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Privacy Groups Challenge Calif. Bill Pushing Regulatory Exemptions for 'Post-CLIA Bioinformatics Services'


By Turna Ray

A California bill seeking to create a new regulatory framework for consumer genomics firms that interpret genomic data but do not analyze samples at an in-house laboratory has raised red flags within the personalized medicine community and among privacy advocates.

California state Senator Alex Padilla (D-San Fernando Valley) earlier this year introduced SB 482, a bill that would amend the California Business and Professions Code to distinguish so-called "post-CLIA bioinformatics services" from entities providing laboratory services.

The bill, amended on April 14 and sponsored by California-based 23andMe, would exempt such business from certain requirements that clinical laboratory service providers have to meet under the Clinical Laboratory Improvement Amendment. However, the bill does define regulations specifically for "post-CLIA bioinformatics services," such as algorithm approval processes, and requires that such services use a licensed clinical laboratory.

23andMe spokesperson Rachel Cohen told Pharmacogenomics Reporter this week that the company is working to pass SB 482 "because we believe that current California clinical laboratory regulations do not offer sufficient protection for customers of direct-to-consumer testing services."

"Although 23andMe could continue to operate based on its clinical laboratory license, we believe that additional regulations are required to protect consumers," Cohen said.

Specifically, she said, "without SB 482, there are serious gaps in existing state legislation and regulations that still need to be addressed, now that direct-to-consumer testing services are becoming more ubiquitous," These gaps, she identified "in the areas of data privacy, data handling, and scientific validity and transparency of algorithms, among others."

However, the American Civil Liberties Union and several other privacy groups do not agree that the bill protects patient privacy, and have sent letters to Padilla recommending more stringent privacy provisions and requirements ensuring the accuracy of data analysis.

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"It doesn't appear that the direct-to-consumer genetics testing companies have established why they should be treated different from laboratories that perform the same analysis," the ACLU wrote in its letter to Padilla. "Some of the regulations that apply to the clinical laboratories may be relevant, so a complete exception for the DTC genetic testing industry from those standards may not be appropriate."

In its assessment of SB 482, Johns Hopkins University's Genetics and Public Policy Center notes that "the legislative findings of the bill indicate an intent to remove regulatory barriers to operation for companies providing personal genome services."

Similarly, Genetic Alliance CEO Sharon Terry expressed that SB 482, by setting personal genomics firms apart from clinical laboratories, may be further complicating the "hodgepodge of oversight" that already ails the current regulatory system for genetic testing.

Currently, clinical laboratory services are overseen by the Centers for Medicare & Medicaid Services under CLIA. CMS has said it is working with consumer genomics firms to see where CLIA may be applicable. The US Food and Drug Administration has only said it is watching the nascent consumer genomics industry with interest. Similarly, the Federal Trade Commission has also said it is investigating the marketing practices of DTC consumer genomics firms.

The California Healthcare Institute, a public policy research and advocacy organization for the state's biomedical industry, has yet to come to a consensus on SB 482. However, Nicole Beckstrand, CHI director of communications, told Pharmacogenomics Reporter that public concern surrounding the bill may nudge the federal government to step in.

"We have heard that with this bill out there that the Feds may be more apt to look at this closely," Beckstrand said, adding that she is not aware of any definitive announcements in this regard.

In addition to 23andMe's sponsorship, biotech giant Genentech has also decided to back the bill. According to Genentech, the bill is a step in the right direction toward developing regulatory standards for biological data analysis services.

SB 482 comes after the California Department of Public Health sent letters to 12 consumer genomics firms last year to stop directly marketing genetic risk scans to state residents without the involvement of a state licensed physician and without a license to operate a laboratory in the state. Among the companies warned was the bill's sponsor 23andMe, and competitors Navigenics and Decode.

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Eventually, CDPH granted Navigenics and 23andMe licenses to operate in the state, after they garnered the necessary certifications.

Across the country, New York health regulators similarly warned direct-to-consumer genomics firms last year, and decided to regulate consumer genomics firms in the same way as clinical labs. Although the NY State Health Department has decided to regulate Navigenics and Decode as clinical labs, the state agency is still in negotiations with 23andMe [see PGx Reporter 03-18-2009].

"We are currently discussing with the New York State Department of Health whether the New York clinical laboratory permit application process is compatible with 23andMe's business model," 23andMe's Cohen said in an e-mail. "If it is not, we plan to explore ways to align our business model with the application process and/or seek statutory changes if necessary."

The Bill

SB 482 defines "post-CLIA bioinformatics services" as "the postproduction interpretation, by means of an algorithm, of biological data." The term "algorithm," according to the bill, refers to "a set of calculations, computations, rules, or other bioinformatics processes transparently based on peer reviewed, published scientific literature and publicly available data that is performed upon a customer's biological data set."

SB 482 is currently awaiting a decision by the Senate Judiciary Committee. If enacted, the bill would exempt firms providing post-CLIA bioinformatics services from certain state licensing laws that clinical laboratories have to follow. Specifically, these companies would no longer be exempt from marketing their services directly to consumers in the state.

Currently laws in California allow DTC testing only for certain tests such as those for pregnancy.

