Dr. Rachel Myerowitz was working as a postdoctoral fellow at the NIH under Dr. Elizabeth F. Neufeld when she decided to clone the defective Tay-Sachs gene. She had previously done her biochemistry thesis at the University of Michigan on GM1 gangliosidosis, another rare lysosomal disorder. When she began in Dr. Neufeld’s lab, she worked on Hurler syndrome, another lysosomal disorder caused by defective iduronidase enzyme,9
and decided that she wanted to clone the iduronidase gene. However, material from Tay-Sachs patients was easier to obtain, so she switched to cloning the genes for hexosaminidase (Personal communication with Dr. Rachel Myerowitz, Professor, Department of Biology, St. Mary’s College of Maryland). Dr. Myerowitz isolated a cDNA clone of the HEXA
gene in 1983 and published these results in 1984.10
In 1984, Dr. Neufeld, moved from NIH to UCLA. Dr. Myerowitz remained at the NIH and looked for mutations in the HEXA
gene that were present in the Ashkenazi Jewish population.
Patenting the gene had never occurred to her, but, as she put it, “… in the late 1980’s, NIH was very interested in patenting stuff. They would come around to your lab and say, ‘Do you have anything that you think is patentable?’” (Personal communication with Dr. Rachel Myerowitz). Myerowitz was approached by a lawyer from NIH who advised her to file a patent application. NIH filed a patent application in 1986 and was granted two patents: the first, US 5,217,865 “Screening for Tay-Sachs disease with cloned DNA for beta-hexosaminidase,” issued in 1993, which covers diagnostic testing; and the second, US 5,475,095 “Nucleic acid compositions for the alpha chain of beta-hexosaminidase,” issued in 1995, which covers the HEXA gene itself. US patent 5,217,865 has a filing date of 10/31/88 and US 5,475,095 has a filing date of 12/7/93; however, both stemmed from one original application 889,502, filed 7/5/86. During the patent prosecution process, the original application’s claims were split into two separate patents.
Myerowitz left the NIH in 1993 for a position at St. Mary’s College of Maryland. In 2000, she contacted the NIH legal department to ask about developments with the patents. The legal department told her that although they knew the DNA test based on the patents was widely used, they had never drafted a license because going after infringers was “more trouble than it [was] worth” (Personal communication with Dr. Rachel Myerowitz). Thus, although the Tay-Sachs gene was patented, the patents were never licensed, and never enforced.
The gene for Canavan disease, called ASPA
, was discovered and patented by Dr. Reuben Matalon and co-inventors. Dr. Matalon is now at the University of Texas Medical Branch (UTMB) Center for Metabolic Diseases; at the time the gene was discovered and patented, Matalon was affiliated with Miami Children’s Hospital (MCH). Matalon had been recruited in May 1987 to search for the cause of Canavan disease while he was a professor at the University of Illinois at Chicago, by Daniel and Deborah Greenberg, a Chicago-based family that had two children, Jonathan and Amy, born with Canavan disease.11
By 1988, Matalon had discovered and published an article in the American Journal of Medical Genetics
about the aspartoacylase deficiency that causes Canavan disease.12
In 1989, Matalon took a position as director of research at the MCH.11
In 1990, Matalon published a paper in the Journal of Inherited Metabolic Diseases
detailing a prenatal enzymatic screening test that could diagnose Canavan disease using amniocytes (cells taken from the amniotic fluid of a gestating pregnancy) or chorionic villus sampling (CVS; cells taken from the placenta).13
However, the enzymatic testing method proved to be unreliable: it resulted in the births of four babies with Canavan disease, who had been prenatally screened and pronounced free of the disease.14
At least two lawsuits against MCH resulted, which were settled out of court.11
It was later determined that Matalon’s enzymatic test did not work because the amniocytes and CVS did not have enough enzymatic activity to provide an accurate screen.15
Matalon’s enzymatic test also could not distinguish adult Canavan carriers from non-carriers.16
Matalon did not receive a patent on this test. In 1993, Bennett et al. published results that suggested that prenatal diagnosis using an enzyme assay of amniotic fluid (rather than amniocytes or CVS) provided more reliable results.17
However, complications with the amniotic fluid assay were reported: it was only reliable at the extremes, and mid-range levels of enzyme activity were inconclusive.18
According to the National Tay-Sachs and Allied Diseases Association (NTSAD), only two or three laboratories in the US offer that test.19
One study recommended that DNA sequencing should accompany amniotic fluid screening wherever possible.18
The Bennett et al. test was not patented (Personal communication with Dr. Michael J. Bennett, Professor of Pathology and Laboratory Medicine, University of Pennsylvania). Unlike Tay-Sachs disease, then, the only way to provide carrier screening for Canavan disease was through DNA-based testing, and DNA-based prenatal diagnosis would be an easier and more reliable method than amniotic fluid analysis.
