Current Policy Challenges in Genomic Medicine

BACKGROUND Molecular genetic testing has raised a variety of policy issues, ranging from privacy to reimbursement. Recently, payment policies have become of paramount importance as Medicare implemented the first significant change to test pricing since 1984 and announced a broad national coverage policy for the use of next-generation sequencing (NGS) in cancer patients that contains significant restrictions. Regulatory and oversight concerns have been important topics for discussion as the US Food and Drug Administration (FDA), Congress, and stakeholders have focused on new approaches to regulation of laboratory-developed tests (LDTs). Patents on gene sequences and relationships between genetic variants and clinical phenotypes have been points of contention since the field's inception. Two Supreme Court cases invalidated patents on gene sequences and biological relationships, ushering in the era of NGS and precision medicine. However, a recent legislative proposal threatens to reverse these gains and restore gene patents as barriers to progress in genetic and genomic testing and the implementation of genomic medicine. CONTENT This review discusses current issues in payment policy, laboratory oversight, and gene patenting and their potential impacts on genetic and genomic testing. SUMMARY Coverage and reimbursement policies present serious challenges to genetic and genomic testing. The potential for FDA regulation of LDTs looms as a significant threat to diagnostic innovation, patient access, and the viability of molecular genetic testing laboratories. Changes in patent law could cause gene patents to reemerge as barriers to the advancement of genomic medicine.

How Do Patents Affect Follow-On Innovation? Evidence from the Human Genome

We investigate whether patents on human genes have affected follow-on scientific research and product development. Using administrative data on successful and unsuccessful patent applications submitted to the US Patent and Trademark Office, we link the exact gene sequences claimed in each application with data measuring follow-on scientific research and commercial investments. Using these data, we document novel evidence of selection into patenting: patented genes appear more valuable—prior to being patented— than non-patented genes. This evidence of selection motivates two quasi-experimental approaches, both of which suggest that on average gene patents have had no quantitatively important effect on follow-on innovation. (JEL I10, O31, O34)