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Supreme Court May Be Partly to Blame for Shortage of At-Home Rapid COVID-19 Tests During Pandemic

High court decision in 2012 altered patent law and effectively blocked protections for certain clinical laboratory diagnostic tests and procedures

Clinical laboratory leaders and pathologists will be interested to learn that a US Supreme Court (SCOTUS) decision from 2012 may be partly to blame for the shortage of at-home COVID-19 rapid antigen tests while the SARS-CoV-2 Omicron variant surged this past winter.

During that time, consumer demand for all COVID-19 at-home tests quickly depleted the already dwindling supply. However, the 2012 SCOTUS ruling in Mayo Collaborative Services v. Prometheus—which rewrote patent law in the biotech industry—effectively blocked patent protections for many medical laboratory diagnostic tests and procedures, wrote Paul R. Michel in a column he penned for STAT.

Michel served on the United States Court of Appeals for the Federal Circuit from 1988 to his retirement in 2010, and formerly was its chief judge from 2004 to 2010.

Shortage of COVID-19 Home Tests Due to ‘Tsunami of Demand’

The diagnostic test shortage that continued throughout the second year of the pandemic has been blamed on a “tsunami of demand,” as vaccine and testing mandates went into effect, according to CNBC. Other causes of the shortages were linked to shortages of raw materials and the US Food and Drug Administration’s slow review process, The Wall Street Journal reported.

However, as Michel noted in STAT, Mayo v. Prometheus “was a legal bombshell that upended the prior law on patent eligibility. And it has had disastrous real-world consequences for Americans.”

San Diego-based Prometheus Laboratories had developed a diagnostic test that measured how well patients metabolized medicines to treat autoimmune diseases. When Mayo Collective Services, which does business as Mayo Clinic Laboratories, developed its own test based on the Prometheus design, Prometheus sued for patent infringement. But it lost when the case reached the Supreme Court.

Michel points out that developing new clinical laboratory diagnostic tests and methods is “slow and expensive” work that becomes financially unsustainable for biotech companies when patent protections are removed.

In the “wake of the Mayo decision,” he wrote, many small biotech companies that had been focused on developing new diagnostics went out of business. Simultaneously, some major research centers, such as the Cleveland Clinic, ended programs aimed at discovering new diagnostic methods.

Financial Repercussions of the SCOTUS Ruling

“In essence, in the four years following Mayo, investment in disease diagnostic technologies was nearly $9.3 billion dollars lower than it would have been absent Mayo,” wrote A. Sasha Hoyt, in her analysis of financial repercussions caused by the loss of venture capital investment in new medical laboratory diagnostics. Hoyt is an incoming associate and judicial extern at Finnegan, Henderson, Farabow, Garrett and Dunner, LLP in Washington DC.

“However,” she added, “it is important to note that the yearly investment totals for disease diagnostic technologies have generally increased in the years following Mayo—but it has increased at a lower rate compared to all other industries.”

Shahrokh Falati, PhD, JD, director of the Patent Law Clinic at New York Law School, maintains that the Supreme Court-created exceptions to existing patent law have damaged America’s standing as a leader in new technology development and commercialization.

“The US Supreme Court effectively redefined the scope of patent eligible subject matter when it decided Mayo. This decision focused on medical diagnostic technology and has had a profound effect on the biotechnology and personalized medicine industries in the United States …,” he wrote in the North Carolina Journal of Law and Technology.

Shahrokh Falati, PhD, JD
“[The Supreme Court’s ruling] has caused havoc in the biopharmaceutical industry by not only making it a near impossibility to obtain a patent in certain fields, but also by vastly increasing the number of medical diagnostic patents being invalidated based on Section 101 of Title 35 of the US Code,” said Shahrokh Falati, PhD, JD (above), director of the Patent Law Clinic at New York Law School, in an article he wrote for the North Carolina Journal of Law and Technology. Funding for clinical laboratory diagnostics development also has curtailed since the SCOTUS ruling. (Photo copyright: Albany Law School.)

Precision Medicine at Risk without Intellectual Property Protection

Elizabeth O’Day, PhD, CEO and founder of Olaris, Inc., a precision medicine company, has advocated for reform of Section 101. In an Olaris blog post, she argues that reform should provide intellectual property protection for therapeutic companies that develop biomarkers and algorithms used in precision medicine.

“We have the omic technologies (genomic, proteomic, metabolomic, etc.) and analytical tools needed to uncover biomarkers that could dramatically enhance our ability to detect and treat disease,” O’Day wrote. “Let’s reform Section 101 so that these breakthrough products have the opportunity to reach the people that need them.”

In, “CMS Cuts BRCA Price by 49% in Response to Competition,” Dark Daily’s sister publication, The Dark Report, highlighted the negative consequences the Mayo decision had on the clinical laboratory diagnostic testing industry.

US Senators Urge Patent Reform

While Congress has not yet stepped in to restore patent protections for diagnostics companies, key senators have been working toward that goal. Last year, US Senators Christopher Coons, Tom Cotton, Thom Tillis, and Mazie Hirono sent a letter to Drew Hirshfeld, director of the United States Patent and Trademark Office, urging him to support patent reform, which has yet to pass Congress despite Senate hearings and draft legislation.

“It is past time that Congress act to address this issue,” they wrote. “To assist us as we consider what legislative action should be taken to reform our eligibility laws, we ask that you publish a request for information on the current state of patent eligibility jurisprudence in the United States, evaluate the responses, and provide us with a detailed summary of your findings.” That letter went to Hirshfeld on March 5, 2021, with a request for findings no later than March 5, 2022.

For now, patent reform appears to be locked in uncertainty, which means SCOTUS’ decision that altered patent law affecting the biotech industry may continue to hamper development of new diagnostic tests as well as the current supply of at-home COVID-19 tests. Clinical laboratory leaders involved with diagnostic test developers will want to closely monitor for any changes to the Supreme Court’s ruling.

Andrea Downing Peck

Related Information:

The Supreme Court Is Partly to Blame for the COVID-19 Test Kit Shortage

COVID-19 Rapid Test Shortages Seen Compounded by Slow Federal Action

Senate Judiciary Committee Subcommittee on Intellectual Property Letter to Director of United States Patent and Trademark Office

Why Pharma, Private Equity Want to Reshape Lab Industry

Drugstores Struggle to Keep COVID At-Home Tests in Stock as Omicron Rages Across US

Mayo Collaborative Services, DBA, Mayo Medical Laboratories, et al. v. Prometheus Laboratories, Inc.

Patent Eligibility of Disease Diagnosis

CMS Cuts BRCA Price by 49% in Response to Competition

US Senators Letter to Commissioner of Patents