From 'God's handwriting' to corporate profits

Genome companies and their lawyers and lobbyists have locked up federal policy on human gene patenting with little public discussion

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It was a sweet moment for J. Craig Venter, the president and chief scientific officer of Celera Genomics Inc. of Rockville, Md. On June 26, Venter and the head of the Human Genome Project, the government's genome venture, announced to a crowd assembled at the Capital Hilton Hotel in Washington, D.C., that they had finished decoding a rough draft of the human genome, which contains the entire set of human genes. Some in the audience raised questions about how much of "God's handwriting" would be controlled by a private corporation. Attempting to reassure the skeptics, Venter said, "No one is proposing to patent the genome."

But Venter was being somewhat disingenuous. While no one is proposing to tie up ownership rights to the entire genome, his company and others already are seeking 17-year patents for many of the 80,000 to 120,000 genes that are estimated to make up the genome. So far, genome-related companies have gotten a free ride, with the support of Congress and the U.S. Patent and Trademark Office behind them, in their quest to patent specific human genes. But as the gold rush to patent these genes accelerates, the companies might face a tougher challenge in convincing lawmakers and the public that patenting human genes is in the best interest of the public health, not to mention morally palatable.

Already, conservative Christian groups and some Democratic lawmakers have come out in opposition to patenting human genes. Even Republican presidential candidate George W. Bush has expressed concern at "people taking the place of God." Members of the medical research community also have been outspoken in opposing human gene patenting, with one group calling it an "egregious expropriation of our human heritage ... that can only retard biomedical progress" by charging fees to researchers who need access to patented portions of the genome. The former head of the National Institutes of Health, Nobel Prize-winning scientist Harold Varmus, recently warned Congress that overly enthusiastic gene patenting could "impede the delivery of public health benefits from discoveries in many important fields."

But any attempt to rein in the genetics companies from patenting human genes will run squarely into powerful forces that have billions of dollars at stake in being able to turn "God's handwriting" into corporate profits. In recent months, Celera and several other genome-related companies have hired lobbyists for the first time. With strong ties to the U.S. Patent and Trademark Office and to key members of Congress, these genome companies and their lawyers and lobbyists have locked up federal human gene patent policy with little public discussion.

New Players

Every inheritable human characteristic, from our potential height to hair color to number of fingers, is defined in our chromosomes, the long fibers inside each human cell composed of DNA, a double helix-shaped "twisted ladder" of chemical compounds. Residing on the chromosomes are genes, which transmit hereditary characteristics. The sum total of all of the chromosomes of an organism is known as the genome; the human genome is made up of the chemical code for 23 pairs of chromosomes.

By decoding the genome sequence (the order of the chemical compounds on each chromosome) of human beings, scientists could revolutionize medicine. The financial stakes are enormous. The companies that are the fastest in turning new knowledge about genes into medical advances could reap fortunes. With so much to protect and with the competition expected to become feverish, it's no wonder that Celera and others are learning how to play the Washington political game.

In March, Celera's parent company, PE Corp., formerly Perkin-Elmer, hired the lobbying firm of Williams & Jensen to represent the company before lawmakers and regulators. Williams & Jensen is one of the most powerful lobby shops in town. According to the nonpartisan Center for Responsive Politics, the firm ranked as the eighth-largest lobbying firm, by income, in Washington during 1998. It raked in more then $7 million from clients and doled out $386,000 in campaign contributions that year to lawmakers. In the first half of 1999, the firm took in more than $4 million, according to the center.

This move by Celera to increase its political presence has not gone unnoticed by competitors. Human Genome Sciences Inc., another suburban Maryland biotechnology firm that sequences portions of the human genome, in April hired the legendary lobbying firm of Akin, Gump, Strauss, Hauer & Feld. Akin, Gump ranked fourth in the Center for Responsive Politics' 1998 compilation, bringing in close to $12 million in client receipts, while distributing about $750,000 to lawmakers. In the first six months of 1999, the center tallied close to $6 million in Akin, Gump receipts.

Another competitor, Incyte Genomics Inc., of Palo Alto, Calif., also has a registered lobbyist, William Cloherty. Cloherty told The Public i that his role was "more of a scout here in Washington" for the California-based company, and that he doesn't engage in any "heavy lobbying." Incyte General Counsel Lee Bendekgey said Cloherty was brought on to help the company several years ago in an aborted public-private partnership, adding that the company plans to strengthen its lobbying operations soon.

