Myriad gets first big rival

A number of companies are planning to jump into the lucrative breast cancer genetic testing market and are promising lower prices. But they face legal battles with the company that previously was the sole provider of these tests.

Madison, N.J.-based Quest Diagnostics, one of the largest clinical laboratories in the U.S., started offering BRCA testing last week. It is the largest company to begin offering genetic tests that identify the BRCA1 and BRCA2 genes—which are associated with higher risks for hereditary breast and ovarian cancers—since the U.S. Supreme Court in June ruled that Myriad Genetics' patents for naturally occurring DNA were invalid. Until the ruling, Salt Lake City-based Myriad Genetics was the sole provider of BRCA testing in the U.S.

The Supreme Court decision was expected to open the BRCA testing market to new entrants that likely would charge less than the $3,340 price tag on Myriad's tests. Quest plans to charge $2,500 for genetic tests that identify BRCA1 and BRCA2 gene mutations. It also is offering three other related tests for $500 each.

Myriad's financial filings show BRCA testing generated 75%, or $460 million, of the firm's revenue for its fiscal year ended June 30.

Patient groups and physicians have said they expect to see more price decreases as the BRCA testing market becomes more competitive, as well as testing quality improvements.

But at least two smaller labs that said they planned to provide less-expensive BRCA testing—Ambry Genetics in Aliso Viejo, Calif., and Gene by Gene in Houston—have been sued by Myriad, alleging that their BRCA testing infringes on its patents.

The week before its Oct. 15 commercial launch, Quest filed a legal action in U.S. District Court in California seeking a declaratory judgment that it is not in violation of Myriad's patent claims.

Myriad is trying to reassure investors and providers and encourage use of its tests. “Our biggest advantage is that Myriad's quality provides healthcare providers with the confidence they need when providing hereditary cancer testing for patients,” said Ronald Rogers, a Myriad spokesman.

Myriad's lawsuits have chilled other potential market entrants, including Pathway Genomics and Genome Liberty.

Karuna Jaggar, executive director for Breast Cancer Action, one of the plaintiffs in the Supreme Court case, said her group supports increased competition but providers and patients need to pay close attention to the quality, accessibility and affordability of testing, as well as whether companies are overselling the need for and benefits of testing.

“We need to maintain some appropriate skepticism and rigor about any new test that comes on the market,” she said.

Follow Jaimy Lee on Twitter: @MHjlee