At the heart of the issue between state regulators and direct-to-consumer genetic-testing companies lies a fundamental disagreement about the way products are marketed in the Internet age.
California state health regulators “take the view that any analysis of a specimen from a person's body is a laboratory test — even if it’s just a swab from the inside of a person's cheek — and the companies that offer services analyzing such specimens are, in fact, offering laboratory testing and therefore are subject to the [state] laws regulating laboratories and laboratory testing,” Peter Kazon, counsel for the Washington, DC, law firm Alston Bird who specializes in representing clinical laboratories and companies offering genetic testing, told Pharmacogenomics Reporter this week.
In contrast, “the companies seem to be taking a view that this is really an educational service [and] not really meant to be medical or clinical information,” he said.
“In the Internet age people are used to being able to obtain information that they want quickly and with minimal interference,” Kazon said. “In some ways it’s that conflict that may really be fueling this.”
However, California health regulators don’t believe that genetic testing information should be readily accessible to its state’s residents without the input of a licensed physician.
In sending cease-and-desist letters to 13 genetic testing companies recently, the California Department of Public Health demanded that “any advertising for genetic services whether it be in written word or by internet, must clearly state that this testing is prohibited for California residents.” Additionally, the CDPH bars the companies from taking unsolicited requests for genetic tests from California residents.
Although California health regulators appear to be taking a hard line on DTC genetic testing, Kazon noted that regulators might find it difficult to keep track of web-based companies.
California is “planning to take [this issue] very seriously,” Kazon said. “If it wishes, the state could go to court and try to prevent the companies from offering services to California residents, though how a company does that in the Internet age is going to be difficult.”
The CDPH’s warning letters gave the 13 companies until June 23 to submit a plan for compliance with state laws (see related story, this issue).
CDPH spokesperson Lea Brooks told Pharmacogenomics Reporter this week that the state regulatory agency took action against DTC genetic testing firms after investigating consumer complaints about the accuracy and cost of genetic testing advertised on the Internet. She would not disclose the complaints or provide further details.
Meanwhile, Maryland regulators acknowledged that they have no way of knowing if an out-of-state lab not licensed within the state is accepting specimens from Maryland residents unless someone reports it to the agency.
The Internet and Freedom
Among the 13 firms warned by the CDPH were Navigenics, 23andMe, and Decode Genetics’ DecodeMe business unit. All three companies are relying on internet marketing to broadly promote their nascent businesses; customers can sign up on the companies’ websites to have their genomes scanned.
DecodeMe and 23andMe launched their services around the same time late last year, and Navigenics launched its service earlier this year.
23andMe and Navigenics claim they are marketing to residents in all 50 states. In New York, where Navigenics has also receive a cease-and-desist letter, the company is placing customers on a waiting list until California-based Affymetrix, which genotypes the samples for the service, receives a license from the state of New York.
In defending against state regulators who aim to limit DTC genetic testing, 23andMe has made its fight into a freedom-of-information issue.
“In the Internet age people are used to being able to obtain information that they want quickly and with minimal interference. In some ways it’s that conflict that may really be fueling this.”
“Some argue it is too early to make personalized genetic information directly available to consumers, contending that the level of public understanding has not matured to the point that most people are able to understand their results, and that genetic associations discovered to-date have little actual significance,” 23andMe states on its website.
“23andMe believes people have the right to access their personal genetic information,” the company asserts. “We believe our customers are capable of understanding the context of the information we provide them. We also think the benefits our customers accrue in accessing their genetic information outweigh potential risks.” 23andMe does not define those potential risks.
It is clear that the Internet is a major vehicle for attracting customers, not just for 23andMe’s personal genomics service but also for its newly launched research arm, 23andWe.
23andMe launched 23andWe last month in an attempt to attract patients to participate in gene-based clinical trials from the existing web-based community from its personal genomics arm. Through the research projects under 23andWe, the company aims to improve the quality of patient data that enter pharmacogenomic-based clinical trials; advance the development of tailored drugs; and encourage regulators and medical groups to use genetic information in their medical decision making [see PGx Reporter 06-04-2008].
Meanwhile Decode has said it is currently marketing its ancestry service in all 50 states but limiting testing for specific diseases to all states except California, New York, and Maryland, where it is awaiting licenses.
On its website, the company offers customers of its personal genome service discounts on the diagnostic tests for specific diseases that the company markets.
“Decode offers … tests for many of the variants it has discovered, that are ordered with the authorization of a physician, may be reimbursable by healthcare providers, and are accompanied by appropriate genetic counseling,” the company states on its website. “DecodeMe subscribers may be eligible for discounts on such tests, and we encourage those who may be interested in them to go to our diagnostics website.”
Navigenics and 23andMe similarly shift onto their customers the task of adhering to local laws when accessing their service.
HairDx, which sells a product it claims can predict costumer’s predisposition to hair loss, was also warned by the CDPH and is the only company that has so far publicly said it will stop marketing its service online in New York and California.
Although the virtual nature of these new personal genomics companies may make it difficult for health regulators to keep tabs on them, Internet marketing will no doubt be an integral part of companies’ business models as the healthcare industry moves toward a more personalized paradigm.
In a recent report, Deloitte discussed the emergence of so-called NewPharmaCo, a new breed of life-sciences companies focused on developing pharmacogenomics-based treatments and structured to become leaders in the market through virtual healthcare networks.
These NewPharmaCos threaten to beat big pharmas by developing genotype/biomarker-driven drugs in smaller disease markets; by using molecular diagnostics to resuscitate off-patent, lower-efficacy drugs in smaller, targeted populations; and by establishing virtual healthcare networks to forge relationships with patients, starting from predisposition testing to disease treatment [see PGx Reporter 05-21-2008].
The web-based business models of 23andMe, Navigenics, and Decode appear to be moving toward this paradigm. Both 23andMe and Navigenics invite customer participation to discuss on their blogs the latest research and policy issues related to genetic testing. 23andMe’s blog is called The Spittoon and Navigenics’ blog is The Navigator.
In launching 23andWe, 23andMe has said it plans to “work with the genetic counseling and medical communities as genetic research progresses and more data is disseminated to ensure people are properly educated about their genetic information.”
Navigenics also says that it employs a team of genetic counselors to help patients understand their test results.