The Impact of Prometheus on the Personalized Medicine IP Landscape

In the Prometheus case in early 2012, the Supreme Court struck down two patents covering a method for using blood tests to determine the dosage of thiopurines, which are used to treat gastrointestinal problems. The Court ruled that the patents are based on a law of nature and are therefore not patentable. The implications of that ruling could be considerable. “It is clear that personalized medicine and diagnostics could be significantly affected by the Prometheus decision, based on decisions regarding patents in similar fields,” says Matt Becker, co-chair of Axinn, Veltrop & Harkrider LLP’s intellectual property practice.

The Supreme Court's Prometheus ruling has had a significant influence on the patent landscape in the personalized medicine space. Image from Flickr user KeithBurtis.

Shortly after the Prometheus ruling, the Supreme Court remanded a different patent case, Association for Molecular Pathology v. Myriad Genetics, to the Court of Appeals for the Federal Circuit. In August 2012, that court reaffirmed the patents of two genes associated with breast and ovarian cancer, while denying the company’s patent methods used to analyze DNA sequences. Following that, the Supreme Court decided to revisit the Myriad case to establish whether human genes are patentable subject matter. The decision should shed light on the distinction between inventions and natural phenomena. Going forward, the Myriad and Prometheus cases are poised to be important for the burgeoning field of personalized medicine.

For instance, on November 20, 2012, the Federal Circuit issued a decision in PerkinElmer, Inc. v. Intema Ltd. using Prometheus to invalidate patents. “The patents at issue were for methods of determining whether a pregnant woman is at increased risk of having a fetus with Down’s syndrome,” Becker says. The patents involved conducting two screening tests using separate markers at separate times in the pregnancy. The tests combine the measured levels to determine risk by comparison of the measured levels with known frequency distributions in affected and unaffected pregnancies, Becker explains. “The court found relevant that the claims did not require the doctor to act on the calculated risk. The court also noted that the Myriad decision supported the outcome because the patentability in Myriad came from the use of host cells that did not occur naturally, whereas the diagnostic method in that case did not involve any patent-eligible application of the law of nature. The court also found that the claims failed the ‘machine or transformation’ test.”

The ruling in another case on March 30, 2012, SmartGene, Inc. v. Advanced Biological Labs, SA, also invalidated a patent covering a method for selecting a treatment regimen for patients with a known disease or medical condition. Specifically, the patent covered the use of a computing device to rank therapeutic treatments based on inputted patient information. In SmartGene, the court in the District of Washington D.C. found that the claimed methods “do no more than describe just an abstract mental process engaged in routinely, either entirely within a physician’s mind, or potentially aided by other resources in the treatment of patients.” In addition, the court found the claims failed the “machine-or-transformation” test.

Becker also points to Aria Diagnostics, Inc. v. Sequenom, Inc., a case in the Northern District of California, which denied a preliminary injunction in part because the accused infringer raised a substantial question as to validity of the patents under Prometheus. “The patent was to a method of using cell-free fetal DNA in the blood of a pregnant woman to conduct non-invasive prenatal testing,” Becker explains. “The defendant argued that all the patent claimed was the discovery that fetal DNA naturally exists in the mother’s blood, combined with conventional techniques of amplifying and detecting that DNA,” he says. “The court rejected the patentee’s argument that the claims ‘recite specific steps that confine the claims to a specific, useful application’ because the evidence showed that the techniques used were standard. That opinion was issued July 5, 2012.

A notable post-Prometheus medical case that did not apply Prometheus to render claims ineligible is Classen Immunotherapies, Inc. v. Biogen IDEC. In that case, Judge Zito in the District of Maryland denied a motion to dismiss based on Prometheus, Becker explains. “The patent [covered] a method of choosing an immunization schedule for infants to minimize the likelihood of developing chronic immune mediated disorders or common infectious diseases,” he says. “The court relied on an earlier Federal Circuit decision on the patents, which stated that the physical step of immunization on a determined schedule rendered the claims patentable, to find that the claims could not be dismissed under Prometheus.” In a decision issued August 9, 2012, the court observed that there was, at that time, no information in the record that allowed it to conclude that the claims involved only routine or conventional activity, Becker explains. “The court went further to suggest that the claims are safe under Prometheus specifically because they required immunizing according to a particular schedule in addition to data-gathering,” he says. “It is unclear whether the court viewed its opinion as deciding the Prometheus issue permanently, or just at that stage of the litigation, where no record had been developed, and whether the claims would be patentable if the concrete step of requiring immunization was later shown to be conventional or routine.”

