Invalid! The Supreme Court Questions the Basis for Diagnostic Patents
This article was originally published in Start Up
Executive Summary
The Supreme Court has decided to hear a case--LabCorp. vs Metabolite--that could invalidate patents based on the correlation between natural biological markers, like proteins or genes, and a disease. The case strikes at the heart of the new diagnostics start-ups-and could also invalidate a host of pharmaceutical IP strategies.
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The Supreme Court previously took a hands-off approach to IP cases, often going whole terms without deciding matters in this area, but that era appears to be coming to an end. The current justices have shown a renewed interest in patents, handing down one or more major decisions in each of the past few years. The life science industry will not only be affected by this shift; it is largely the means through which the Supreme Court is engineering this change in direction, particularly in the biopharma industry.
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The New Diagnostics Companies
A small number of start-ups are developing novel specilalty-focused diagnostics that capture drug-like revenues and margins without taking drug-like development and regulatory risks. Questions about the business model abound, since most companies need multiple tests to reach profitability and a changing regulatory climate may force these companies to seek FDA approval for their tests, dramatically increasing development risk and cost.