However, SB 482 would also set operating standards for "post-CLIA bioinformatics services" for the first time. If passed, SB 482 would require these companies to use a licensed clinical lab to analyze customer samples and disclose to customers the CLIA status of the laboratories being utilized.

Under the requirements of the bill, such entities would have to employ an individual, with a Master's degree or a PhD, to approve algorithms used to interpret genomic data. The companies would have to provide CDPH with a "transparent description of the validity of biological data sets and how to perform the algorithm on biological data sets."

Although the bill requires these companies to form an external physician advisory board to provide guidance on the interpretation or presentation of analyses to customers, SB 482 does not require approval or review of the algorithm by a government regulatory body.

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Privacy of consumer data is also addressed by the bill, requiring "post-CLIA bioinformatics services" to delete identifiers linked to customers' biological data and "take all reasonable steps to prevent the release of individually identifiable information without explicit consent from a customer."

Furthermore, companies would have to obtain informed consent from customers before performing services, including using de-identified data for research purposes. Currently, by agreeing to the terms and conditions for 23andMe's service, customers give consent to the company to use the data for research.

Although there are few federal regulations that specifically guide genomic interpretive services, such as 23andMe's, the leading players of this burgeoning industry have made an effort to come to a consensus on certain industry standards.

During a December conference on consumer genomics hosted by the Centers for Disease Control and Prevention and the National Institutes of Health, representatives from 23andMe, Decode Genetics, and Navigenics presented voluntary industry standards they had developed with the help of the Personalized Medicine Coalition [see PGx Reporter 04-15-2009].

While the companies agreed to standardize certain parts of their genetic risk screening offerings, the services still differ on certain clinical validation methods.


A number of consumer and privacy groups, including the ACLU, World Privacy Forum, and the Privacy Rights Clearinghouse, have expressed concerns about whether SB 482 protects consumer privacy and whether the bill's requirements would ensure the accuracy of the interpretive services provided.

In its letter to Padilla, the ACLU recommends the bill be revised to require that all genetic materials be destroyed two weeks after communicating the information to the customer; to use more explicit language banning the release of identifiable genomic data without written consent; and to lift the requirement that customers must consent to research on their de-identified data as a condition of using genomic services.

The ACLU also asserts in the letter that "the requirements in [SB 482] are insufficient for ensuring that the tests these companies offer are accurate and reliable."

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According to Genetic Alliance's Terry, the entire regulatory system for genetic testing needs to be overhauled to address the increasing complexity of 21st century technologies. She added that these so-called "post-CLIA bioinformatics services" should be subject to CLIA standards.

"The genetic testing system overall needs to be a 'system,'" Terry told Pharmacogenomics Reporter this week via e-mail. "That is, all entities — companies that offer DTC, academic labs, or traditional companies — should be held to rigorous standards.

"A balanced view and process must be undertaken – it is neither right to call out these algorithms as separate from the genes and information they are in effect elucidating, nor is it correct to see them as foreign or in need of more stringent oversight," Terry said. "This should all be integrated, and risk should determine the level of oversight."

Although Genetic Alliance has not taken an official stance on SB 482, Terry called for more integration between CMS and FDA, and encouraged more regulatory transparency at the agencies. Separately, at the FDA Transparency Task Force meeting this week, Genetic Alliance put forth a recommendation that the agency develop a public registry for genetic tests.

According to 23andMe's Cohen, Senator Padilla's office has convened several meetings with privacy groups to address their concerns about SB 482.

"While several of their concerns are valid, we believe that the current language of SB 482 actually improves upon existing legislation regarding privacy of individuals' biological data, and it is thus very important that SB 482 pass," Cohen said.

Cohen pointed out that in meetings with Padilla, privacy groups have acknowledged that SB 482 goes further in providing privacy protections than current law.

"The current language is a starting point, not a final product," Cohen added. "We look forward to continuing to discuss and refine SB 482 to address privacy groups' concerns, so that the final language adequately protects consumers' privacy."


Pushing back against the bill's detractors is at least one drug industry heavyweight. Biotech giant Genentech, the same company that filed a Citizen Petition last year asking the FDA to regulate all predictive genetic tests, has come out in support of SB 482.

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"Genentech and various individuals state that this bill enacts regulatory standards for biological data analysis services to ensure quality, transparency, and consumer protection," according to an analysis posted on the California State Senate website.

This view seems to be a departure from Genentech's stance toward the regulation of pharmacogenetic testing that determines response to drugs. In its Citizen Petition, it asked the agency to expand its oversight over all predictive genetic tests and promote a more equitable regulatory system [see PGx Reporter 12-17-2008].

Consumer genomics services such as 23andMe do interpret their customers' genetic differences in responding to drugs like warfarin and clopidogrel.

Supporters of the bill, according to State Senate consultant Rosielyn Pulmano, feel "the current regulatory framework is not appropriate for companies that provide genetic information directly to consumers.

"They indicate that entities that provide storage and presentation of genetic information on consumers' behalf [but] do not receive biological specimens or generate the genetic information are not clinical laboratories and should not be subject to clinical laboratory requirements," Pulmano said in an analysis on the State Senate website.

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