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NY State Health Department Regulating DTC Genomics Firms as Labs; No More 'Spit Parties'


Despite claims by direct-to-consumer genomics companies that they should not be regulated as clinical laboratories because they provide educational information about genetic risk, the New York State Department of Health is regulating such facilities as laboratories, according to a state health official.

"We believe it's consistent to say that these entities that will obtain raw data from the analytical testing facility, and generate a report that would go to the ordering practitioner, are a laboratory," Ann Willey, director of the New York State Department of Health Office of Laboratory Policy, said at a meeting of the HHS Secretary's Advisory Committee on Genetics, Health, and Society last week in Washington, DC.

"We consider these data-management facilities no different than laboratories," Willey added in her presentation updating the advisory committee on New York’s stance on DTC consumer genomics firms.

Willey's comments come one year after the New York State Department of Health sent letters to 23 consumer genomics and genetic testing firms saying they must obtain a permit and that a state-licensed physician must order the tests.

Regulation of DTC consumer genomics firms is a new and evolving area for state and federal regulation. Most states have limited or no guidelines on DTC marketing of genetic tests. The US Food and Drug Administration has said it is watching the burgeoning industry closely, but has yet to issue federal guidance on the sector.

New York State regulations for laboratories operating within the state are considered within the industry to be more stringent than CLIA [see PGx Reporter 06-25-2008]. According to industry observers, New York regulators' thinking on DTC genetic testing can have broad impact on the regulations in other states. To date, however, the state's Department of Health has not disclosed much detail regarding its thinking in this area.

In the absence of federal guidelines on DTC genetic testing, many consumer genomics companies have argued that they should not be regulated as providers of medical tests because the genetic risk information they sell to consumers is for education only and not meant to be used to make medical decisions.

However, one of these shops, 23andMe, recently began offering BRCA testing for hereditary breast and ovarian cancer — a test that most physicians believe carries serious clinical implications [see PGx Reporter 02-18-2009].

Another DTC genetics shop, Navigenics, began marketing a version of its service to doctors in an effort to incorporate genetic risk data into individuals' annual physical exams [see PGx Reporter 02-04-2009].

New York State law requires that all laboratories testing human specimens must first obtain a permit in order to operate in the state. The law also states that labs can only order tests at the request of a state-licensed physician, who is not employed or financially compensated by the company that will perform the test.

According to Willey, while a tested person can provide information to a laboratory, the lab must limit communication with the tested person to information provided through a “generic” website or educational materials provided at the authorization of a physician. "We want the labs to educate the practitioners about the tests available. … We want free education, free information, with one caution [against communication] between the lab and the [tested] person."

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The Big Four

Several personal-genomics firms working in states that allow DTC marketing of genetic tests employ physicians licensed in that state to order tests for their customers. This practice violates anti-kickback statues in New York restricting labs from offering physicians who order tests monetary payments or other kinds of incentives.

"Making [DTC genetic shops] a laboratory … creates the provider-to-provider exception regarding financial arrangements, creates an appropriate provider-to-provider [exception] for exchange of patient information, and facilitates the kind of information corporations like the big four wish to engage in [providing]," Willey said at the meeting, referring to Navigenics, 23andMe, DNA Direct, and Decode Genetics' DecodeMe service.

"By making them a laboratory it subjects them to [applying for] a license, paying a fee, [and] submitting data we require," she added.

The initial licensing fee for a laboratory to operate in New York is $1100. The laboratory then pays New York State approximately 0.6 percent of its gross annual receipts, which for some large national labs can amount to as much as $1 million in payments, Willey noted.

Of the 'big four' shops Willey mentioned, the NY State Department of Health has decided that Decode and Navigenics are subject to laboratory regulations. These two firms have applied for permits to operate as labs in New York, and their applications are currently under review, Willey told Pharmacogenomics Reporter this week.

Affymetrix, which was conducting genotyping for Navigenics on its Genome-Wide Human SNP Array 6.0, also had a pending application for a laboratory license in New York. However, Navigenics recently acquired Affymetrix’s laboratory (see related story, in this issue).

Meanwhile, DNA Direct has not been deemed a laboratory by the New York health department since other state-licensed labs order its assays and perform the actual testing.

"DNA Direct … does not do any testing, and they have accommodated the New York state direct-billing law," Willey explained during the SACGHS meeting.

Willey said that the NY State Department of Health is still in negotiations with 23andMe regarding the company's ability to operate in the state.

Updating the SACGHS on how New York regulates consumer genomics firms, Willey estimated the Department of Health has sent out more than 30 warning letters in the past four years. Without specifically naming the firms, she noted that eight smaller shops did not respond to the letters; 12 have ceased marketing tests in New York and issued disclaimers on their websites; and five have applied for a permit to operate in the state.

She added that the department must still follow up with five companies, and has determined that three do not fall within its jurisdiction since customers must go to a facility outside of the state to get tested.

NY: No 'Spit Party' Zone

During her presentation to SACGHS, Willey also stressed that New York's statutes governing how labs may test human specimens also apply to companies collecting samples within the state's geographic borders.

This has implications for 23andMe's highly publicized "spit party" last year, in which the company collected saliva samples from celebrities in order to raise awareness of its genetic-screening service.

"We have told 23andMe repeatedly that without a NY license, any samples collected in the state have to be destroyed. We've been assured that this has been done," Willey said. "Of course, we've not confirmed that the samples have been incinerated."

Pharmacogenomics Reporter was unable to confirm with 23andMe that saliva samples from the "spit parties" were not analyzed. 23andMe did not answer questions regarding its regulatory status in New York before deadline.

"It's not that far to Connecticut," Willey quipped. "Have your party somewhere else."

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Indeed, Willey conceded that one major weakness of NY's regulatory system is that consumers can easily access restricted tests in neighboring states with weaker statutes and oversight. With that in mind, 23andMe appears to have been informing NY customers how to work around the state's restrictions.

When customers ordering a genetic scan from 23andMe’s website choose “New York” as their state, the company offers the following advice in the form of a disclaimer:

"23andMe is currently unable to process saliva samples collected in or mailed from the state of New York. The New York Department of Health considers our Personal Genome Service a test requiring a lab license and direct physician involvement.

"If you or the recipient of the Spit Kit intends to collect your sample and mail it from outside the state of New York, please select the 'Ship to New York' button. … Upon receipt of your Spit Kit, you or the Spit Kit recipient will be required to affirm under penalty of law that the sample for the Spit Kit has not been collected in or mailed from the state of New York."

According to a 2007 survey by the Johns Hopkins University's Genetics and Public Policy Center, Connecticut, Pennsylvania, and New Jersey do not allow or limit DTC marketing of genetic tests and require tests to be ordered by a doctor. Massachusetts restricts DTC marketing of tests, except for tests “promoting health awareness and education” to the public about early detection of disease risk factors.

23andMe offers its DTC service in these four states neighboring New York.

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