Genetics and Biotechnology: DNA in the Marketplace

This program is all about control: the control of genetic research, the control of our own genes, and the control of the very personal information those genes contain. The answers aren't clear-cut, and, many would argue, the ethics surrounding the issues are sometimes blurred as well.

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The DNA Files: Unraveling the Mysteries of Genetics

Genetics and Biotechnology: DNA in the Marketplace?
Transcript

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[Theme Music]

JOHN HOCKENBERRY: This is the DNA Files, I'm John Hockenberry

JULIA GREENSTEIN: What biotechnology has done is really allowed us to transition the ideas from the academic lab into the reality of a drug in a bottle.

SHELDON KRIMSKY: The whole idea of taking public funds and turning them into private profit is a perversion of the competitive system that we're in.

JOHN HOCKENBERRY: The biotechnology business is the economic engine fueling the genetic revolution. But there's more to biotechnology than a good business plan. Translating research into products raises questions of ownership, academic freedom and public trust in science. Coming up, Genetics & Biotechnology - DNA in the Marketplace. But First.....

JOHN HOCKENBERRY: We invite you now to gaze into the future. Don't be nervous- just the near future, when the age of genetic hand work ends and the age of genetic automation begins; a world in which the tools of molecular genetics begin to emulate the tools of computer science; a world awash in raw genomic data just waiting to be downloaded. We invite you, in short, to meet the bio-chip. We have this report from John Rieger.

A sound from the robotic device abruptly starts and stops.

MIKE EISEN: So this is the arraying machine.

RIEGER: You wouldn't know from the green t-shirt and the green lizard earring that Mike Eisen is a geneticist at Stanford University. And you'd never guess that this contraption, with it's screws and wires and strips of yellow tape is the next big thing in genetics.

MIKE EISEN: It is both a semi-sophisticated robotic device and somebody's project. All of the instructions for assembling it are available on our web site. And in fact, you know, if you know what you're doing with screwing things into a bread board and attaching wires to a connector, you can build one of these things in really a matter of a few days.

JOHN RIEGER: But this humble-looking science project is cutting edge technology. It makes DNA micro-arrays, also called bio-chips, ingenious tools for looking at all the genes of an organism at once. Genes, of course, are the blueprint for building an organism; but once it's built, they become the cell's operating system, turning on and off, minutely controlling cellular activities, from metabolism, to protein synthesis, to hormone response. That turning on and off is called gene expression . Mike Eisen.

MIKE EISEN: One of the things that's brought home quite clearly by experiments where you look at all genes at once is the dynamic and constantly changing nature of a cell. They're constantly changing which genes are expressed, and where they're expressed and what they're doing in response to what they're sensing in their environment.

JOHN RIEGER: Whether it's a yeast cell fermenting a perfect pinot noir, or a human cancer cell growing out of control, the bio-chip can show researchers which genes are doing the work. The chip is actually a microscope slide, or several slides, robotically printed with thousands of tiny dots. Each dot contains the DNA for one gene. The double-stranded DNA in the dot is heated to make it unzip . Then it's exposed to a batch of DNA made from the organism, that's been labeled with a fluorescent molecule. The new DNA starts looking for it's twin on the chip.

MIKE EISEN: The labeled copies of genes fish around on the surface of the glass and find their corresponding gene at some fixed position on the piece of the glass and stay there.

JOHN RIEGER: So like little half zippers they find their other half and they zip up?

MIKE EISEN: They find their other half and they zip up and just stay there.

Sound of the scanning laser microscope

JOHN RIEGER: The fluorescent DNA sticks to the corresponding gene on the chip. Now the chip is lit with a laser and scanned into a computer. The more a gene is being expressed, the more DNA there is to stick to that dot, and the brighter the fluorescence under the laser. It's a complete snapshot of genetic activity in the cell.

DAVID BOTSTEIN: It's going to become a standard technique for looking at genes all over biology.

JOHN RIEGER: David Botstein is Chairman of the Stanford Genetics Department, and himself a pioneer of gene mapping. Until now, he says, studying gene expression has been painstaking hand work, that gave only a fragmentary glimpse inside the cell.

DAVID BOTSTEIN: So, that whereas the standard now is to look at maybe a half a dozen genes at once and watch how their activity changes under different circumstances and challenges for the organism, the standard is gonna be, in just a few years, to look at all of them. It's the difference between watching individual molecules of water bouncing around, and seeing waves.

JOHN RIEGER: The bio-chip, in a number of versions besides Stanford's, produces so much data that biologists need specialized computer software to make sense of it all. The Stanford lab alone has recorded some 10 million measurements of individual genes. Waiting to be discovered in vast tables of as yet uninterpreted numbers are clues to cancer biology, genetic disease, and drug design. Mike Eisen.

MIKE EISEN: So many people are interested in this…this type of data that it…the field itself is exploding. You know, the…there are patent fights flying all over the place. There's hundreds of biotech companies out there already either buying chips or making them themselves.

JOHN RIEGER: And meanwhile you guys have got your blueprints out there on the Web as…as like freeware? What's going on?

MIKE EISEN: Well, you know, we're doing God's work here. You know, we are academic scientists and we do not like the closed-minded secretive world of bio-tech companies. And you know it only costs about $50,000 for all the parts that go into these things, and, you know, we provide all the software and we provide all the instructions for how to do it. And so, a laboratory researcher who was interested in pursuing this, could build their own machines and then make as many of these arrays as they wanted to.

JOHN RIEGER: So, if you hear this sound coming from the apartment next door, you'll know someone is building bio chips. For the DNA files, I'm John Rieger.

