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Navigenics Agrees Not to Market Genetic Testing Services Directly to NY Residents

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By Turna Ray

This article was originally posted on Jan. 14.

In receiving clearance from the New York State Department of Health last week to operate as a clinical laboratory, Navigenics has agreed to not market its consumer genetic testing services directly to customers in the state.

In order to operate in New York, "Navigenics agreed to make certain concessions … by modifying the DTC portion of their business," Betty Kusel, deputy director of the division of laboratory quality certification at the NY Department of Health's Wardsworth Center, told Pharmacogenomics Reporter. Regulations for laboratories operating within New York are often considered by industry to be more stringent than requirements under the Clinical Laboratory Improvement Amendments.

The green light from the NY health department comes nearly two years after state regulators issued warning letters to 23 consumer genomics and genetic testing firms, among them Navigenics, Decode Genetics, and 23andMe, saying they must stop marketing their services directly to consumers, as well as obtain a permit to operate in the state. Last year, Department of Health officials further clarified that consumer genomics firms will be regulated in New York as clinical laboratories, even though they might not analyze biological samples in house [see PGx Reporter 03-18-2009].

According to Kusel, the NY Department of Health has been in discussions with Navigenics for several years about the firm's regulatory status in the state, and the discussion changed somewhat after Navigenics purchased Affymetrix's clinical laboratory last year.

Initially, since Navigenics was sending biological samples from its customers to Affy for analysis, the NY health department in 2008 sent separate warning letters to Affy and Navigenics. Then last March, refocusing its resources toward being a platform provider, Affy transferred ownership of its clinical laboratory to Navigenics [see PGx Reporter 03-18-2009].

Once Navigenics garnered an in-house CLIA lab, its discussions with NY health regulators "morphed to be slightly different," Kusel said.

In order to gain the state license, Navigenics had to meet several requirements, including hire a doctoral-level scientist with expertise in genetic molecular testing, pay a $1,100 fee, and respond to deficiencies cited by inspectors with a plan of correction.

Most important, however, was Navigenics' conceding to not market its services directly to consumers, as clinical labs are forbidden from doing under state regulations. "They have acknowledged that DTC will not work for them" in New York, Kusel said. "They can only operate through physicians' orders."

Upon initially receiving warning letters from state health regulators, several DTC genomics firms argued that they weren't engaging in DTC marketing since they processed customers' gene scan orders through state-licensed physicians employed in house. However, this line of reasoning didn't work in New York.

Under its agreement with the NY health department, a consumer who wishes to learn his or her genetic risk for various diseases must independently visit a physician who then can order a Navigenics gene scan.

"The physician has to be known to the client who wants to pay" for the gene scan, Kusel explained. Additionally, Navigenics can provide the customer with a list of state-licensed physicians who are familiar with its services by, for example, taking a company-sponsored course. Then, it will be up to the customer to visit the physician, who will then order the tests.

Ultimately, the restriction of DTC advertising in New York may not impact Navigenics too severely as the company is already well connected with physician networks and is technologically equipped to incorporate its services into a physician's workflow.

In 2008, Navigenics partnered with MDVIP network, a collective of physicians spread across 25 states and Washington, DC, who practice preventative and personalized healthcare. Under the collaboration, MDVIP doctors will use the Navigenics testing service to identify an individual’s risk for developing conditions such as type 2 diabetes, cancer, heart attack, and celiac disease [see PGx Reporter 12-10-2008].

A search of MDVIP's website shows there are a number of doctors in the network operating out of New York, and thus would be familiar with Navigenics' services.

Furthermore, Navigenics last year launched an online portal that allows doctors to access their patients' genetic data and introduced a lower-priced, pared down version of its genetic testing service for gauging peoples' genetic predisposition for 10 common conditions [see PGx Reporter 02-04-2009].

Kusel added that the NY Department of Health's regulatory discussions are still ongoing with 23andMe.

The company has not filed an application for a license to operate in the state, Kusel said.

23andMe's website informs potential NY customers that they can only purchase a gene scan under state law if they perform the collection of their saliva sample outside of the state. This can be readily done in a neighboring state, such as New Jersey, for instance, which has no restrictions on DTC marketing of genetic tests.

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