The economics of isolated human gene patents in Australia

On the basis of the recommendations of the 2010 Senate Community Affairs References Committee Report on Gene Patents, the Centre for International Economics (CIE) was commissioned by IP Australia to investigate the economics of isolated human gene patents in Australia. The Report has recently been made publicly available and focuses on the economic impact in Australia of gene patents.

The key findings of the Report are as follows:

Patents play a key role in promoting innovation and the public-private partnerships required to bring new human gene-based medicines and diagnostics to market.

  • Patent activity related to isolated human gene sequences has declined dramatically since the completion of the Human Genome Project in 2003.
  • Current gene patenting activity is increasingly focused on methods of using isolated gene sequences and on modified (ie not naturally occurring) DNA and genetic sequences created in laboratories.
  • Approximately $795 million was invested in gene technologies related to human health in Australia during 2011-12, and this has been rising over time. Isolated human gene sequences are part of that investment. However, the Report indicated that it was not possible to isolate the precise share.
  • Measurable economic impacts associated with isolated human gene sequence patents are small in terms of royalty and fee income attributable to the patent.
  • Costs often cited as caused by isolated human gene patents, eg price of gene diagnostic tests or the inability to improve on diagnostics, do not appear to be the result of patents per se but rather issues over exclusive licensing, complexity of the technology or business relations. No additional economic cost attributable to these patents could be identified.

The findings of the Report appear to indicate that the patent system is effective in bringing gene-based medicines and diagnostics to the market for the benefit of the Australian public.