JOHN HOCKENBERRY: This is the DNA Files. I’m John Hockenberry. In genetic research, the road from the lab to your pharmacy involves a lot more than simply the original scientific breakthrough. Once a substance is discovered, bringing it to market usually involves inventing a way to make genetically-engineered products on a mass scale. So to bring a new medicine, test or therapy to the public, Ph.D.s must collaborate with MBAs and CEOs. And what starts as taxpayer-funded research, ends up a stock price on NASDAQ. In the next hour, we’ll explore the road that genetic research takes to market, and we’ll talk with two people who know the bumps, curves and straight-aways of the biotechnology business. The road begins at American universities. It begins with a scientist, an idea, and at least in one case, a few pigs. GRAHAM SMITH REPORTS

(Sounds of pigs)

GRAHAM SMITH: It's an unlikely setting for science fiction. Or at least science and what once was fiction. About 30 pigs are caged in a building on this industrial farm in northern Massachusetts, but the housing isn't a sty - they're not rooting through dirt, and definitely not rolling in mud puddles.

(More pig sounds)

GRAHAM SMITH: They look a lot like the hero of the movie Babe - cute, white, and very clean. These aren't normal pigs, and they're not headed to a dinner table near you. They'll be shipped from the farm - the largest supplier of research animals in the country --- To the lab of Harvard Medical School's Doctor David Sachs, in Boston.

DAVID SACHS: Most people don't realize it - they ask me, 'why do you call these miniature swine?’

GRAHAM SMITH: Sachs runs the Transplantation Biology Research Center at Massachusetts General Hospital - one of Harvard University's teaching hospitals.

DAVID SACHS: Domestic swine get over a thousand pounds when they're full grown. I mean, they're enormous - so these get up to the same size as humans, about 200-300 pounds and that's why we call them miniature swine./(snort!)/ It also makes them exactly ideal size for the potential for using their organs for xenografts.

GRAHAM SMITH: Xenografts are transplants from one species to another. Xeno - from the Greek for foreign, or strange. -- Transplants from one human to another used to be revolutionary - but now, xenotransplants are the new frontier.

DAVID SACHS: The number of people who would like to get a transplant - and who need a transplant to survive, is increasing much faster than the number of donor organs available from cadaver donors. We and many other groups are now investigating the possibility of using other animals.

GRAHAM SMITH: In this case - pigs. The Xenotransplant solution has a host of problems, though. The biggest is the human immune system's violent rejection of foreign tissue.- With human-to-human transplants, there are usually ways of getting around rejection - either by closely matching the donor with the recipient – like when a person gets a kidney from a family member -- or by giving massive doses of anti-rejection drugs. The problem is that these drugs work by suppressing the immune system - lowering the body's natural defenses. That leaves the body vulnerable to infection and certain cancers. Plus, when you cross species lines, you create such a strong reaction that, according to Dr. Sachs, you just can't give enough drugs to prevent rejection of the organs without poisoning the patient or causing infection.

DAVID SACHS: So for all of these reasons, we've been working on a procedure to allow a transplant to be accepted not by just non-specifically suppressing the entire immune system, but instead by inducing tolerance to the transplant. And by tolerance I mean that we eliminate the immune response to the transplant only and not to all other antigens in the environment.

GRAHAM SMITH: Here's how it’s supposed to work: Like training a guard dog to accept a family friend, Sachs and his team want to teach a transplant patient's immune system to accept a new organ from a pig that’s been genetically altered. In theory, the doctors would temporarily knock down the recipient’s immune system with radiation and genetically engineered drugs – then inject bone marrow cells from the pig donor deep into the patient’s bones. As the immune system rebuilds again, the patient’s body will hopefully be fooled into accepting the pig's DNA as its own. And later, when the pig's organ is transplanted, the patient’s body should accept the new organ as part of the family. Most of the research is carried out on pigs and monkeys in a setting you'd expect for academics. Groups of grad students in T-shirts and sneakers attend meetings on the progress of animal patients, where various professors discuss their findings.

DAVID SACHS: How many days out is he now?
DONNA: Day 60 right now.
DAVID SACHS: Do you think he's getting better Donna, or staying constant? -
DONNA: I think he's constant, but I think he's doing OK ...

GRAHAM SMITH: It's a scenario repeated at universities across the country. About a dozen different teams are working on various strategies to try and solve the Xenotransplantation puzzle -- but there are two things they share in common. For one, they're all primarily funded with taxpayer money via the National Institutes of Health. Secondly - they're each tied - to some extent – to private corporate sponsors - companies that back their research and hope to profit from it. This funding scheme has raised some serious questions in the academic community. For instance, the miniature swine bred for BioTransplant and Doctor David Sachs are just one of several lines of pigs being raised at similar facilities for competing Xenotransplant hopefuls. Each herd has genetic modifications that are patented and protected - so each researcher has a piece of the puzzle - but corporate sponsors want to make sure no one shares the secrets -- because no company wants to share the spoils. Dr. Sachs says, in this way, industry holds up progress.

DAVID SACHS: What would really be optimal is to have one pig - and have one inbred line of pigs and each of the different groups that are working on different ideas for making that pig better would put their genes into the same inbred animal and then they would all share the very best possible donor.

GRAHAM SMITH: At the same time, he says he doesn't want to look a gift horse, or pig in this case, in the mouth. Without industry cooperation, Sachs says, his work would never have come as far as it has. Industry partnerships are becoming the norm throughout the life sciences, and competitive secrecy is just one of the complications arising from these relationships. At Harvard alone, members of the biotechnology faculty have links to over 40 different companies. Harvard Medical School health policy researcher - Doctor David Blumenthal, explains that the partnerships emerged out of a national necessity.

DAVID BLUMENTHAL: Prior to 1980, very few of the patentable ideas that originated from federally funded research were ever developed commercially.

GRAHAM SMITH: Private companies were reluctant to pour money into pigs, drugs, or any new treatments based on government-funded research if they couldn't be assured of sole ownership of the resulting products. Because of this, the U-S lagged behind international competitors in developing new treatments and medicines. Looking for a solution, Congress passed the 1980 Bayh-Dole Act - giving universities ownership of patents resulting from government-funded work done at their facilities. Since universities don't have manufacturing plants, they looked for private sector partners to license the patents. Again, Doctor Blumenthal...