On October 1, 1993, Matalon and his researchers published exciting results in Nature Genetics
: they isolated and sequenced the aspartoacylase gene, and found a common mutation that causes Canavan disease.20
This made a DNA-based Canavan test possible, and the Ashkenazi population leapt into action. Rabbi Josef Ekstein, who had spearheaded the Dor Yeshorim Tay-Sachs screening campaign in the 1980’s, screened approximately 13,000 people that year for Canavan disease, and in 1996 the Canavan Foundation offered free testing at New York’s Mount Sinai Hospital.11
Matalon filed a patent application on September 29, 1993, and was granted two US patents, US 5,679,635 in October 1997, and US 7,217,547 in May 2007, both entitled “Aspartoacylase gene, protein, and methods of screening for mutations associated with Canavan disease.” US 5679635 has a filing date of September 9, 1994 and US 7217547 has a filing date of October 1, 2001. However, both patents’ Parent Case Text show that they stemmed from the same application 08/128,020, filed September 29, 1993. The patent granted in 1997 covered the DNA sequence of the gene, mutated sequences associated with Canavan disease, use of the sequence in DNA testing, and test kits for Canavan disease. The patent granted in 2007 claimed mutated versions of the aspartoacylase protein. The patents were assigned to the Miami Children’s Hospital Research Institute, Inc.
After the first patent was granted, MCH’s chief financial officer, David Carroll, sent letters to laboratories and hospitals, advising them that MCH had received the patent, and that those doing Canavan’s tests would have to take out a license or risk an infringement lawsuit. One such letter, received by Debra Leonard in 1999, stated: “We intend to enforce vigorously our intellectual property rights relating to carrier, pregnancy, and patient DNA tests for Canavan Disease mutations.”21
The letter described a $12.50 royalty for each test. The price was marked down from a reported $25.11
According to Joshua Greenberg, son of Daniel and Debbie Greenberg, MCH had originally set the price at $50. The letter also set volume limitations of 100 individual tests per academic laboratory per year (Personal communication with Dr. Michael Watson, Executive Director, American College of Medical Genetics).
The enforcement of the MCH patent (US 5,679,635) angered many in the Canavan community, including Rabbi Josef Ekstein, members of the Canavan Foundation, and the Greenberg family. In response, the Canavan Disease Screening Consortium was formed. The Consortium consisted of the Canavan Foundation, the National Tay-Sachs and Allied Diseases Association (NTSAD), the National Foundation for Jewish Genetic Diseases, and the Canavan Research Fund. On January 20, 2000, the Canavan Disease Screening Consortium, including Judith Tsipis (NTSAD), Michael Watson (American College of Medical Genetics), Jon Merz (University of Pennsylvania), Orren Alperstein Gelblum, Rosalind Poss Rosen (both of the Canavan Foundation), and Daniel Greenberg (NTSAD) made a presentation to officials from MCH, explaining that they believed the MCH’s licensing policies were too restrictive. They wanted the Canavan patent to be dedicated to the public good, as the University of Michigan’s patent for the Cystic Fibrosis gene had been. If the patent could not be dedicated to the public good, they requested four actions from MCH:
- Remove the volume cap on testing;
- Charge a royalty no more than 1–5 percent of the test price;
- Develop an educational outreach program to promote carrier screening; and
- Set up a fund to assist people unable to pay for screening or prenatal diagnosis (Personal communication with Dr. Michael Watson).
