheus Case

Both pathology profession and biotech industry have much at stake in how Supreme Court rules in this important case involving the patentability of genes

Legal challenges to gene patents are a high interest topic among pathologists and clinical laboratory scientists who perform genetic testing. Two high profile cases involving gene patents were accepted by the Supreme Court. A ruling was made in one case and the second case is continuing.

The Supreme Court issued a ruling in one case, titled Mayo Collaborative Services v. Prometheus Laboratories, Inc. (Prometheus). The dispute centered upon Prometheus’ method patents to testing for metabolites of the drug thiopurine in patients with gastrointestinal disease.

In a unanimous opinion, the Supreme Court ruled that these patents were invalid. Some medical laboratory scientists believe that the ruling could ultimately result in the invalidation of the even more significant gene patents, including those gene patents at issue in Association for Molecular Pathology, et al. v. Myriad Genetics (Myriad)..

New Ruling Has Huge Significance for Pathology and Lab Medicine

According to a story in CAP Today, in the Prometheus case, the court reasoned that a process of recognizing and reciting a law of nature is not patentable because laws of nature are not patentable.

Gene Patents by psmag.com

This summer, the Supreme Court will hear oral arguments in the case of Association of Molecular Pathology vs. Myriad Genetics. At issue is the patentability of genes. In March, the Supreme Court ruled unanimously against Prometheus in another case involving gene patents. (Image by PSmag.com)

“We have the first clear statement by the Supreme Court—and by a unanimous Supreme Court—that laboratory testing really amounts to nothing more than an observation about the correlation between an analyte and a particular medical condition is not patentable,” stated Jack Bierig, JD, Partner with Sidley Austin in Chicago, in the CAP Today article.

Bierig observed that the key question presented by Prometheus is where to draw the line between a law of nature and an application of the law. “There is a well-known distinction between laws of nature—which are not patentable; and applications of laws of nature—which are patentable,” he stated. “This is the first Supreme Court case that has addressed that question in the context of laboratory testing.”

The ruling overturned the U.S. Court of Appeals for the Federal Circuit (CAFC) decision which upheld the Prometheus patents.

Prometheus Decision May Render Myriad Gene Patent Claims Invalid

Important questions still remain about the patentability of genes. Just six days following the March 20, 2012, ruling in Prometheus, the Court remanded Myriad to the CAFC for reconsideration under the new ruling. In 2011, the CAFC found in favor of Myriad.

The Myriad case originated in 2009 when several plaintiffs, including the American Civil Liberties Union, filed a lawsuit challenging seven of Myriad Genetics’ (NASDAQ: MYGN) patents on the BRCA1 and BRCA2 genes and methods for interrogating the genes.

The question of gene patentability is of critical importance to pathologists, according to Roger D. Klein, M.D., J.D., a molecular pathologist and Chair of the Professional Relations Committee of the Association for Molecular Pathology (AMP). Klein observed in CAP Today that enforcement of gene patents in Myriad has interfered with pathologists’ ability to provide comprehensive interpretations involving multiple diagnostic test procedures. He asserted that the patents have also prevented pathologists from implementing cost-saving algorithms that reduce unnecessary testing.

“It’s the gene patents that are so universal,” agreed Wayne W. Grody, M.D., Ph.D., Professor of Pathology and Laboratory Medicine, Pediatrics, and Human Genetics at the University of California School of Medicine. “We really care much more about the impact of this case on Myriad and other cases that may come later,” stated Grody, who is also President of the American College of Medical Genetics and Genomics.

Biotechnology in a “Minor Panic” Following Prometheus Ruling

According to a story in The Economist, the biotechnology industry is in a “minor panic” at the implications of the high court’s unexpected ruling in Prometheus.

Klein rejects the biotechnology industry’s argument that patent invalidation will jeopardize the advancement of personalized medicine. “I think it will produce tremendous advancement and accelerate progress,” he stated.

John H. Noseworthy, M.D., President and Chief Executive Officer of Mayo Clinic, agreed. “[The new ruling] will favorably impact patient care because it provides broad access to good-quality bedside testing,” he stated in a story published by The Wall Street Journal.

At this point, oral arguments in the Myriad case are scheduled for this summer. In reconsidering the Myriad case, the CAFC may reverse its previous ruling upholding the BRCA gene patents, Bierig speculated. Or, the case may end up in the Supreme Court for final determination.

“I think there’s a chance that the Supreme Court could now rule that the product of the genome is basically a natural phenomenon,” observed Bierig. Klein agreed, suggesting that the Prometheus decision probably renders the Myriad patent claims invalid.

Pathologists and clinical laboratory managers will want to continue to follow the surprising developments in these clinically-relevant patent cases. The Prometheus decision sent a clear message that the Supremes are positioned on the side of the “medical” rather than “commercial” ethic in the area of genetic patents.

For its part, the biotechnology industry may ultimately have to resort to seeking relief through congressional revision of patent law as it pertains to genes. Of course, it can be expected that the clinical laboratory testing profession would be actively educating Congressman should there be consideration of such legislation.

—Pamela Scherer McLeod

Related Information:

For background on the patent cases:

Decisions in Prometheus, Myriad, and Classen Cases Help Clarify Patent Eligibility Requirements for Genetic Lab Tests and Molecular Diagnostics

By Zeus! Prometheus ruling checks patents

Prometheus unsound: America’s Supreme Court wallops the biotech industry

Top Court’s Patent Rejection Alarms the Biotech Industry

IBM Watson Picks Advisory Board—but No Pathologist

Clinical laboratory managers and pathologists have an opportunity to expand the presence of laboratory medicine

IBM (NYSE: IBM) recently issued a press release announcing its new Watson Healthcare Advisory Board (WHAB). The board is comprised of healthcare leaders with a broad range of research, medical and business expertise. Unfortunately, that expertise does not include pathology or specialists in laboratory medicine.

Watson represents a technology breakthrough that can help physicians improve patient outcomes,” said Herbert Chase, M.D., Professor of Clinical Medicine (in Biomedical Informatics) at Columbia University, in a recent IBM press release. “As IBM focuses its efforts on key areas including oncology, cardiology and other chronic diseases, the advisory board will be integral to helping align the business strategy to the specific needs of the industry.”
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Pathology and Clinical Laboratory Groups Voice Concerns about Two Proposed Genetic Test Registries

Separate genetic and molecular test registries proposed by the National Institutes of Health and by Palmetto GBA draw detailed public comments from medical lab groups

Registries for genetic tests and molecular diagnostic assays don’t seem to be going over well with clinical laboratories and pathology groups. Two different genetic test registries are drawing criticisms from pathologists and laboratory medicine professionals.

One molecular test registry was proposed last year by the National Institutes of Health (NIH). For different purposes, this fall, Palmetto GBA, the Medicare Carrier based in Columbia, South Carolina, proposed a molecular test registry that would be used by laboratories billing for molecular testing services provided in the Medicare J1 region, which includes California, Hawaii, and Nevada.

This second registry is part of what Palmetto GBA has named the “Molecular Diagnostic Program” (MolDx). Palmetto expects this registry will help resolve problems created by code stacking claims for genetic and molecular tests. (See Dark DailyPalmetto GBA Execs Explain MolDx, Its New “Molecular Diagnostic Services” Program for Clinical Pathology Laboratories,” November 15, 2011.) The MolDx program has already attracted public comments, both positive and negative.
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