OPTING INTO DEVICE REGULATION IN THE FACE OF UNCERTAIN PATENTABILITY.

• Author: Eisenberg, Rebecca S.

INTRODUCTION I. CURRENT TRENDS IN GENETIC TESTING AND A SHIFT IN CANCER DIAGNOSES II. PROCESS PATENTABILITY AND THE SUPREME COURT III. GENETIC TESTING AND FEDERAL REGULATION IV. LEGAL REGULATION OUTSIDE THE PATENT SYSTEM CONCLUSION INTRODUCTION

It is a great honor for me to deliver the Helen Wilson Nies Memorial Lecture in Intellectual Property Law at Marquette University Law School. I want to begin with a few words about Judge Nies. I had the good fortune of speaking with Judge Nies about her career years ago when she returned to her alma mater, the University of Michigan Law School, and gave a guest lecture to my patent law class.

Judge Nies was a distinguished alumna who graduated Order of the Coif in the Class of 1948, and we are very proud of her at Michigan. She had a distinguished career in trademark law before her appointment to the federal bench in 1980. When the Court of Appeals for the Federal Circuit was created in 1982, she became one of its first judges, and eventually served as chief judge. Although the Federal Circuit is often viewed as a specialized patent court, prior to her appointment Judge Nies had little background in patent law. (2) But of course, patent law is still law, and Judge Nies was an excellent lawyer, so she rolled up her sleeves and figured it out. I admire that fearlessness, especially at a relatively late career stage. Rarely can individuals see where their career will take them, and if we want to take advantage of new opportunities--or simply provide the advice clients require in an ever-changing world--from time to time we all need to roll up our sleeves and learn something new.

Among Judge Nies's lasting contributions to the Federal Circuit were her early opinions on legal process and procedural issues. (3) These decisions were vital to the new court's mission to consolidate appellate jurisdiction over patent law and to standardize its interpretation. (4) Judge Nies's opinions on burden of proof, standard of review, the role of juries, and the authority of prior opinions of other courts are still cited today, while many substantive decisions of her Federal Circuit brethren from the same era have been overturned by subsequent decisions of the Supreme Court. (5) The enduring significance to the patent system of these process issues reminds us that patent law is not an island apart from the rest of the legal system. It works alongside other bodies of law, and operates through rules for administrative and judicial practice that are not unique to patent law.

The primary focus of my patent scholarship has been biomedical innovation. Patent law is often credited with motivating investments in biomedical innovation, particularly from the pharmaceutical industry, which relies heavily on patent protection and works hard to strengthen patent laws throughout the world. But patent law does not work alone. This is a lesson I keep learning. Other sources of legal regulation provide crucial assistance when patent law would otherwise fail to achieve its goals.

Today, I examine the intersection of patent law, FDA regulation, and Medicare coverage in a particularly promising field of biomedical innovation: genetic diagnostic testing. First, I will discuss current clinical uses of genetic testing and directions for further research, with a focus on cancer, the field in which genetic testing has had the greatest impact to date. Second, I will turn to patent law and address two recent Supreme Court decisions that called into question the patentability of many of the most important advances in genetic testing. (6) Third, I will step outside patent law to take a broader view of the legal environment for new developments in genetic testing, with a focus on two federal regulatory agencies: the Food & Drug Administration (FDA), which regulates new drugs and medical devices under statutory standards for safety and effectiveness; and the Centers for Medicare and Medicaid Services (CMS), which sets reimbursement policies for Medicare under statutory standards that limit coverage to technologies that are reasonable and necessary.

Last, with this background, I will explain a recent surprising development: developers of next generation sequencing (NGS) diagnostic tests for tumor DNA have begun seeking FDA approval or clearance for tests they are at liberty to provide, and in fact have already begun to provide, without asking FDA for permission. The answer lies in understanding the rules and practices that govern health insurance coverage and the important role of FDA in assessment of new technologies. This episode sheds an interesting light on the roles and interactions of different sources of legal regulation in supporting innovation outside the patent system.