The new lobbying push is aimed at protecting the large amounts of capital these genetics companies have spent on sequencing the human genome. (While Celera sequenced the entire human genome, Human Genome Sciences and Incyte focus on a small percentage of it.) Their business plans are roughly the same, selling access to their genome and gene databases to biotechnology and pharmaceutical companies. Those companies, empowered with the precise knowledge of where the specific genes reside and how they function, can then design breakthrough drugs and other bioengineered medicines. The drug companies have been supportive of human gene patenting, since they too patent genes in the course of their own research. Drug giants SmithKline Beecham Corp. and Eli Lilly and Co., for example, currently own 137 and 103 gene patents, respectively, making them among the largest gene-patent holders in the U.S., according to the patent office.

Sources familiar with the industry's actions cite two specific events over the last six months that pushed genome companies toward becoming politically active. The first was a joint statement in March by President Clinton and British Prime Minister Tony Blair stating that the human genome should remain in the public domain. That announcement crashed biotechnology stocks, bleeding the market valuations of companies such as Celera and Human Genome Sciences. Clinton and Blair clarified their positions soon after the announcement, maintaining that the patenting of specific human genes would still be legal and appropriate.

The Clinton-Blair announcement was a wake-up call to the genome companies: Either make your presence felt in Washington and lobby lawmakers on your issues or risk financial injury. Within two weeks of the incident, Celera's parent company hired Williams & Jensen. Two weeks later, Human Genome Sciences signed on Akin, Gump.

The second stimulus came in the form of the Justice Department's antitrust case against Microsoft Corp. A federal judge has ordered the breakup of the giant software company, though his ruling is on appeal. "A lot of these [genetics companies'] CEOs saw what happened to Microsoft, not playing the game in Washington," one industry observer told The Public i on condition of anonymity. "If you're a highly regulated industry, you need representation in Washington. The phone companies get it. They know they need 10,000 lobbyists."

To be sure, neither Microsoft nor the human genome industry is closely regulated by the federal government. But Microsoft is on the verge of being subject to an intrusive court order, and the genome companies want to ensure that the government's regulatory hand stays off their backs. If there is one lesson that the genome companies have learned from the Microsoft case, it's that they must get in the game early. Microsoft had not been politically active, maintaining only a small office in Washington, until the Justice Department was well into its investigation of the company. By the time the software giant began a big political push by hiring numerous Washington operatives, the antitrust trial was about to begin.

'Anything Under the Sun'

Under current U.S. patent law, private companies, organizations, and individuals are allowed to patent, for 17-year terms, the rights to a specific human gene. This rule flows from a landmark case before the Supreme Court in 1980, Diamond vs. Chakrabarty. The court held that "anything under the sun that is made by the hand of man" (in that case, a genetically engineered bacterium) is patentable.

Of course, genes are not made by the hand of man, but in the eyes of the court and the U.S. Patent and Trademark Office, the key aspect that allows for the patenting of genes is the sequencing process, according to Steve Kunin, associate commissioner for patent policy. In an interview with The Public i, Kunin said that the sequencing process "takes something out of nature, isolates it and purifies it." In that new "isolated" and "purified" state, he said, the gene is no longer a completely natural material, but a product of man and, therefore, patentable.

To date, according to the patent office, 1,000 patents have been issued for human genes. The leading company in the patenting of genes, including plant and nonhuman genes, is Incyte, which had patented 315 different genes through 1999. Human Genome Sciences ranks 11th, according to the patent office, with 90 patents on various genes, although a company fact sheet notes that Human Genome Sciences has filed for more than 7,500 patents on human genes.

Celera, a much younger company, has many patent applications pending, and it typically takes from 24 to 30 months for final approval, according to Kunin. Celera spokeswoman Heather Kowalski told The Public i that Celera's business plan is not focused solely on patenting human genes. She says the company plans to file from 100 to 300 applications for gene patents, and only for those that are "medically relevant genes that will lead to improved therapies." Celera filed its first batch of gene patent applications with the patent office several weeks ago, she says.

There is remarkable unanimity in the patent law community on the issue of human gene patenting, with little dissent raised on either legal or ethical grounds. If such criticism ever arose, however, companies such as Celera, Incyte and Human Genome Sciences would be prepared.

For instance, the team assigned to Human Genome Sciences at Akin, Gump includes Thaddeus Burns, the former U.S. intellectual property attach to the World Trade Organization. Before coming to Akin, Gump, Burns was the principal legal adviser on intellectual property to both the Geneva office of the U.S. Trade Representative and the U.S. Mission to the United Nations. Before those stints, he was an associate solicitor at the patent office.

Daniel Spiegel, one of Burns' colleagues also assigned to the Human Genome Sciences account, once served as the U.S. envoy to the World Intellectual Property Organization. Spiegel told The Public i that the primary issue concerning Human Genome Sciences is U.S. patent policy on human genes, though he acknowledged that for the foreseeable future there seems to be no threat to that policy being changed. Human Genome Sciences' hiring of Akin, Gump was more of a move to hedge against future regulation, he said.

