Patents reduce competition and substantially increase prices in health care

Further, critics against gene patents argue that such patents, when given to a single company or multiple companies, for instance, could prevent competitors from offering substitute tests and/or testing services.208 Under this view, exclusive rights obtained through patents can lead to increased “cost[s] of testing, hampered verification of test results,” and fewer substitute tests commercially available to consumers.209 At such a crossroads, it appears that competing entities attempting to enter the testing market must conduct a cost-benefit analysis of whether they wish to negotiate (i.e., pay) for patent licenses, which could be costly, or stay out of the market altogether. Because “diagnostics produce relatively low profits,”210 the latter is more likely to occur. Here, the lack of competition, or even the existence of a monopoly, could increase pricing for tests due to the absence of substitute options on the market. In other words, companies could charge more for each test simply because they can; there is no incentive for them to make their products more affordable in the absence of competition. Then, the “Iron Triangle” predicts that an increase in price will decrease overall patient access to tests.211 This could further impact the quality of the available test either positively or negatively: quality could improve because companies with patent protection are given such a monopoly of the market that they can further invest funds into the research and development of better diagnostics; conversely, quality could decrease if the companies become complacent due to their exclusive market position and decide to cut corners in producing the tests. Overall, under this view, the consequence is that a lack of active competition due to excessive protection granted by isolated DNA patents could increase costs, which would likely reduce the number of patients able to afford genetic testing, and thereby decrease access to tests.