DAVID BLUMENTHAL: That law, when it became widely known, unleashed an enormous flow of patents from universities, and there are tens of billions of dollars of commercialized drugs and devices now that can be traced, I think, to the enactment of that law.

GRAHAM SMITH: Dr. Sachs' xenotransplant lab is a good example of this kind of university-corporate partnership. In the late 1980's, a venture capital group called Healthcare Investors noticed Sachs' pioneering transplantation work. At the time, he was a government scientist doing research at the National Institutes of Health. Convinced they could use Sachs ideas to cash in on a projected $5 billion xenotransplantation market, the investors approached him about commercializing. Harvard Medical School, where Sachs had trained as a doctor, was also interested in his work and wanted to get him on board as a faculty member. The school and the venture capitalists got together and figured out a way both could get what they wanted. BioTransplant’s Chief Scientific Officer, Doctor Julia Greenstein picks up the story.

JULIA GREENSTEIN: Harvard decided to make him an offer he couldn't refuse. And David came to the Mass General Hospital - and at the same time Healthcare investors put up money to start a commercialization strategy for that work, and that's how BioTransplant was started.

GRAHAM SMITH: Standing outside the Mass General Labs, it’s hard to miss the close connection. BioTransplant’s headquarters are just across the street here. And it's no coincidence. The company wanted to be as close to the action as possible. BioTransplant’s scientists regularly attend Sachs' progress meetings, and are in constant contact. Sachs chairs the company’s scientific advisory board, and he’s paid for that - however, he owns no part of BioTransplant. In order to avoid a conflict of interest, Harvard guidelines say he can’t have any equity. The deal works like this: BioTransplant funds portions of Sachs' research, in exchange for exclusive rights to license the patents for any innovations that come from that work. BioTransplant also employs a staff of 60 or so scientists that work across the way here at their lab to take Sachs' discoveries and make them marketable. Julia Greenstein says it’s more than opportunism.

JULIA GREENSTEIN: What biotechnology has done is really allowed us to transition the ideas from the academic lab into the reality of a drug in a bottle.

GRAHAM SMITH: Or a pig heart in a human... If the treatments are successful, Massachusetts General Hospital and Harvard Medical School will receive royalties from BioTransplant. It could mean millions of dollars and Greenstein calls it a win-win situation for both academia and industry -- but what about the public that paid for most of the groundbreaking research in the first place? In these situations, almost nothing is directly recouped by taxpayers for the drugs they pay to discover - this, according to Sheldon Krimsky, a Tufts University professor, and a founder of the Council for Responsible Genetics.

SHELDON KRIMSKY: The whole idea of taking public funds and turning them into private profit is a perversion of the competitive system that we're in.

GRAHAM SMITH: Some studies show money can trickle back into the public purse through taxes and economic development. Still, Krimsky and other activists want taxpayers to get a bigger piece of the pie.

SHELDON KRIMSKY: We have a system now in which public risk yields private profit, and not private loss - and this is an inversion of the traditional values of the competitive economy.

GRAHAM SMITH: Not necessarily so, says Gillian Wollett of the Pharmaceutical Researchers and Manufacturer's Association - a trade group that advocates for drug makers.

GILLIAN WOLLET: I don't think you can say that the benefits are reaped by companies - they're reaped by patients.

GRAHAM SMITH: Wollett says the public welfare depends on companies getting involved.

GILLIAN WOLLET: See, and there's an irony to this debate because a lot of the reason the public support NIH funding is because there's the presumption that a product will emerge at the end - whereas NIH isn't in a position to actually make those products available themselves. It actually needs industry to pick up on the best ideas and develop them and invest that further, you know, 300 - 600 million dollars to make the safe and effective medicine in order to have its own research base justified.

GRAHAM SMITH: Whether the public pays attention to this kind of NIH spending at all is debatable -- nevertheless, Krimsky calls it corporate welfare. Worse - he claims corporate sponsored research is changing the culture of academic science. Instead of traditional academic competition to see who can make discoveries first - he says it’s become a race to the bottom line - as scientists look for ways to exploit their research commercially.

SHELDON KRIMSKY: That's inappropriate competition within the academic community - it's anti-science - it's appropriate for industrial communities where competition is part of the motive force of those communities - where you live and die on competition. But those values simply don't work well in academic science.

GRAHAM SMITH: Harvard's David Blumenthal has examined the effects of academic-industrial relationships on universities. What he’s found is troubling. For one, his data shows industry-funded researchers are more likely than others to come up with results that support their sponsor’s products. Also, Blumenthal says academic scientists whose work is partially paid for by industry tend to change the kind of work they do. Blumenthal says scientists often abandon the kind of basic research that lays the groundwork for others down the line.

DAVID BLUMENTHAL: I think industry wants something specific out of it and faculty members try to provide a product that will hopefully get them renewed funding. That's not true of everybody but on average that's the case. So I think it's part of the bargain of accepting industry funding.

GRAHAM SMITH: Universities are in the odd position of both promoting and regulating these deals- so there’s a big potential for conflict of interest. And schools take these concerns very seriously, according to Massachusetts Institute of Technology’s Lita Nelson. She’s a matchmaker of sorts, pairing ideas and patents generated at MIT with possible private collaborators. Nelson says top universities live and die by their reputations - and that they take a number of precautions against compromising the integrity of the scientists or of the institutions.

LITA NELSON: Our marching orders are very clear - thou shalt not and we will not interfere in the academic process.

GRAHAM SMITH: But, Nelson adds, if there’s been a shift away from basic science – that’s not necessarily a bad thing.

LITA NELSON: I think what you're seeing is more focused interest on 'what could this be good for?' maybe theoretically that means people aren't exploring the true outer limits, but in genetics, the questions are so hard anyway, that focusing on a more useful disease like schizophrenia rather than a more obscure one - yes there's a bigger market in the larger diseases - so what? So that's useful for humankind.

