CEO SUMMARY: Diagnostic manufacturers will begin to face the same controversy over public access to diagnostic testing technology that has dogged pharmaceutical companies in recent years. Public health officials and the military are unhappy with how Bio-Rad and its HIV-2 licensees have failed to provide the United States with a rapid HIV-2 test.
EXPECT MORE CONTROVERSY over biotechnology patents which limit access to technology that can be used in diagnostic testing. These patents grant a 17-year monopoly on the commercial use of genes, viruses, organisms, and scientific processes.
The latest case to receive public attention is Bio-Rad Laboratories Inc.’s patent covering the HIV-2 virus. On December 20, 2001, The Wall Street Journal ran a front page story about the role this biotechnology patent has played in hindering development of a “rapid” HIV test in the United States.
Fast, Accurate And Cheap
Rapid HIV tests use a drop of blood or saliva as a specimen and can provide acceptably accurate results in just minutes without the need for sophisticated equipment. Several vendors provide rapid HIV tests that are widely used in Europe and many undeveloped countries. But despite the proven effectiveness of this point-of-care testing method, there are no rapid HIV tests available in the United States.
This contradiction was the subject of the WSJ story. Bio-Rad gained the patent to the HIV-2 virus when it acquired Sanofi Diagnostics Pasteur in 1999. Through the 1990s, Sanofi and then Bio-Rad had granted licensing rights to the HIV-2 virus to Abbott Laboratories, Chiron, and Johnson and Johnson’s Ortho-Clinical Diagnostic (OCD) division.
These companies developed HIV testing kits which run on their sophisticated instrument systems and must be done in licensed laboratories. In the United States, the HIV testing market is about $200 million per year.
The public interest issue involving access to the HIV-2 patent has also developed during the 1990s. HIV-2 is a strain involved in about 25% of HIV infections in West Africa. In the United States, only about 200 cases of HIV-2 have been reported. But the numbers of such cases are increasing in New York City and Washington, DC, both cities where there are sizeable communities of West African immigrants.
Advocates of rapid HIV testing are public health officials and the military. Public health officials note that up to one-third of the individuals who show up at public clinics and get an HIV test do not come back for their results. A rapid HIV test, requiring only minutes to generate reliable results, would be a boon in their efforts to control the dis- ease and treat infected individuals.
For the military, the issue is how to prevent accidental transmission of HIV-infected blood on the battlefield. After the explosion on the U.S.S. Cole, for instance, stockpiled blood ran out and injured sailors were transfused with blood from those at the scene. That blood was unscreened for HIV, since the Navy lacked an FDA-approved rapid HIV test.
So why does the United States lack the same rapid HIV tests used to such great effect worldwide? This time the “villain” is not the FDA. It’s the diagnostics vendors with licenses to the HIV-2 virus. The licensing agreements between Bio-Rad, Abbott, Chiron, and OCD require that all licensees approve the extension of licensing rights to additional companies.
To date, companies like Universal Healthwatch, OraSure Technologies (formerly Epitope), MedMira Laboratories, Chembio Diagnostic Systems, and Trinity have all developed effective rapid HIV tests. But Bio-Rad has refused to grant licensing rights to the HIV-2 virus. This prevents these firms from gaining FDA approval and distributing rapid HIV test kits in the United States.
Officials at the Centers for Disease Control (CDC) and within the military are very frustrated at this situation. The Wall Street Journal published the following strong comments. “They have [Bio-Rad, Abbott, Chiron, OCD] locked everyone out of the U.S. market,” says Nelson Michael, chief of molecular diagnostics at the Walter Reed Army Institute of Research, the U.S. military’s medical-research center. Bernard Branson, the CDC’s epidemiologist in charge of HIV diagnostics, says, “I’d call it restraint of trade. It’s a travesty to stand by and allow these tests to languish.”
THE DARK REPORT believes the WSJ’s front page article was triggered by frustrated officials within the public health sector and the military. This debate is typical of others to come. It will be “public interest” versus “private incentives” that patents are supposed to encourage.
Within the clinical laboratory industry, PCR technology was an early example of patent access issues and licensing fees that accompany a useful biotechnology patent. However, Roche has been willing to extensively license use of its PCR technology, to encourage its wider use in laboratory and other applications. This has generated substantial licensing fees for Roche.
Protecting Their Market
In the case of the HIV-2 patent, there are strong arguments that Bio-Rad, Abbott, Chiron, and OCD have collectively preferred to deny licensing rights to companies developing rapid HIV kits, which are commonly sold worldwide for about $2 each. This protects their market in the United States, which is built upon more expensive kits which are run on complex instrument systems.
Adding fuel to that fire is the fact that Bio-Rad, Abbott, and OCD have made easy-to-use rapid HIV test kits for sale overseas, but have not introduced them into the United States.