Steven Hart, president of Williams & Jensen and a registered lobbyist for Celera, is a major player in the Republican Party and helped raise money for both George W. Bush and Sen. John McCain of Arizona this election cycle. His firm routinely holds fund raisers for politicians at a firm-owned townhouse on Capitol Hill, including events for the Republican leadership in both the House and Senate. Washingtonian magazine ranked Hart the 14th most powerful lobbyist in Washington in 1999.

Incyte, for its part, acknowledges that it lags behind other genetics companies in its Capitol Hill operation. "We certainly need to focus more on government relations," says General Counsel Bendekgey. He did mention that the New Democrat Network, a centrist-leaning Democratic Party caucus, stopped by Incyte's California offices in June for a policy discussion.

So far, the criticism aimed at human gene patenting has come from scientists and researchers, who say that having to pay royalties to private companies for genetic information will slow the pace of medical research. The board of directors of the Council for Responsible Genetics, a nonprofit association of scientists and public health advocates that includes famed paleontologist Stephen Jay Gould on its advisory board, issued a statement on June 26 saying that the patenting of human genes "represents an egregious expropriation of our human heritage. The requirement to pay license fees to access our own gene sequences is a barrier that can only retard biomedical progress. Congress needs to instruct the Patent Office to cease granting patents on human gene sequences and to exclude living creatures, their genes or components from the patent system."

But there is a huge financial incentive for the genome companies and their patent attorneys to maintain the status quo. In a recent edition of The Economist, Human Genome Sciences founder and chairman Dr. William A. Haseltine estimated that it costs $250,000 to patent a gene internationally. (Companies often apply for patents in Canada, Europe, and Japan in addition to the United States.) And most of that money lands in the pockets of the patent bar.

With at least 80,000 genes potentially patentable, that means the possible cost of the legal work worldwide could reach close to $20 billion, a sizable chunk of it going into the pockets of U.S intellectual property lawyers and government offices (which charge fees for each patent).

Many of the attorneys handling patent applications for genetics companies have strong ties to the government. For instance, one of the law firms hired by Human Genome Sciences to assist the company in gene patent applications is Sterne, Kessler, Goldstein, and Fox , a Washington, D.C.-based intellectual property firm. Of the 37 members of its "Biological/Chemical Group," seven previously worked as examiners at the patent office. Another three worked at the National Institutes of Health.

Their Man in Congress

The possibility of Congress stepping in to seriously weaken the ability of companies to patent human genes seems unlikely, however — at least for now. The issue of genetic patenting is primarily the territory of Rep. Howard Coble, R-N.C., the chairman of the House Judiciary Subcommittee on Courts and Intellectual Property. Coble has strong ties to the intellectual property community, which includes both the bar and the pharmaceutical companies that have huge financial stakes in coming up with medical advances based on gene research.

According to the Center for Responsive Politics, Coble's campaign contributions for re-election in the fall have come in large part from "lawyers/law firms" and "pharmaceuticals/health products," which rank one and two, respectively, on its list of industry contributors to him for 1999 to 2000. Coble has taken in more than $65,000 from those two industries through June 1.

Coble also has been a frequent flyer on the intellectual property bar's tab. In 1997, the American Intellectual Property Law Association invited Coble to London to speak at a symposium, ponying up more than $5,000 for airfare, lodging and meals. Also that year, in August, the Ripon Education Fund, a moderate Republican nonprofit policy group, spent $4,000 on expenses for Coble to fly to Prague, Czech Republic, "to participate in the transatlantic conference and to discuss intellectual property issues in Europe," according to congressional travel records. In October that year, the patent office itself paid for Coble's whirlwind tour of Madrid and Barcelona, Spain, and Venice, Italy, with $4,500 of taxpayer money to meet with various foreign intellectual property officials.

The fact that the patent office paid for one of Coble's trips is probably more than coincidental. Coble has been the primary sponsor of the patent office's appropriations and reauthorization bills over the last several years in the House, including an attempt to increase the office's funding by more than $130 million on June 23.

Trips in 1998 included one to Columbia University's School of Law to speak on intellectual property rights and a visit to San Francisco, on the tab, again, of the American Intellectual Property Law Association. The latter trip was pegged at a cost of more than $5,800, with the lion's share coming from round-trip transportation expenses from Greensboro, N.C., to San Francisco, valued at $4,482.

The Einstein Institute for Science, Health and the Courts, which is funded by the departments of Energy and Health and Human Services to, according to its Web site, "prepare the Judicial Branch for new case varieties emanating from the Human Genome Project's identification of all human genes," paid for a $1,000 Coble trip to the Cape Cod resort town of Orleans, Mass., in August 1999. That was followed by yet another American Intellectual Property Law Association trip, this time to the Hague, in the Netherlands, at a cost of $6,500.