GRAHAM SMITH: Even if it’s true that market forces are a good engine for fighting disease - critics say that doesn’t mean the captains of industry should be at the steering wheel. David Blumenthal says that while his sense is that academic/industrial partnerships offer more benefit than harm, there are still reasons to be wary.

DAVID BLUMENTHAL: There's good evidence that industry funded research is associated with secrecy - with data withholding. Now, that's not true of all industry funded research or all researchers, but all else equal, people who are funded by industry share data less readily and face more restrictions on data sharing.

GRAHAM SMITH: And this isn’t just the proprietary pig modifications that Dr. Sachs complained about. Data withholding can mean academics keeping a lid on entire lines of possible investigation in case their sponsors want to research them later. Blumenthal says secrecy is more rampant in the fast moving field of genetics than anywhere else, because less data sharing can mean redundant work and wasted efforts, the dangers are more than academic. Lives may be lost due to delays in the development of new drugs and treatments.

sound of pigs at farm

GRAHAM SMITH: It will be years before these pigs’ organs find their way into patients. But, as more and more genetically-based products do make it to market - the question remains, at what cost? Ultimately, academia, industry and the public must strike a balance to make sure that society as a whole is served.

JOHN HOCKENBERRY: This is the DNA Files. I’m John Hockenberry. Joining me now are Steven H. Holtzman, who’s Chief Business Officer for Millennium Pharmaceuticals, a publicly-traded company on NASDAQ, and Barbara Handelin, who’s President of Handelin Associates, a private consulting practice that gives advice on strategic planning to entrepreneurs in the biotech field. Thank you both for joining us.

BARBARA HANDELIN: Thank you, John

STEVEN HOLTZMAN: Thank you, John.

JOHN HOCKENBERRY:: Now, my first question is, you know, I kind of understand the market. I kind of understand the way things work. Taxpayers are paying for a lot of this research that was described in the piece we just heard. If you pay for the original research, it seems, you should have ownership of the products that result. But that’s really not the case here. Why, Steven?

STEVEN HOLTZMAN: Well, it’s a long way from the basic research lab until the eventual product. And so Congress, starting in the early eighties, passed legislation which allowed the universities to retain ownership and patents, but to exclusively license them to, for example, biotechnology companies, because it was felt in the public interest to see the realization of that basic research in products such as the organs for transplantation, which could benefit the public.

JOHN HOCKENBERRY: So the idea was, these breakthroughs being stalled and not coming to market was not in the public interest. This was a sort of an engine to make them come to fruition. But I’m wondering, Barbara, if, at that point, is there accountability for the private owners, the universities, the entrepreneurs, who end up owning some of these products? I mean, is the public interest seen all the way through to market?

BARBARA HANDELIN: Well, I think that, we have to look at what do we as a society view as an appropriate role for industry? And where do we look when we would like to see new products and services being developed? That is not typically the role that we look to academic investigators, scientists, engineers for, nor is it the kind of thing that we look to the government for. It’s exactly what we look to private industry for. As individual taxpayers, we make very small incremental investments in basic research. And if some of that research actually ends up being of interest to industry, and of use to industry, they pay for the rights to obtain some of that knowledge, and then they invest their own capital to develop that basic information into real products and services. So, I see that as a completely appropriate use of public funds.

JOHN HOCKENBERRY: And you think the taxpayers are getting a good deal here.

BARBARA HANDELIN: I think that we’re getting what we’re asking for. I think we want new medicines. We want new diagnostic devices. We want new capabilities --

JOHN HOCKENBERRY: And as taxpayers, we’re not looking to make a killing in the market, like, say, an investor who might have invested in Steve’s company is looking to make a lot of money if they bought your stock low and are looking to sell it high. Right, Steve?

STEVEN HOLTZMAN: Absolutely. I think we make, via a role as taxpayers, make the investment in the basic infrastructure of research, and then we assign to the private marketplace the role for developing it into the products and services. And in fact, one could imagine an alternative, a more socialistic type of arrangement, but if you look at the productivity over time, the capitalist system, for better or worse, actually is more productive in producing those medicines and services which in fact benefit the public.

JOHN HOCKENBERRY: Well, certainly new to capitalism, I mean, the Harvard endowment excluded, are the academic institutions that suddenly have this collaborative relationship with the scientists, and then with entrepreneurs such as yourself, Steve. Barbara, are colleges good custodians of the public trust, and of these kinds of products? Are they good at this sort of thing? Have they done a good job?

BARBARA HANDELIN: I think that we are actually in a state of pretty rapid evolution in this whole process of commercializing medical knowledge. And so, I would say that there is a small handful of institutions that has long track records from which to judge as to whether or not they are doing a good job. And so, therefore, I would say that for the most part, most academic institutions are still feeling their way in a field that provides them rapidly-increasing frequency of opportunities to translate intellectual knowledge base into intellectual property.

JOHN HOCKENBERRY: All right. Let’s talk about another issue that was raised in the story, and it’s, perhaps, is the most interesting one to me. Academic review. Academic scientific research is conducted in a very open environment, even given the back stabbing nature of competitive scientists, and we all know who we’re talking about here. But the process is open. Everybody sees everyone else’s research, they review it, it’s published, that sort of thing. When you get into a capitalist system, suddenly everything is proprietary, everything is a secret, information is not shared. Do we lose a safeguard in this kind of an environment, Barbara?

BARBARA HANDELIN: Do we lose a safeguard? Yes, I think that, in a very pure vision of, the world of research, the opportunity to verify one investigator’s findings by repeating those experiments or by expanding on those experiments, we lose some element of the overall fund of knowledge.

JOHN HOCKENBERRY: Well, let me directly address that to Steve, then. Does money on Wall Street chase the hype that comes out of some secret research, maybe that’s not, you know, reviewed in the full disclosure of an academic environment?

