The Myriad Decision Is Huge Because Genetic Medicine Is About to Explode

You can't patent nature, that's clear in our patent law. Even when the bit of nature is so small and hard to extract that it took an enormous bout of scientific engineering to get at. Even when that bit of nature is extremely valuable.

That's more or less what was decided Thursday at the Supreme Court in the Myriad v. Association for Molecular Pathology case. "The location and order of the nucleotides existed in nature before Myriad found them. Nor did Myriad create or alter the genetic structure of DNA," Justice Clarence Thomas wrote in the unanimous majority opinion.

Myriad, the company that is now in the public's consciousness thanks to Angelina Jolie's brave op-ed in The New York Times on being a carrier for a deviant version of the BRCA gene that signals breast cancer for 60 percent of the women who carry it. The BRCA gene, until Thursday, was claimed as a patent by Myriad genetics. No, the company didn't just claim the diagnostic tests as a patent, which the Court affirmed in the opinion; it claimed a patent on the genes themselves.

Those who argued against Myriad said patenting a gene is like going to the library, picking up Moby Dick (which is in the public domain), tearing out a page, and then copyrighting it. What the Court leaves them with is the right to patent the tool for tearing out the page, but not the page itself. Myriad argued that, as a business, it had the right to protect its intellectual property. And no wonder: The genetic diagnostic industry is on the verge of great growth.

Last year, Battelle, a research consulting firm, released a study on the economic output of the genetic-testing industry. (Note: The study was commissioned by American Clinical Laboratory Association, which has an obvious interest in the growth of itself). According to Battelle, it's already a $5.89 billion industry, and that's sure to get much bigger. A United Health Care report last year found national spending on genetic testing to be $5 billion. It projects those costs to increase to $25 billion by 2021 (which, for a point of comparison, is equal to the amount of insured losses from Hurricane Sandy).

"Senior people at the FDA recently said that over 30 percent of their new drugs going through the approval process right now have companion diagnostics going through the approval process with them," Simon Tripp, a senior director at Battelle, tells me. "It used to be that drugs are a one size fits all. But right now, the drugs being developed that are coming through the pipeline, a very large component of them are coming through with genetic and genomic data attached to them."

From the Battelle report:

Myriad will probably stand to do well in the post-decision environment (in the immediate aftermath, their stock actually rose). It may just have to share a bit more.