According to Dr. Michael Watson, Executive Director of the American College of Medical Genetics, who was present at the meetings, the representatives of MCH offered an undisclosed sum of money to be used for the proposed educational outreach program, but did not agree to the Consortium’s other requests (Personal communication with Dr. Michael Watson). An article by Jon Merz, who was also present at the meetings, says the offered sum was $20,000 per year, with the further condition that the Consortium members not publicly criticize the MCH.22
The Consortium welcomed the financial help but did not agree to the gag order.22
The MCH marketing plan had two phases: first, MCH would offer nonexclusive licenses to a limited number of academic laboratories, allowing them to perform a limited number of tests per year. Then, MCH would identify a “market leader”—a single, high-volume licensee such as Quest or LabCorp—and grant them an exclusive license on the remainder of the testing volume (p. 103).22
MCH originally planned to offer seven unrestricted licenses to the Canavan patents (Personal communication with Dr. Michael Watson). The effort to find a single large-volume licensee failed, and in April 2000 MCH revised its licensing plan.22
In the meantime, Dr. Debra Leonard had been performing Canavan disease testing in her University of Pennsylvania laboratory since before the patent issued. On advice from counsel, she refused to sign the MCH’s license agreement with volume limitations and the $12.50 royalty. However, MCH was owed back royalties from the tests that Leonard had previously performed without a license, and Marc Golden, MCH’s advisor and consultant, drafted a settlement agreement that prohibited any University of Pennsylvania physician from “perform[ing] or hav[ing] other(s) perform, any Canavan Tests… without first obtaining a license” (p. 105).22
This would not only prevent Canavan testing at the University of Pennsylvania, but would also prevent University of Pennsylvania physicians from collecting samples and sending them out to licensed laboratories, until the University of Pennsylvania itself obtained a license, which would be at the discretion of MCH. After negotiations, the University agreed to pay MCH past royalties and not infringe the patent in the future.22
In the meantime, tensions rose between the MCH, on one hand, and Leonard and the Consortium, on the other. Both Leonard and members of the Consortium tried to learn the names of the dozen or so laboratories that had taken licenses—Leonard, so that she could send samples to licensed laboratories, and the Consortium so that they could direct the community at risk to laboratories at which they could legally get tested. MCH stated that it would release the names of four laboratories, out of approximately twelve that had obtained licenses, to Dr. Leonard, and did not provide any information about licensed services to the Consortium.22
In October 2000, the Greenberg v. Miami Children’s Hospital
lawsuit was filed. MCH had alienated the groups that directly contributed clinical data and samples to help discover the gene associated with Canavan disease, and the constituencies most likely to use genetic testing. That is, the licensing scheme offended important and influential users of the Canavan genetic test. Daniel Greenberg, along with the Canavan Foundation, Dor Yeshorim, NTSAD, and three other plaintiffs who had children afflicted with Canavan disease, sued MCH, the Miami Children’s Hospital Research Institute and Reuben Matalon. The plaintiffs filed a six-count complaint, alleging a lack of informed consent, breach of fiduciary duty, unjust enrichment, fraudulent concealment, conversion, and misappropriation of trade secrets.23
On August 3, 2003, the case settled confidentially out-of-court, and a gag order prevents us from knowing the exact terms of the settlement. A press release from the Canavan Foundation characterized the agreement as follows:
Canavan Foundation, National Tay-Sachs & Allied Diseases Association, Daniel Greenberg and David Green have agreed not to further challenge Miami Children's Hospital's ownership and licensing of the Canavan gene patent. Miami Children's Hospital will continue to license and collect royalty fees for clinical testing for the Canavan gene mutation. The Agreement also allows license-free use of the Canavan gene in research to cure Canavan disease, including in gene therapy research, genetic testing in pure research, and in mice used to research Canavan disease.24
A phone survey conducted in 2001 by Cho, et al., showed that as of September 2001, four Canavan test providers listed on Genetests.org had stopped performing that test, citing the MCH patent as the reason for stopping.25
The Cho et al. study did not contain information on exactly how many laboratories were performing the Canavan test before 2001, so it is impossible to say what fraction of labs stopped performing the Canavan test due to patent enforcement.
