Contracting to counter gene patents – a 21st Century solution to access and innovation

By Sarah Ali-Khan and E. Richard Gold

As Precision Medicine becomes a reality, molecular tests are an increasingly critical part of patient care. While patients and their physicians would like to maximize access, they have confronted a roadblock in the form of patents covering genes and methods of diagnosis. Many hoped that the landmark 2013 Supreme Court of the United States decision in Myriad v AMP spelled the end of these patents, but the number of gene patents has actually increased since that decision. This is because, while limiting the availability of patents over genomic DNA, the court decision was narrow, leaving substantial grey zones such as over cDNA or where the patent covers a sequence of DNA used in a particular way. Patent agents have been assiduous in exploiting these grey zones to file for and obtain patents over molecular tests. This development points to continued adverse consequences of gene patents not only in the US, but around the world. Our recently published GiM article Gene patents still alive and kicking: their impact on provision of genetic testing for Long QT syndrome in the Canadian public health-care system’, not only examines the impact of gene patents in one country, Canada, but shows how 21st Century contracting can provide a nuanced and pragmatic means to enabling both access and innovation around patented genetic tests.

In Nov 2014, in the first Canadian instance of a public interest ‘test case’ in intellectual property and public health, The Children’s Hospital of Eastern Ontario (CHEO) challenged five patents held by Transgenomic Inc. over a genetic test for Long QT Syndrome (LQTS), a potentially fatal cardiac disorder most commonly striking in children and youth. Widely reported, settled in March 2016, and named as one of the year’s cases having the most impact on intellectual property, the case produced the CHEO Public Health Access Agreement. The Agreement does not itself alter law– gene patents remain valid in Canada. Rather, it constitutes a contractual agreement between parties to the litigation, allowing for efficient, no-cost test implementation. The Agreement explicitly states that Transgenomic will freely grant a license to test the LQTS-associated genes to any entity providing services within Canada’s public healthcare system. That is, except for a marginal private market, all LQTS in Canada can now be provided free. Read More

Violations of federal antifraud provisions alleged against two hepatitis B treatment producers

By Wendy S. Salkin

Two investor class-action suits have been filed within days of one another against two different California-based pharmaceutical companies both of which produce hepatitis B treatments, Dynavax Technologies and Arrowhead Pharmaceuticals. The named plaintiffs in both shareholder class-action suits, David Soontjens and Yaki J. Meller, are represented by counsel at Pomerantz, LLP.[1]

Meller v. Arrowhead Pharmaceuticals, Inc., et al., complaint filed (C. D. Cal. Nov. 15, 2016)

On November 15th, named plaintiff Yaki J. Meller filed a Class Action Complaint in the United States District Court for the Central District of California against Pasadena-based Arrowhead Pharmaceuticals, Inc., its President and CEO (Christopher Anzalone), and its CFO (Kenneth Myszkowski). Arrowhead is a biopharmaceutical company that, according to its website, “develops medicines that treat intractable diseases by silencing the genes that cause them.”

Among its clinical stage drugs are ARC-520 and ARC-521, which “are designed to treat chronic hepatitis B virus infection by reducing the expression and release of new viral particles and key viral proteins with the goal of achieving a functional cure.” ARC-520 is the drug at issue. According to the Complaint, Arrowhead knew but failed to disclose that ARC-520 “could be fatal at its higher doses and that the FDA was unlikely to approve the treatment as a result.”[2] In particular, the Complaint alleges that Arrowhead:

made false and/or misleading statements and/or failed to disclose that: (i) the Company’s ARC-520 was unsafe at certain doses and caused deaths in an ongoing primate toxicology study; and (ii) as a result, Arrowhead’s public statements were materially false and misleading at all relevant times.

According to Meller’s Complaint, in so doing, Arrowhead violated Sections 10(b) (“Position Limits and Position Accountability for Security-Based Swaps and Large Trader Reporting.”) and 20(a) (“Liability to contemporaneous traders for insider trading.”) of the Securities Exchange Act of 1934, “Position Limits and Position Accountability for Security-Based Swaps and Large Trader Reporting” and “Liability to contemporaneous traders for insider trading,” respectively, and Securities and Exchange Commission Rule 10b-5, “Employment of manipulative and deceptive devices.”

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Upcoming Fairness Hearing in NFL Concussion Litigation

By Christine Baugh

On November 19, Judge Anita Brody will hold a fairness hearing in the class action lawsuit of National Football League (NFL) Players v. NFL re: concussion injury. This is one of the final steps toward final approval (or rejection) of the settlement in the case. Before final approval Judge Brody must determine that the settlement is fair, reasonable, and adequate for the over 20,000 retired NFL players who are included in the class. A variety of concerns have been brought forth publicly regarding the proposed settlement, which received preliminary approval from Brody earlier this year. Around 140 retired NFL players filed objections to the proposed settlement and around 200 have opted out of the class. This blog post provides a brief overview of the settlement and objections to it.

Settlement terms (summarized):

  • Monetary Awards for those with a qualifying diagnosis. Award amount is determined based on a sliding scale that factors in diagnosis, age, and years played in the NFL.
  • Baseline Assessment Program. Class members who are Retired NFL Players have the option to participate in a baseline assessment and medical monitoring program.
  • Education Fund will be established to promote safety and injury prevention in football.

The long-form settlement document can be viewed here.

Concerns (summarized, non-exhaustive): 

A variety of concerns regarding the preliminarily approved settlement have been brought forth through the media and other channels. These are the types of issues that will likely be discussed at the fairness hearing and that Judge Brody will have to weigh in her determination of whether the settlement is fair, adequate, and reasonable for the class as a whole.

Many concerns regard the categories of diagnosis that are eligible for compensation.

Compensable categories are too restrictive: Under the current settlement agreement, former players can be compensated if they have a qualifying diagnosis of Alzheimer’s disease, Parkinson’s disease, Amyotrophic Lateral Sclerosis (ALS, or Lou Gehrig’s disease), death with chronic traumatic encephalopathy (between January 1, 2006 and July 7, 2014), and what are called Level 2 and Level 1.5 Impairment (these categories represent a pattern of performance on a battery of neurocognitive tests that is 2 or 1.7-1.8 standard deviations below normal, respectively). Some have argued that, although the categories included are important to compensate, there are other prevalent problems such as pituitary dysfunctiondepression, and mood and behavioral disorders that are associated with repetitive head trauma and should also be covered by the settlement agreement. Others are concerned that there are characteristics about the existing categories that are problematic (see next two points below).  Read More