1. CURRENT TRENDS IN GENETIC TESTING AND A SHIFT IN CANCER DIAGNOSES

   Advances in genetics and molecular biology have transformed scientific understanding of the basis of many diseases, identifying new molecular targets for therapy and rearranging diagnostic categories. Nowhere are these developments more striking than in cancer. Traditional cancer diagnosis focuses on the tissue of origin of a tumor. Caregivers look to the tissue of origin to specify what type of a cancer a patient has, and then consider different treatment options depending on whether the patient has breast cancer, colon cancer, lung cancer, etc. But increasingly it appears that what really matters is not so much the tissue of origin, but the genetic mutation that is driving the tumor.

   Studies to date have revealed hundreds of genes in which mutations associated with cancer arise. (7) Some of these mutations are common and well understood, while others are rare, and their role in cancer remains unclear. (8) Drug companies have developed a new generation of "targeted therapies" that are designed to work against tumors that have specific mutations. (9) Sometimes these targeted therapeutic products are developed and submitted to FDA for approval along with a "companion diagnostic" test to detect the targeted mutation. (10)

   FDA-approved indications for targeted therapeutics may specify tissue of origin as well as the genetic mutation targeted by the drug. An example is the drug Herceptin[R] (trastuzumab), one of the earliest FDA-approved targeted cancer therapies. (11) Initially, FDA approved the drug "for treatment of patients with metastatic breast cancer whose tumors overexpress the HER2 protein and who have received one or more chemotherapy regimens for their metastatic disease." (12) Later, FDA expanded the approved indications to include treatment of patients with tumors from other tissues that have the same genetic signature, specifically "the treatment of patients with HER2-overexpressing metastatic gastric or gastroesophageal junction adenocarcinoma." (13) Although breast cancer and gastroesophageal cancer arise in different types of tissues, if the resulting tumors are overexpressing the HER2 protein, both groups of patients are candidates for treatment with the same targeted drug. (14) In 2017, for the first time, FDA expanded the approved indications for another targeted cancer drug, Keytruda[R] (pembrolizumab), to include all tumors with the specified genetic profile, regardless of tissue of origin. (15) In the future, the most meaningful information for diagnosis of cancer type and selection of treatment may no longer be tissue of origin, but rather results of genetic testing. (16) However, much work remains to be done to understand the significance of different mutations in driving different cancers.

   Meanwhile, the cost of more extensive DNA sequencing has fallen significantly with the advent of next generation sequencing (NGS) technology, which makes it feasible to derive more information from a single DNA sample quickly and at little incremental cost relative to narrower tests that only look for particular mutations. (17) This technology alters the logical approach to genetic testing for cancer patients. In 1998, when Herceptin was first approved for treatment of HER2/neu overexpressing breast cancer, (18) it seemed sensible to test tumor DNA from breast cancer patients only for the particular aberration that would indicate a likely response to Herceptin. But today, with a larger set of targeted therapies available against different mutations and with the ability to sequence more DNA at lower cost, it is questionable whether such limited testing still makes sense. For a modest incremental cost, it is now possible to fully sequence, a DNA sample from a patient's tumor, the 350-400 genes known to be associated with cancer, making it possible to screen patients for multiple treatments at once. Even if no targeted therapies exist for the mutations that are found in a patient's tumor DNA, such testing could shed light on the patient's diagnostic odyssey. (19) It could also contribute to understanding of cancer by illuminating the mutations that may be causing particular tumors. (20) Multiple laboratories now offer such tests, both in academic medical centers and in commercial firms.

2. PROCESS PATENTABILITY AND THE SUPREME COURT

   The proliferation of new tests suggests a flourishing of innovation in the field of genetic testing, despite recent developments in patent law that have cast serious doubt on the patentability of many of the most important advances in DNA diagnostics. Doubts about patentability arise from two U.S. Supreme Court decisions.

   First was the Court's 2012 decision in Mayo Collaborative Services v. Prometheus Laboratories (21) The patent at issue claimed a diagnostic algorithm that involved observing a biomarker and then drawing a diagnostic inference about the patient's need for treatment. (22) More specifically, the patent claimed a method of optimizing treatment with thiopurine drugs by measuring levels of certain drug metabolites in a patient's blood and determining on that basis whether the drug dosage needs to be adjusted. (23) A...