STEVEN HOLTZMAN: Yeah. I think, John, there’s a lot of mythology wrapped into your question. And it actually ties to your previous question to Barbara. We’re approximately eighteen to twenty years into the revolution in university-industry collaboration in biotechnology, spurred by the original legislation in the early eighties, where the goal was to unlock the societal benefit of all of those basic research dollars. Earlier this year, I served on a working group advising the head of the NIH on the issue of accessibility to research tools. And one of our findings was that the pendulum had swung very much in the other direction in terms of universities looking to their technology transfer operations as profit centers. For example, to have access to unrestricted funds for any use that they wanted, potentially such as dorms, as you described. And it seems to me that’s losing to the issue of accessibility and openness. Millennium Pharmaceuticals, my company, has over 250 academic collaborations. In all of those collaborations, there is a provision that there is no constraint on publication. It can be delayed for three to six months in order to file patents, but there is no respectable academic institution that’ll accept a violation of its fundamental mission to disseminate knowledge.

JOHN HOCKENBERRY: So it’s not an either-or situation. It’s not an open-shut situation. You’re more finding your way.

STEVEN HOLTZMAN: That’s exactly right. I think there are standards and norms that one agrees to when one agrees to the benefits of collaborating with the academy. And furthermore, I don’t think we should just think about this as dollars. Millennium entered into a very interesting, large-scale collaboration about a year ago, involving another pharmaceutical company, Bristol Meyers Squibb, another biotech company, Affymetrics, and the Whitehead Institute for Genomic Research, and what we saw there is that there were capabilities. Forget the money for a moment. Capabilities that were complementary in four organizations, which is going to allow for a range of research from the most basic to things which can eventuate in products, which will move forward the science in a way which would not be possible for any one of those, separate institutions to do by themselves.

[music]

JOHN HOCKENBERRY: All right. So hold on right there, Barbara and Steve. When we come back, I want to talk about gene patenting. A patent is something of the Holy Grail in basic research, and without patenting, the biotechnology business couldn’t survive. But what does it mean to own a gene? And who owns your genes? You. All you, out there. Answers when we come back after the break.

[music]

HOCKENBERRY : This is the DNA Files. I’m John Hockenberry. It may sound far-fetched, but a gene found in the human body can be patented. A single gene could be worth millions of dollars if it leads to the creation of a successful new drug, or a test for a genetic disease. But who gets to mine all these potential genetic riches? The owners of gene patents, that’s who. Biotechnology companies and academic institutions file hundreds of patent applications each year but the practice of patenting genes is highly controversial. Some people believe it’s morally wrong, others worry that it may slow down advances in medical research. Even so, as John Rudolph reports, the race to patent human genes is running at full speed.

CATHERINE DE SANTIS: I'm Catherine de Santis. I'm the Director of Corporate Communications and Investor Relations for Human Genome Sciences, Inc. — a Rockville-based pharmaceutical company, and we're just about to turn into the construction entrance for our pilot plant that is under construction.

JOHN RUDOLPH: Human Genome Sciences is on a roll. Revenues have risen steadily since the company was founded in 1993, and so has the size of its workforce. Human Genome Sciences, or HGS as it’s called, is a leader in discovering human genes ... especially genes associated with diseases such as hypertension, Parkinson’s disease and many others. At a plant being built in Maryland just outside Washington, DC, HGS plans to manufacture experimental drugs that are based on human genes.

CATHERINE DE SANTIS: It’s value is between 42 and 45 million dollars, and that includes the equipment

JOHN RUDOLPH: Using high powered computers, HGS scientists have determined the structure of thousands of human genes. Each gene in our bodies is comprised of a specific sequence of chemicals. HGS is one of many companies that search for these chemical sequences — identifying them, purifying them by isolating them from all other genes, and then determining how they may affect human health. The company uses this gene sequence information to develop new drugs.

WILLIAM HAZELTINE: I would describe ourselves as an emerging pharmaceutical company.

JOHN RUDOLPH: William Hazeltine is the president of Human Genome Sciences. He’s a former Harvard professor known for his work in sequencing the genetic structure of the AIDS virus. Under Hazeltine, HGS has compiled a huge computer database of gene sequences. Information in the database has already led to the discovery of experimental medicines .... drugs that would do things like grow new skin cells - helping wounds to heal more effectively, and grow new blood vessels - allowing people with heart disease to avoid coronary bypass surgery.

WILLIAM HAZELTINE: I actually, call it regenerative medicine, to draw upon the body's ability to repair itself, to create itself, to repair what's damaged by trauma, disease, or eventually, what gets worn down by age.

JOHN RUDOLPH: Making new drugs is exciting. It’s also expensive work that may not pay off for years. In the meantime HGS has other valuable assets that provide an immediate source of revenue — patents on human genes that HGS has found. Yes, a gene can be patented. Not in its natural state inside your body, but in a purified form. A 1980 U.S. Supreme Court ruling paved the way for patents on human genes if the gene has been isolated from all other genes, and if it’s been shown to have some new use. In other words, if it's been transformed into what many consider a man-made invention. A patent gives an inventor the exclusive right to develop his or her invention for about 17 years. HGS has made millions of dollars providing access to its database of patented gene sequences to other pharmaceutical firms.

WILLIAM HAZELTINE: It turns out we’re sharing that information with about twenty percent of the world’s pharmaceutical companies. Some of the largest companies in the U.S., Great Britain, Japan and Europe use this same data resource. They pay us, and they’ve paid us a considerable amount. It’s a funding platform that gives us adequate resources to develop our own drugs, and it’s funding for a very long time, possibly until the year 2025 which allows us to do what a company has to do, fail more than once, on its way to success.

JOHN RUDOLPH: Human Genome Sciences holds some 39 patents covering 50 human genes, and it has submitted applications for patents covering more than 2,000 genes that company scientists have discovered in human cells. William Hazeltine says patents are necessary to protect the c
ompany's discoveries from being exploited by its competitors.