 Brian Buntz is the editor-at-large at UBM Canon's medical group. Follow him on Twitter at @brian_buntz

The Power of a 20-Minute Prototype

Many medical device prototypes are complex, highly technical things. For instance, an early prototype for, say, a catheter might already be functional in an animal lab. "By the time you get to that level of resolution of the prototype, you have already made all kinds of assumptions," says Stacey Chang, associate partner and director of IDEO's Health & Wellness practice. Those assumptions might not prove to be right in the longer term. For that reason, this method of prototyping can be costly--in terms of time and money.

An early prototype for the Gyrus ENT Diego surgical tool illustrates how simple prototypes can be.

To be valuable, prototypes don't necessarily have to be highly refined. In fact, crude medical device prototypes made of materials such as construction paper, tape, and pipe cleaners can be extremely useful, Chang says. Prototyping can be employed as a tool for creative discovery, he adds. To prove that point, Chang, along with IDEO's Brian Mason, lead of medical products group and Jesse Fourt, senior program lead will lead a workshop at MD&M West on February 12 at 10:10 a.m. Attendees will be asked to develop a prototype in 20 minutes.

It's not the first time that IDEO has facilitated such a workshop. When attendees of similar workshops have been asked to build a medical device prototype in less than a half hour, their first response has often been disbelief, Chang says. But after the prototypes were developed, their power often becomes obvious. "After we have some raw prototypes from the audience, we'll ask them to get feedback on it from other people in the group," he says. "What [attendees] realize is you can really advance your understanding about the user scenario and the operation and use of the device really significantly--even with a 20-minute prototype."  

This type of thinking is common in the software world, where iteration is obviously much easier and faster. Consider for instance the Lean Startup Movement and Agile Software development. But the same basic principles can also be applied to the medical device world--despite the fact that the medtech environment is much different. As Chang explains, the basic idea behind them applies broadly: "how do you get the minimally viable product so you can test its utility and function and viability before you start filling out all of the details and making it look sexy?" He remarks that early testers of such crude devices "tend to forgive [their] roughness because they understand the question you are trying to ask." And their feedback can go far in helping to answer that question.

Brian Buntz is the editor-at-large at UBM Canon's medical group. Follow him on Twitter at @brian_buntz

Related Content: Overcoming the "Dufus Factor:" Designing Wearable Devices People Actually Want to Wear

This Week in Devices [1/4/2013]: WIll 2013 be the Year of Digital Health?

This Week in Devices [1/4/2013]

Smartphones could be a danger to medical devices. Is 2013 going to be the year of the digital health boom? A roundtable discussion of a big long-term risk for medical device investors.

 
Will 2013 Be the Year of Digital Health?
The signs are in the air. But will 2013 be the year that patients embrace the quanitied self and the new digital health movement? [Forbes]
 
Smartphones vs. Medical Devices
Barnaby Jack wants to make you aware of the dangers of smartphones – particularly how they can be used to attack implanted medical devices. How real is the threat? Real enough to inspire an episode of Homeland [Vanity Fair]
 
 
Robotics a Long-term Risk for the Medical Device Industry
Analysts at The Motley Fool conduct a roundtable discussion of medical robotics companies and how medical robotic technology represents a long-term risk for investors. Is it a good investment or just a fancy way of attracting patients to hospitals? [The Motley Fool]
 
 

Preparing for the Acute Care Environment of the (Near) Future with Wireless

Every hospital emergency department "should brace itself for a never-ending rush hour," recently advised noted ER doc Wesley Curry, MD. Curry, who is the CEO of the acute care management firm CEP America, estimates that emergency department visits in the United States could exceed 200 million visits annually by 2020. He draws his conclusions from detailed analysis of more than 80 emergency departments as well as several megatrends affecting the domestic healthcare infrastructure.

Wireless technology can help facilitate collaboration in acute care environments. U.S. Navy photo from Flickr.

Developers of medical devices that are used in the acute care ecosystem should consider how wireless technology could address these growing pains. In the not-too distant future, acute care environments will likely be completely wireless, says Stacey Chang, associate partner and director of IDEO's Health & Wellness practice. And in order to be relevant, medical devices will have to interface with that infrastructure. 