Testing Facilities and Prices
A 2003 newspaper article reported that MCH had licensed the patent to 15 laboratories.11
Genetests.org currently lists 37 facilities that provide Canavan disease testing, diagnosis, and/or carrier screening. Of these 37 facilities, 23 are listed as providing mutation analysis, full sequencing, carrier testing, and/or prenatal diagnosis. These are all DNA-based tests, so those labs have most likely taken a license with MCH. Fourteen labs are listed as providing analyte testing only, which does not include DNA analysis and would not require a license.
In June 2007, Genetests.org listed 37 U.S. laboratories providing Canavan testing, and 34 for Tay-Sachs testing. Of these, 26 labs were listed as performing both Tay-Sachs and Canavan testing. A telephone survey of all 45 laboratories offering Canavan testing, Tay-Sachs testing, or both was performed between June and August 2007. Of the 45, six did not respond to repeated telephone calls. Of the 45, two stated that they no longer offered the Tay-Sachs test, and five no longer offered the Canavan test. In addition, 5 labs stated that they only provided the tests as part of a panel including other genetic tests, and these labs were excluded. Laboratory personnel, usually receptionists or billing staff, were asked for the list price of the test in question. When the tests were only available as part of a panel, we did not report the price of the test. Personnel were not asked whether they had a license for the MCH patents, as a negative answer to such a question could have posed a liability to the laboratory. Personnel were not asked whether they had taken a license of the Tay-Sachs patent, as the authors knew from the NIH OTT staff that it was never licensed.
In –, the tests are divided into several different categories, based both on test category information available from Genetests.org, on the website of the testing service, or descriptions of the type of test performed. Tests were divided into categories of Full Sequence Analysis, Targeted Mutation Analysis, and Enzyme Assay/Analyte. Price per Amplicon for Full Sequence Analysis was calculated by dividing the price of the test by the number of amplicons the test sequences; for Tay-Sachs, full sequencing entails 14 amplicons (for the 14 exons in the gene), and for Canavan disease, full sequencing entails 6 amplicons (for the 6 exons in the gene).
Enzyme assay (tay-sachs)/analyte test (canavan)*
The data show that, despite the differences in intellectual property, the only significant pricing difference between Canavan and Tay-Sachs laboratory tests occurs in the average price per amplicon. Average test prices of the tests for Tay-Sachs and Canavan Disease were usually less than ten dollars apart. The exception is the Ambry full sequence analysis for Tay-Sachs, which is $800 more than the comparable Canavan test. It is unclear why the Ambry Tay-Sachs test would be so much more expensive than the Ambry Canavan test. One possible reason is that the hexosaminidase gene is longer than the aspartoacylase gene: the ASPA gene is 29kb and the HEXA
gene is 35kb.4
Based on the Ambry prices and the length of the respective genes, the price per base pair for the Ambry Canavan test is $0.031; the price per base pair for the Ambry Tay-Sachs test is $0.048. The average price per amplicon for Tay-Sachs, however, is $111.50 while the price per amplicon for Canavan disease is $199.58: a significant difference that could reflect a patent premium.
There are several confounding factors that may affect these data. First, the number of laboratories offering each test may be inaccurate, because some “labs” are only sample collection points, which then send the samples they collect to other laboratories that perform the test. This would affect both the number of labs offering the test, and the number of labs that have a sub-license of the MCH patents. Also, at least in the case of Tay-Sachs Disease, many schools, universities, and Jewish organizations (such as the Dor Yeshorim) offer free carrier screening throughout the year, which could significantly increase access but does not appear on genetests.org. For example, a branch of NTSAD in the Delaware Valley offered six free Canavan and Tay-Sachs screening dates during the months of May and early June in 2007, and published a list of nine hospitals offering free screening throughout the month of May 2007.26
Other examples of universities offering free Tay-Sachs screening included the University of Wisconsin-Madison (2003 and 2004),27
Santa Monica College (2003),28
University of California at Davis (2005),29
and San Jose University (2001).30
One other confounding factor is the pricing of the tests themselves. Laboratory prices may reflect a change in licensing policy from MCH’s original $12.50 royalty; however, because the Greenberg v MCH settlement was sealed, any agreed royalty rate may never be publicly available. Overhead costs may also contribute to pricing differences.