WASHINGTON (Nov. 2, 2022) — A new report published today by senior fellow in technology and innovation policy, Charles Duan, examines concerns around innovation in the medical diagnostics industry in light of Mayo Collaborative Service v. Prometheus Laboratories, Inc, a Supreme Court decision that held a diagnostic correlation between a blood test result and a treatment regimen was unpatentable. Critics of the decision claim it will devastate the biotechnology, personalized medicine and medical diagnostic fields. These concerns have led to legislative proposals to overturn the Supreme Court outcome and make diagnostic methods patent eligible.

This study analyzes the nature of these concerns, including claims that venture capital investors will be deterred from investment in biotechnology and medical device industries and pushes back against them with the finding that, “[f]or clinical diagnostics, the most important driver of innovation does not come from investment-backed firms […] but from the laboratories themselves as they seek to expand their service offerings.”

Relying on publicly available data from federally hosted databases of testing services, Duan establishes that there is substantial growth in a key sector of laboratory-developed tests (LDTs) following the holding in Mayo in 2012: genetic testing and molecular diagnostics. “The number of genetic tests developed has increased at least sevenfold between 2013 and 2022,” he writes, “as has the number of unique genes with developed tests.” He also notes that “[t]he vast majority of these, at a ratio of over 500 to 1, are LDTs rather than commercial tests.”

Importantly, these findings “show that an important dimension of innovation in the diagnostics industry, LDT development, is largely ignored in the policy discussion of patent eligibility law, and needs to be incorporated into that discussion.” Further, Duan argues that there is a broader issue in patent law as it fails consider “user-innovators,” which Duan describes as “those individuals and firms that innovate not so much to profit off the sale of proprietary technology as to use that technology to enhance their own businesses and practices.” This study, then, highlights the importance of user-driven innovation and how it intersects with intellectual property law.

Duan concludes by emphasizing that, moving forward, growth in LDT development must be accounted for in “any changes to patent eligibility law that may diminish ongoing rapid development in this technological space.”