WILLIAM HAZELTINE: In the case of the ability to regenerate blood vessels, what you actually put into the human being is the isolated human gene and the gene is the drug. It's vital to protect those opportunities with patents.

JOHN RUDOLPH: So far some 1,800 genes have been patented in the US. About a third of them from human cells, the rest from plants and animals. In addition, more than 5,000 applications have been submitted for patents on genes and pieces of genes. John Doll heads the biotechnology section at the U.S. Patent and Trademark Office.

JOHN DOLL: I think America right now is the number one country in the world in biotechnology, and I think a lot of the reason is, is that the patent system has been very friendly to the biotechnology community. We allow people to patent vaccines, therapies. We allow them to patent transgenic animals. We allow them to patent pieces of DNA. And this has allowed the inventors to secure their inventions and to protect them from other people from making and using them. And I think that's given them the opportunity to take their patents, to go to the banks and get the investment capital they need to continue this kind of research.

JOHN RUDOLPH: But while gene patents may have become the mothers milk of the biotechnology industry, many critics question the wisdom of allowing private ownership of human DNA.

STEWART NEWMAN: The question is should some private individuals own the gene sequence that's in your body and my body?

JOHN RUDOLPH: Biologist Stewart Newman is one of the founders of the Council for Responsible Genetics, a group that opposes patenting life in any form. Newman rejects the idea that simply isolating a human gene in a laboratory transforms it into a man-made invention that can be patented.

STEWART NEWMAN: It's a very peculiar thing because up until now, things that are part of nature and are directly extracted from nature are not considered to be patentable. The person who first extracted and characterized uranium, would not have been able to get a patent on uranium because it's a chemical element and it's considered to be part of nature. Somehow, this whole question has been finessed, in a way, that is very favorable to certain people who want to commercialize the products of biological research, and the Patent Office has been persuaded to permit patents on gene sequences, even though they may be unmodified or only slightly modified from their natural state.

JOHN RUDOLPH: Meanwhile other critics of gene patenting focus on more pragmatic concerns. The Hospital of the University of Pennsylvania is a huge, sprawling medical center near downtown Philadelphia. In addition to providing medical care, doctors and scientists here conduct extensive research into the relationship between genes and disease. But lately some of that work has become more difficult. Several months ago the University of Pennsylvania received a letter from a company called Athena Diagnostics. The company warned the university to stop conducting a genetic test for a condition known as late-onset Alzheimer's disease. Debra Leonard, who runs a university laboratory that does genetic testing, reads from the letter.

DEBRA LEONARD: (reading from the letter) ...I would like to advise you that Athena Diagnostics has acquired exclusive rights to certain tests in the diagnosis of late-onset Alzheimer's disease. We understand that the University of Pennsylvania may be offering a diagnostic test covered by this patent. Any such testing would infringe on the above patent under which Athena has exclusively licensed.

JOHN RUDOLPH: Leonard says this isn't the first time the university has been warned to stop performing a test because the gene involved is patented. Some research laboratories ignore these warning letters. They find legal loopholes that allow them to continue testing as they have in the past. Even so, Leonard argues that restrictions on who can perform genetic tests is slowing the pace of medical research.

DEBRA LEONARD: Fine, if the pharmaceutical company wants to hold the patent and collect royalties for us to be able to do the test and put that into the development of a therapy that will help these patients, do it. But don't prevent laboratories from competing to be able to create different ways of diagnosing this, because it's an evolutionary process. And by preventing multiple laboratories from doing the test development, and performing that test, you're preventing all the knowledge that comes from that process.

JOHN RUDOLPH: In other words, Leonard says, patents lead to secrecy. And in medical research where the free flow of information has often led to new discoveries, secrecy is a bad thing. In a deliberate attempt to keep genes from being locked in private hands, some companies, universities and government agencies publish newly discovered genetic sequences on the Internet. One of the leaders in this effort is The Institute for Genomic Research, headed by Dr. Craig Venter. Venter once worked in partnership with Human Genome Sciences, helping the company develop gene sequencing techniques. He broke off the relationship in 1997, partly because he disagreed with HGS’s approach to gene patenting.

CRAIG VENTER: What we're going to be doing is making the human genome unpatentable by making and putting all this data in the public domain. People have raised a lot of concerns how we can have an effective business strategy on this, while the fundamental concern is, we felt it was unethical to generate all this information and use the paradigm that's out there, trying to make money by keeping it all secret, and charging people just to get access to this secret information.

JOHN RUDOLPH: Using new high-speed gene sequencing machines, Venter has pledged to develop a detailed analysis, or map, of all human genes by the year 2001. He says he plans to sell access to his gene map to anyone who pays a modest fee. The cost is likely to be much less than the millions of dollars Human Genome Sciences charges for access to its private gene sequence database. But despite this challenge and the ethical arguments against gene patenting, HGS president William Hazeltine says it’s a practice based on a firm legal foundation.

WILLIAM HAZELTINE: Human genes have been found to be the subject of patentable material for the last twenty years, or almost twenty years. It's been litigated all over the world. And the consensus of the legal community, scientific community, medical community, and even most medical ethicists, is that, if you have isolated from the body, and made a useful invention, you have the right. If you are using that information for health, there is no reason you shouldn't do it, and there is no reason you shouldn't patent it.

JOHN RUDOLPH: Much of the U.S. biotechnology industry operates as though the issue of patenting human genes has been permanently settled. But how well is the patenting process is working? It’s hard to say. Nearly two decades after Congress and the courts cleared the way for genes to be patented very few products based on human genes have made it to the market. What’s more, critics of gene patenting have not gone away. A small but vocal group continues to question the system that allows private ownership of human genes.

