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Gene licensing stifles R&D

Privatizing research findings may slow innovation, study finds

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3:27pm, August 9, 2010
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Making scientific information proprietary may quash innovation, a survey of genes discovered during the last decade concludes. The analysis found that genes discovered by the biotechnology company Celera — and protected as intellectual property for up to two years — were less likely to be studied by researchers and the developers of drugs and diagnostic tests than were genes that remained in the public domain.

Protecting intellectual property, whether through patents or licensing agreements, encourages private companies to invest time, energy and money in research that might never otherwise get done, the thinking goes.

“Generally speaking, the principle behind the intellectual property system is supposed to further public welfare,” says bioethicist Mildred Cho of Stanford University, who was not involved in the study.

But some analyses suggest that the financial hurdles and negotiations required by licensing agreements are off-putting, stifling academic research and innovation, and slowing the development of new tools and medicines.

The new analysis examined research and development on human genes that were cataloged by public and private genome-sequencing efforts beginning in the 1990s. Celera, a private company, was the first to decode the string of letters of some genes; other genes were first unraveled by the Human Genome Project, a government-sponsored sequencing effort.

Genes sequenced by Celera were protected intellectual property for two years or until those genes were sequenced by the public effort, whichever came first. Today, genes that were first sequenced by Celera are about 30 percent less likely to be the subject of new scientific publications compared with genes sequenced as part of the public effort, reports Heidi Williams in a National Bureau of Economic Research working paper released in July. Celera genes are also slightly less likely to be the focus of a marketable innovation, such as a diagnostic test for disease, reports Williams, a fellow at the NBER in Cambridge, Mass.

“It almost looks like the genes were ‘born’ one year later,” says Williams.  

However, it isn’t clear what Celera or policy makers could have or should have done differently, says economist Ashish Arora of Duke University in Durham, N.C. Under Celera’s intellectual property arrangement, academic researchers could still obtain the Celera data for free, but only to conduct basic research. Companies or institutions that wanted the data for commercial purposes — focused on money-making products — had to pay for the data and form a licensing agreement with Celera.

Typically patents are at the center of discussions about science and property rights, so to see a damping effect on research when licensing agreements were the hurdle is interesting, Arora says.

“This is a hard problem to solve,” he says. “I don’t see a silver bullet.” 

Policy makers tend to favor intellectual property arrangements. For example, the U.S. Bayh-Dole Act, enacted in 1980, encourages researchers and universities to seek patents on discoveries arising from federally funded research.

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