There are a whole host of ways wireless technology can help acute care environments, Chang says. Consider, for instance, how equipping an EMT with wireless technology can enable vital patient information to be sent to a receiving hospital before the patient arrives there, he adds. The hospital can begin preparing for the patient in advance by, for example, prepping the operating room or analyzing the patient's vital signs. Wireless technology has a lot of potential to improve the coordination of care in an emergency situation, he adds.

Stacey Chang

Wireless technology can also help on the other end of the spectrum where inpatients admitted to a hospital have been discharged from the ER and the ICU. In this scenario, teamwork between the various clinicians and hospital employees is vital. "There might be a doctor, a nurse, a social worker, and a caseworker," Chang says. "They are all assigned to these patients and they have to collaborate in an efficient way," he adds. "Here's a classic example of where wireless can help: after physicians do their rounds and issue orders, those orders have to be prioritized by a nurse. The nurse usually does that by paper and pencil in a notebook and that is prone to a lot of mistakes and mis-prioritization," Chang says. A mobile wireless system has a lot of potential to help nurses prioritize what matters.

Chang will share more thoughts on how wireless technology can improve acute care in an upcoming talk at MD&M West in Anaheim on February 13. "IDEO's gist on all of this is the technology is great, but if you are not actually solving the end needs of the different stake holders, then it is not actually all that useful," he explains. "I wanted to [illustrate] the different ways that technology gets delivered so people can think a little bit more about what they are actually trying to achieve as opposed to just making something wireless to eliminate wires and clutter."

Brian Buntz is the editor-at-large at UBM Canon's medical group. Follow him on Twitter at @brian_buntz.

Recalls, Regulations, and Approvals Round-Up [1-2-2013]: Home Use Devices and Zimmer PEEK Ardis Inserter

Welcome to the first RR&A Round-up. Here you’ll find news on recent regulatory events, as well as some exclusive discussions on the finer points of the implications for medical device companies. To kick off, we’ll go back to December to review some key recalls and regulations that came out last month.

Home Use Draft Guidance

On December 12, FDA released the Home Use Device Initiative to encourage safe development and use of medical devices in home settings. 

Included are steps that manufacturers can take to design and test devices for use in the home, and to develop user-friendly instructions (labeling) for home care recipients, consumers, and caregivers. The draft guidance is intended to improve the design and quality of home use devices to eliminate or reduce errors that occur during use. It provides recommendations that take into account the device user, the use environment, the device itself, and its labeling. The comment and suggestion period for the draft guidance ends in March. 

Class I Medical Device Recall: PEEK Ardis Inserter

Initiated by Zimmer Spine Inc., December 20, 2012

Zimmer Spine received reports of its PEEK Ardis Interbody Spacer breaking into fragments when too much lateral force was applied to the Ardis Inserter. If the Spacer breaks during implantation, surgical delays of up to 60 minutes could occur and health risks may include a tear in the thin covering of the spinal cord (dural tear), cerebrospinal fluid leakage, significant blood loss and nerve injury. Long-term health risks may include disability, dysfunction, or death.

In November 2012, Zimmer issued a Medical Device Correction memo to inform surgeons and hospitals of the problem and to provide updated precautions and surgical technique guidance to decrease the risk of implant breakage. In this memo, Zimmer Spine also indicated that on or about May 2013, a redesigned inserter would be available for use when implanting the PEEK Ardis Interbody Spacer.

On December 20, 2012, Zimmer modified its Medical Device Correction memo and initiated a voluntary recall of all 315 units of the PEEK Ardis Inserter. Surgeons and hospitals were instructed to immediately stop using the Ardis Inserter and to return them to Zimmer Spine. Surgeons and hospitals were warned that surgery could not be performed as intended without the use of the Ardis Inserter. Therefore the PEEK Ardis Implant System is unavailable for use until FDA clears a redesigned inserter.
 

Dune Medical Devices Receives FDA Approval for Breakthrough Cancer Detector

Today, FDA granted PMA approval to the MarginProbe System created by Dune Medical Devices Inc. MarginProbe is based on a proprietary technology created by Dune based on RF spectroscopy. By measuring tissue response to an electric field the device creates electromagnetic “signatures” that can be used to identify healthy and cancerous tissue in patients. MarginProbe has been demonstrated to improve surgeons' ability to identify what is called “cancer on the margin” and significantly reduce pathologically positive margins following a patient’s initial lumpectomy surgery.

