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In Picking Up Affy's CLIA Lab is Navigenics Inviting More Regulatory Woes?

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With its recent acquisition of Affymetrix’s Clinical Laboratory Improvement Amendments-compliant laboratory, Navigenics has delved into the complicated and confusing world of laboratory regulation, but the personal genomics firm is focusing on the advantages of having an internal lab than the potential regulatory challenges.

“There are no regulatory implications on the federal level and on the state level we will have the licenses that Affy has,” Vance Vanier, Navigenics chief medical officer, told Pharmacogenomics Reporter this week.

“In deciding to take this step, we hope it expresses to regulators our commitment to be responsible,” he added.

Currently there are no federal guidelines specifically regulating direct-to-consumer marketing of genetic tests, although the Federal Trade Commission is said to be investigating some of these firms, and the US Food and Drug Administration has said it is watching the burgeoning sector “with interest.”

Meanwhile, state laws differ widely with regard to the regulation of DTC genetic testing, with some states issuing a total ban and others remaining silent on the issue.

PGx Reporter sister publication BioArray News reported earlier this week that Affymetrix had transferred ownership of its 10,000-square-foot Clinical Services Lab in Sacramento, Calif., to Navigenics in order to refocus its business strategy on being a platform provider [see BAN 03-17-2009]. The terms of the acquisition were not disclosed.

Affy’s lab became CLIA compliant in April 2007 when the company began to offer clinical trial and patient testing via gene expression monitoring, genotyping, chromosomal copy-number analysis, and other molecular diagnostic techniques [see BAN 4/24/2007].

According to Vanier, Navigenics decided to acquire Affy's lab because the company has seen an increase in the volume of orders for its genetic screening service.

The increase could be attributed to the launch of a less expensive service offering, marketing partnerships with a physicians group called MDVIP, and a research collaboration with the Scripps Translational Science Institute, Affy, and Microsoft to genetically screen 10,000 participants [see PGx Reporter 12-12-2008, 10-15-2008].

Navigenics’ principal Health Compass service, launched in 2007, costs $2,500 and tests for an individual's genetic predisposition to 23 conditions. Earlier this year, the company launched Annual Insight, a $499 stripped-down version of the service that tests people's genetic predisposition for 10 common health conditions. Annual Insight will be marketed particularly to doctors to encourage the incorporation of genetic risk information in their patients' yearly physical examinations.

Navigenics will continue to use Affy’s GeneChip microarray to analyze patient samples. The company is betting that having an internal CLIA lab will help it deliver test results sooner and allow it to launch new service offerings faster, Vanier said.

Along with the advantages of having an internal CLIA lab, Navigenics will have to face new regulatory considerations.

Laboratories can apply for a number of certifications in order to establish their safety, the expertise of their staff, and the proficiency of the technology used at the site. The most common laboratory accreditations are obtained through the Centers for Medicare & Medicaid Services' CLIA and the College of American Pathologists.

The most confusing, however, are the patchwork of state requirements for laboratory licensing, which industry observers have said could be ameliorated with federal regulations.

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Regulatory Implications

Although Vanier insisted that having an internal CLIA lab will present minimal regulatory hurdles for Navigenics, the acquisition changes the company’s status from a genetic risk-data provider to a laboratory.

When the state health departments in New York and California sent letters last year warning Navigenics and other consumer genomics firms to stop marketing their tests without a state license and without the consent of a physician, many firms claimed that they should not be subject to the same licensing requirements as laboratories since the genotyping portion of their service is conducted by outside labs [see PGx Reporter 06-25-2008].

With Affy’s CLIA lab on board, that argument is now moot for Navigenics.

Although California granted Navigenics a license last August to operate its DTC service in the state, the company’s application for a New York license is still pending (see related story, in this issue).

“We have reason to believe we’re getting very close to a positive decision in New York,” Vanier told Pharmacogenomics Reporter.

Last June, Navigenics CEO Mari Baker stressed that New York and California have influential laboratory regulatory policies, and that there is a risk that other states may decide to similarly regulate DTC genetic testing [see PGx Reporter 06-25-2008].

If this becomes the case, Navigenics will be left to battle out licensing requirements on a state-by-state basis. According to Vanier, Navigenics is currently in discussions with several other states with regard to its DTC service, though he declined to name them.

SACGHS Recommendations

Vanier stressed that federal guidelines overseeing DTC genetic testing may resolve much of the regulatory confusion currently plaguing companies like Navigenics. The HHS Secretary’s Advisory Committee for Genetics, Health, and Society met last week in Washington, DC, to discuss this very topic.

During the meeting, the advisory committee identified seven recommendations from past reports that can be applied to the regulation and reimbursement of DTC consumer-genomics services.

The recommendations address the limited clinical validity and utility of genetic tests; the need for consumer and physician education; privacy protection concerns; and the practice of regulating companies that make false and misleading claims.

The advisory committee has formed a short-term task force to develop a report on whether these existing recommendations appropriately address the issues surrounding DTC genetic testing. The task force’s report will be presented and discussed at SACGHS’s meeting June 11-12.

Also at the SACGHS meeting, Barry Straube, CMS’ acting chief medical officer, said that the government payor is working with DTC genetic-testing companies to ensure compliance where CLIA is applicable. He did not elaborate.

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