JOHN HOCKENBERRY: I’m John Hockenberry. We’re back in the studio with Steven Holtzman, Chief Business Officer of Millennium Pharmaceuticals, and Barbara Handelin, President of Handelin Associates, a private consulting practice. Steve referred earlier in the hour to the idea that for eighteen years we’ve been doing this biotech collaboration and patenting and all that. Barbara, why is it that after eighteen years of, of patents, the public still is absolutely in the place where this is an ethical problem? You patent genes, you’re commodifying human beings, you’re turning them into products. Why are we there, and you seem to be somewhere else?

BARBARA HANDELIN: Well, I think that the answer to that lies in perhaps a thin understanding of what the utility of owning a gene actually is. So, let’s suppose that by owning a gene, one could directly profit from it; one could literally sell the gene itself. If we put genes into a bottle and sold them to you at your local pharmacy, that might be a more close alliance of reality and truth. But in fact, what we are protecting when we provide patents on genes, we are merely providing the protection for the patent holder to be able to make many further investments to derive something useful out of that gene. So it’s not a direct use of the DNA that came out of my cells or your cells or any other individual. It’s not making use of that material. It’s making use of that information. And therefore, it is not an exploitation of my personal biology.

JOHN HOCKENBERRY: In-, in theory. But let me ask Steve Holtzman, these things are moving targets, Steve. I mean, in-, in the early part of this century, in the early days of photography, the idea that somebody owned their image was perceived as some sort of backward, you know, cave-people notion. Now, uh, you know, it’s common for people to enforce ownership of their image in magazines and the media.

STEVEN HOLTZMAN: You know, I think you’re right when you asked the question at the beginning of this segment, Why do people react as they do? . It’s built deep into our language, the idea that in the patent law we talk about compositions of matter, and people who are anti-patent say, We’re more than compositions of matter. And of course, we are. We are more than compositions of matter, and so what’s at stake here is-.

JOHN HOCKENBERRY: Happy to hear it, happy to hear it, actually.

STEVEN HOLTZMAN: Yeah. What’s at stake here is our concepts of our self-identity.

JOHN HOCKENBERRY: All right. And I want you to hold onto that thought because the question of ownership, in some places, particularly in the state of Oregon, has moved far beyond the world of intellectual debate over DNA right into practical legislation. We have this report from Scott Schegel.

SCOTT SCHLEGEL: With corporations claiming ownership of genetic material and getting patents to protect that ownership, it might leave you wondering who owns your genes? You probably think you do. But every time we donate blood, have a throat culture at a doctor's office, even when a hair stylist combs our hair, we give away our genetic material without knowing for sure what will be done with the information it contains. When DNA is tested to diagnose a medical condition or establish paternity, the information revealed could be used to help or harm us. In the absence of a comprehensive federal law, some states have made their own laws to protect genetic privacy.

(sound of DNA lab)

SCOTT SCHLEGEL: At the DNA diagnostic lab in the genetics department at Oregon Health Sciences University in Portland, technicians in white lab coats quietly prepare DNA samples for testing. Brad Popovich runs the lab and teaches molecular and medical genetics. He says this is one of the largest facilities in the world where genetic information is extracted from DNA samples.

BRAD POPOVICH: It can be anything from neurological diseases such as Huntington's Disease, to causes of learning impairment, to causes of muscular dystrophy, cystic fibrosis, hemophilia, literally, you name it.

SCOTT SCHLEGEL: In 1995, Popovich helped write an Oregon law that makes a person's DNA their private property. There were reports that some employers and insurance companies were discriminating against people based on information revealed through genetic tests.

TED FALK We were trying to imagine what sort of privacy issues would result in the future from the explosion of genetic testing technology.

SCOTT SCHLEGEL: Ted Falk is an attorney for Qualmed Oregon Health Plan. He also holds a doctorate in philosophy, specializing in bioethics.

TED FALK: We didn't want individuals to fear getting a genetic test, which might be helpful for evaluating their health or evaluating their children’s health or evaluating whether they should have children just because that person feared that the test results would be used to deny them employment, or insurance or some other benefit.

SCOTT SCHLEGEL: Oregon lawmakers thought they could prevent people from suffering discrimination based on genetic test results, by giving that information the broad protections state law gives private property. Now, if someone wants your genetic property in Oregon they have to get your informed consent, and you have a legal right to ask for compensation. But some bioethicists think making genetic information your property is misguided. Professor Patricia Backlar is a member of the National Bioethics Advisory Committee. She also teaches bioethics at Portland State University.

PATRICIA BACKLAR: What we are really talking about here is the importance of informed consent before this information, which is private and to an individual can be given out, because that information may cause harm... And I am very interested and concerned about protecting that information. But I think that if you use the concept of property in order to protect it, it's going to be a very mischievous way of protecting it, because then you're going to start to worry about buying and selling.

SCOTT SCHLEGEL: Backlar says turning DNA into property opens the door to exploitation of vulnerable people. Bioethicists think it's possible to protect the confidentiality of donated material without inhibiting genetic testing. Others share Backlar's concern about making DNA private property. Historically academic institutions and biotechnology companies have relied on voluntary and free contributions of genetic material from donors.

JOHN KELLER: We would face several thousand individual negotiations for every discovery. I'm not sure what the grand total in legal fees would be for that, but I'm sure it would be impressive.

SCOTT SCHLEGEL: John Keller is a Vice President with Smith Kline Beecham, one of the many pharmaceutical research companies that oppose making genetic information private property.

JOHN KELLER: So before even initiating a research study, you would find yourself having to have some certainty that you had reached a contractual conclusion with every single research participant and that would probably delay the initiation of a study for an untold number of years. It sounds extreme, but when you're talking about how many participants there are in a study and how many potential outcomes there are, the level of negotiation in that bargain becomes basically impossible to contemplate.

SCOTT SCHLEGEL: And Keller says Oregon’s attempt protect genetic privacy has created another problem.