 The MarginProbe System. Image copyright Dune Medical Systems

According to the Journal of the American Medical Association, roughly 60 – 75% of breast cancer patients undergo a lumpectomy procedure, in combination with radiation therapy, as their initial treatment. Tissue removed from a lumpectomy is analyzed for “cancer on the margin” - the presence of cancer cells on the margins of the removed tissue. If cancer is found on the edges of the removed tissue, there is a possibility that cancer still remains in the breast and the patient will have to undergo additional surgery. What becomes particularly critical in this stage is the turnaround time for pathology lab results (roughly one week) - time in which cancer may be continuing to spread.

In a press statement, Dr. Susan K. Boolbol, an investigator for the pivotal clinical trial and chief of breast surgery at Beth Israel Medical Center, says, “Up to this point our ability to assess the microscopic margin status in the operating room has been limited. Frequently, early-stage breast cancers are detected by mammography. This can make the process of achieving negative margins more challenging. Following their breast cancer surgery, telling a patient that they need more surgery can be an emotional issue for doctors and patients. This may result in tremendous anxiety and frustration.”
 
A FDA study found MarginProbe to be over three times more effective in finding cancer on the margin during lumpectomy, compared to traditional intra-operative imaging and palpation assessment. In a press statement Daniel Levangie, CEO of Dune Medical Devices, says, “The MarginProbe System was developed to address one of the longest standing unmet medical needs in the breast cancer surgical community. We have received resounding support from clinicians, advocacy organizations and patients alike, who have recognized the value of MarginProbe and intra-operative, real-time detection of cancer on the margin to potentially improve patient outcomes.”
 
MarginProbe has been available in Europe in 2008 and is currently in select locations in the U.S. With this new approval Dune Medical Devices expects to have the device nationally available in early 2013.
 
 

Chris Wiltz is the associate editor of MD+DI.

As Device Tax Takes Effect, AdvaMed Renews Repeal Efforts

 

The 2.3% medical device tax excise tax is now the law of the land. The tax, which will be levied on gross sales rather than profits, went into effect on January 1, despite attempts to repeal it or delay its implementation.

In June 2012, opponents of the tax took heart as the House voted to repeal it. Although prominent Democrats including Senators Amy Klobuchar and Al Franken (D-Minn.) have opposed the tax, efforts to repeal the tax or delay its implementation have thus far fallen short. In December, Obama voiced his support for the tax as a part of broader healthcare reform, saying that his health plan was going to be good for medical device companies. Obama added that the Affordable Care act will provide device companies with "30 million new customers." He continued: "It's going to be great for business and they are doing really well right now."

Many in the device industry have expressed their disagreement with that statement.

Opponents of the tax often point to the case of Massachusetts, which in 2006 implemented a universal healthcare law. For the most part, device companies based in the state have not seen an increase in profits following that laws implementation. The law firm McGuireWoods released a report in September that found that eight out of nine Massachusetts-based medical device companies it surveyed saw no financial benefit. Instead, most of them "saw relative underperformance."

As for the implications of the nationwide healthcare reform, AdvaMed president and CEO Stephen J. Ubl said in a prior statement that the organization "understand[s] the general point the President is making about the benefits of expanded coverage. For a variety of reasons unique to our industry, however, the net expansion from the ACA is likely to be minimal."

In a statement released today, Ubl, explained that AdvaMed's "[...] effort to repeal the medical device tax will continue." Ubl laments that the passage of the scaled-back fiscal cliff package did not address the excise tax. "We urge Congress to repeal the device tax as it returns to address the other pressing tax and budget issues facing the country, so that we can avoid going over the medical technology innovation cliff." The organization also supports broader corporate tax reform.

At present, AdvaMed's member companies are putting in place the accounting procedures necessary to comply with the tax, says Wanda Moebius, vice president, policy communications at AdvaMed. "As an excise tax, companies will have to start putting revenue aside to pay the tax every two weeks. Presumably, that will be effective on January 15."

"We are going to seek opportunities to repeal the tax in 2013," Moebius states. "We are still at this time assessing the legislative vehicles and the best path forward for that."

AdvaMed has also expressed disappointment in recent cuts to imaging and diabetes-related services that are a part of the fiscal-cliff package passed by Congress. On January 1, the House signed off on the Senate's fiscal cliff bill that includes $800 million in Medicare cuts to advanced medical imaging services. In addition, the House approved $600 billion in cuts for diabetic supplies. 

Brian Buntz is the editor-at-large at UBM Canon's medical group. Follow him on Twitter at @brian_buntz.