In 2000, two of Coble's staffers have been treated to a three-day trip to California to visit with the Walt Disney Co., under the auspices of a "congressional fact-finding trip." That travel record also cites "intellectual property" as a reason for the trip, which was paid for by the company.

The issue of gene patenting is beginning to get some attention in Congress. On July 13, Coble's subcommittee held a hearing dealing primarily with how tough the patent office's standards should be for allowing human gene patents. One of the panelists at the hearing was Varmus, the Nobel-winning scientist and former head of NIH. Varmus provided the most critical testimony about current human gene patent policy, saying, "some of the gene patents issued to date ... appear to reward excessively the preliminary and frankly obvious work of determining DNA sequence." However, no one on the panel, including Varmus, questioned the patentability itself apart from the "standards" issue.

Varmus' criticism centers on the standards required by the patent office for patenting a human gene. The first genes to be patented faced little regulatory controversy, as they were shown to be clearly linked to causing specific diseases. But as sequencing the human genome progressed, companies began applying for, and receiving, patents on genes without having a thorough understanding of the function of the gene. This violates one of intellectual property law's central tenets, which is to show the "utility" of an invention in order to receive a patent. Recently, the patent office solicited public comments that will lead to a policy change in the necessary requirements for a human gene patent; it plans to officially "raise the bar" by the fall of 2000.

Varmus' primary concern was that overly aggressive patent protection of genes could lead to the retardation of scientific progress by keeping valuable genetic information from the research community before its true function is understood. "Overly enthusiastic protection of intellectual property, too early in the process of product development, can impede the delivery of public health benefits from discoveries in many important fields, including genomics," Varmus said.

One of the few voices in Congress to publicly criticize U.S. human gene patent policy has been Rep. Henry Waxman, D-Calif. Speaking July 2 on NBC's Meet the Press, Waxman attacked human gene patenting as a "land grab," and worried that "researchers are going to find it hard to conduct research if they don't have the patent or have to pay royalties." Whether Waxman will take any direct action to try to change patent law remains in question; Waxman spokesman Phil Schiliro said the congressman was "looking into the issue" and hadn't decided what he will do.

November Impact

Human gene patenting also has implications for the presidential race. Some conservative religious groups, a key Bush constituency, already have criticized the patent policy. Ben Mitchell, a consultant to the Southern Baptist Convention's Ethics and Religious Liberty Commission, said he finds human gene patenting "ethically problematic" for religious reasons. He added, "we ought not have to worry about 'follow-the-money,'" a reference to private companies' lobbying practices. Regarding the patent office's argument that sequencing the genome changes a human gene into a man-made, and therefore, patentable object, Mitchell argued that "it's unclear that the 'purified' form of the gene removes it from that which is natural."

The Southern Baptist church, with 15.8 million members, is the largest non-Catholic Christian denomination in the United States. The church has long been opposed to human gene patenting. In 1995, the Southern Baptist Convention held a news conference in Washington, D.C., to offer its "vigorous opposition to the patenting of human genes." It said "that the U.S. Patent Office would grant such applications is absolutely chilling." In a recent statement issued after the Celera/Human Genome Project announcement, the organization lamented, "Those who make public policy cannot agree ... that human beings and their body parts should not be owned through the patent process."

Scott McClellan, spokesman for the Bush campaign, told The Public i that Bush has previously "expressed concern about people taking the place of God," and that, as president, Bush would assemble a team of scientists and ethicists to examine the implications of genetic patenting and other genome-related issues.

Vice President Al Gore articulated fewer reservations than Bush, releasing a congratulatory statement on the day of the genome announcement, but adding that as president he would continue to explore "the legal and ethical implications of this great milestone."

The patent office's Kunin acknowledged that genome companies such as Celera, Incyte, and Human Genome Sciences might face future regulation from entities other than the patent office. He notes that the government will begin taking a look at the industry if price gouging occurs with the new drugs and therapies that are developed as a result of the decoded genome. Discussing how patents allow a company to keep the prices of drugs artificially high, he said that the Justice Department is "getting very interested in anti-competitive activities," and that "there is a possibility that unless [the genome] industry plays by the rules, DOJ will start getting interested."

The biotechnology and drug companies that are able to capitalize on the decoded human genome with new breakthrough drugs will pay a high price in the form of many other failed drugs. If those two factors remain in relative balance, Kunin says, Congress will not likely intervene in the industry. However, Kunin warns, "If the fulcrum between return-on-investment and excessive greed shifts, Congress could step in."

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