JOHN KELLER: Property law has really not been applied to this type of information before. So now we are faced with a law where we could, for example, have to track an individual sample through a complex research procedure where that sample is mixed with thousands of other samples... and somehow we would have to be aware of property rights tracking to some small piece of information which contributed to that overall set. And as researchers, we have no idea how to do that.

SCOTT SCHLEGEL: Keller says these financial and logistical problems could have a chilling effect on research in Oregon. Genetics researcher Brad Popovich says. if there's been a chill, Oregon Health Sciences University hasn't felt it.

BRAD POPOVICH: The last thing that we intended to do is to, in any way shape or form, to impose any types of restrictions on biomedical research. What we wanted to be able to say is that anybody who participates in biomedical research, is absolutely protected from experiencing discrimination in terms of employment or insurance, because of genetic testing.

SCOTT SCHLEGEL: Oregon is the first state to give DNA private property status. Supporters of the law hope it will be used as a model for federal legislation to protect all Americans.

JOHN HOCKENBERRY: In our final segment, I’m John Hockenberry. We’re back in the studio and I’m with Steven Holtzman, Chief Business Officer of Millennium Pharmaceuticals, and Barbara Handelin, President of Handelin Associates, a private consulting firm. Barbara, this idea of ownership of DNA. As we get into the realm of where, you know, you can patent cell lines, when you can actually get enough information, enough genetic information, to clone an organism and to clone a person, but could you actually own a patent on a person if you developed the ability to clone them?

BARBARA HANDELIN: I suppose that is potentially true. It may already, in fact, exist.

JOHN HOCKENBERRY: I imagine your response to that, Steve, would be all you own is the process. You don’t own the person. Right?

STEVEN HOLTZMAN: Well, actually, specifically, the Patent Office when it came out with its directive to allow patents on higher organisms, specifically said, Of course, there could not be patents on human beings because we have prohibitions on slavery. That is ownership of persons , number one. Number two, I have the good fortune of serving on the National Bioethics Advisory Commission, and when we wrote the report on Dolly to the President on cloning, we specifically said the issue was not really an issue of ownership. The issue is the control and regulation of research. Patents or ownership, are not where we in the United States control what is allowed to be done. There can be patents issued on horrific things. It doesn’t mean that those horrific things can then be made, used or sold.

JOHN HOCKENBERRY: It’s kind of scary, what you’re describing, that you, because of your experience in the biotech field, have developed an awe for the sense of complexity about these issues, whereas the public over the same eighteen years has devolved into a sense that it’s a simple matter of pushing buttons, that there’s less complexity, in the public view of biotech, and that that-, being at odds in that way seems to be, a difficult situation, as society moves forward.

STEVEN HOLTZMAN: I agree with that, and that, unfortunately, members of the industry, members of the academy, members of the public press, contribute to it. When we say, We found the gene for this, for obesity, the gene for intelligence.

JOHN HOCKENBERRY: But scientists push that sort of thing. Come on.

STEVEN HOLTZMAN: Absolutely. They push it. And industry pushes it. And the press pushes it. And what we as a society, and I see this kind of program is contributing to it, is a more enlightened discourse for all of us to engage these issues, so we don’t fall back into the kind of genetic determinism which is the precondition, that simplistic belief is the precondition, for the kind of eugenic, evil practices that one is concerned about.

JOHN HOCKENBERRY: What’s the industry’s reaction to the idea of self-ownership of DNA, Barbara?

BARBARA HANDELIN: Well, the concern about self-ownership of DNA s a very, very important one for the future of the industry and the future of medical research. I think what we lose sight of when we begin to have an attitude of absolute and total proprietary ownership over our tissues, is that we forget that we have the opportunity to contribute to a greater good. And a refusal to participate, even passively, in the conduct of medical research, to me is a-, a path that I would hate to see us walk down as a society.

JOHN HOCKENBERRY: Although, that probably means there’s some biotech money lobbying against the law in Oregon at this moment. Now, we just have a couple of moments left, and I want to ask you both a very simple question. There’s a famous quote in the patenting world, when Jonas Salk was asked who would own the right to the polio vaccine, he asked, Could you patent the sun? What do you think he’d say if he lived today, Steven Holtzman?

STEVEN HOLTZMAN: I think he’d have a more sophisticated view about what is patentable. Nature, as it stands, is not patentable. Um, and I think reflective of that, Jonas Salk in his later years was involved in starting biotech companies because he saw the potential of industry working with the economy in order to realize his goals.

JOHN HOCKENBERRY: Barbara Handelin? Final thought?

BARBARA HANDELIN: Yes. I think that as we have moved in the development of drugs and diagnostics, this is a very powerful and important place to be. And that a visionary like Jonas Salk would see that we have to find a way to make useful use of that information while protecting our basic sense of humanity and self.

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JOHN HOCKENBERRY: Steven Holtzman and Barbara Handelin, thank you very much for joining us.

STEVEN HOLTZMAN: Thank you.

BARBARA HANDELIN: Thank you, John.

JOHN HOCKENBERRY: Steven Holtzman is Chief Business Officer for Millennium Pharmaceuticals. Barbara Handelin is the President of Handelin Associates, a private consulting practice that gives advice on planning to entrepreneurs in the biotech field. I’m John Hockenberry. Thank you all for joining us this hour. This is the DNA Files.

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Today’s program, Genetics and Biotechnology - DNA in the Marketplace was produced by John Rudolph and Loretta Williams. Feature producers included Scott Shlagel and Graham Smith. The shows was edited by Anne Donohue and engineered by Robin Wise. The DNA Files executive producer is Bari Scott. The project director is Jude Thilman. Managing Editors of The DNA Files are Loretta Williams and Catherine Stifter. Production manager is Catherine Gollery. Technical Director is Robin Wise. Adi Gevins is Director of Research and Creative Consultant. Sally Lehrman is Content Consultant. Original music composed and performed by Bill Frisell. Introductory Feature produced by John Rieger and edited by Gary Covino.

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