Fiscal Cliff Leaves Device Makers in a Bind…and in Limbo

The passage of a scaled-back fiscal cliff agreement late last week, contained little relief for medical device makers. Key issues remained unresolved, and cuts to medicare reimbursement, imaging, and diabetes disappointed various associations across the healthcare industry.

View a larger version of this image. Details about ITG's Hospital Executive research and a downloadable report can be purchased through ITG Market Research

A new report from ITG explores what hospital executives thought of the fiscal cliff and its impact for hospitals. Most executives who responded to the survey, which was conducted in Q4 of 2012 (before the fiscal cliff deal was ratified), predicted the difficulties.

Of the respondents, 47% said they were mildly concerned and 49% said they were significantly concerned. Issues brought up by those most concerned with the fiscal cliff included cuts to reimbursement, physician payment problems, and a reduction in elective procedures. The executives were right to worry.

Advamed released a statement today expressing its disappointment that some of the cuts in the package included imaging and diabetes related services. “We believe these cuts will hurt access to important technologies that Medicare beneficiaries depend upon,” said Stephen J. Ubl, president and CEO of AdvaMed in the statement.

Several issues were decided in this round of the fiscal cliff deal that could have implications for hospitals and medical device makers. Most of these (outlined at the end of this article) focus on reduced reimbursement for various therapies, adjustments to how overpayments are recouped, changes how imaging equipment is reimbursed, and enables greater competition for diabetes test strips.

The fiscal cliff also hurts hospitals more than doctors, according to the Washington Post. One key issue in the fiscal cliff was physician payments. Congress temporarily fixed the problem with doctor's salaries by introducing about $15 billion in cuts to reimbursement. Essentially, the deal solved one aspect of healthcare at the expense of another. 

Other budget issues folded in the fiscal cliff have been given an extension. Spending cuts through sequestration, which includes user fees paid to FDA, among other sources, will be decided by Congress in February.

In addition, although parts of Obamacare were repealed, the device tax was not among the them. Ubl said that Advamed would not give up its campaign for repeal of the device tax. “We urge Congress to repeal the device tax . . . so that we can avoid going over the medical technology innovation cliff.” He vowed, “The effort to repeal the medical device tax will continue.”

Medical Device-Related Cuts in the Fiscal Cliff Deal

  • Recoup of past overpayments to hospitals made as a result of the transition to Medicare Severity Diagnosis Related Groups (MS-DRGs). Savings: $10.5 billion. 
  • Reprice End Stage Renal Disease (ESRD) payments to take into account changes in behavior and utilization of drugs for dialysis. Savings: $4.9 billion. 
  • Reduce reimbursement payments for therapies when multiple therapies are provided on the same day. Savings: $1.8 billion. 
  • Equalize payments for stereotactic radiosurgery services provided under Medicare hospital outpatient payment system. Savings: $0.3 billion. 
  • Increase the utilization factor (the ratio of time that a piece of equipment is in use to the total time that it could be in use) used in the setting of payment for imaging services in Medicare from 75% to 90%. Savings: $0.8 billion. 
  • Apply competitive bidding to diabetic test strips purchased at retail pharmacies. Savings: $0.6 billion. 
  • Reduce the payment rates for ambulance services by 10% for individuals with ESRD obtaining non-emergency basic life support services involving transport. Savings: $0.3 billion. 
  • Increase statute of limitations for recovering overpayments from three to five years. Savings: $0.5 billion. 
  • Eliminate funding for the Medicare Improvement Fund. Savings: $1.7 billion. 
  • Rebase Medicaid Disproportionate Share Hospital (DSH) payments to extend the changes from the Affordable Care Act (ACA) for an additional year. Savings: $4.2 billion. 
  • Repeal Community Living Assistance Services and Supports (CLASS) program established by the Affordable Care Act. This provision has no scoring implications. 
  • Establish the Commission on Long Term Care to develop a plan to establish, implement, and finance a high quality system that ensures the availability of long-term services and supports for individuals. This provision has no scoring implications. 
  • Adjust coding intensity to reflect differences in coding practices between Medicare fee-for-service and Medicare Advantage. This provision increases this coding intensity adjustment. Savings: $2 billion. 
  • Rescind all unobligated CO-OP funds under section 1332(g) of the Affordable Care Act. Savings: $2.3 billion

More On the Fiscal Cliff

Cuts to User Fees and CDRH Funding Threaten Medical Devices

What the Election Results Mean for Medtech

Obama’s Legacy: A Tougher FDA and the Device Tax