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Will Other States Follow NY, Calif., in Taking On DTC Genetic-Testing Firms?

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With politically influential California and New York taking a hard line against certain direct-to-consumer genetic-testing companies, the nascent personal genomics industry has been left to wonder what other states might do.
 
“Historically, many states look to New York and California for guidance,” Navigenics CEO Mari Baker told Pharmacogenomics Reporter this week. “I am sure they are following what is happening in those two states. It would be a shame if every state acted separately.”
 
On June 9, Navigenics, 23andMe, and Decode Genetics' DecodeMe business unit were among 13 genetic testing companies to receive warning letters from the California Department of Public Health ordering them to “immediately Cease and Desist offering genetic test to citizens of California until a license has been issued by the Department.”
 
The letters also 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,” and barred the companies from taking unsolicited requests for genetic tests from California residents. 
 
The CDPH’s letters follow similar action by the New York State Department of Health in April that required 23 DTC genomics-services and genetic-testing companies to obtain permits if they wish to continue operating in the state. Among the companies warned in New York were Navigenics, 23andMe, Illumina, and Affymetrix. Decode did not receive a warning from New York regulators.
 
Following New York and California’s regulatory action against personal genomics firms, and with little in the way of federal guidelines on DTC genetic testing, players in the nascent personal genomic industry are left to wonder whether other states will follow suit.
 
Their anxiety is understandable. When it comes to regulating DTC diagnostic testing services, state requirements differ widely on topics such as licensing requirements, the definition of a medical test, who is authorized to order such a test, and the types of tests that can be marketed directly to consumers.
 
More importantly, many states have no rules guiding direct-to-consumer marketing specifically for genetic tests, and, unless complaints are made, they have no way of knowing if out-of-state, unlicensed labs are marketing their services to state residents.
 
According to a 2007 survey of state DTC diagnostic testing regulations by Johns Hopkins University’s Genetics and Public Policy Center, 25 states and Washington, DC, allow DTC testing; 13 states restrict DTC testing services; and 12 states, including California and New York, permit limited direct-to-consumer marketing of such tests. 
 
California’s Case
 
The CDPH took action against the DTC genetic-testing firms after investigating consumer complaints about the accuracy and cost of the tests as advertised on the Internet, according to agency spokesperson Lea Brooks.
 
California’s Business and Professions Code 1282 allows only a licensed physician or surgeon to engage in clinical laboratory practice. And the Golden State demands that before a company can begin marketing its DTC genetic-testing service it must first provide state regulators with data supporting the analytical and clinical validity of their homebrew tests or modified FDA-cleared tests.
 
According to CDPH, the 13 companies it has warned are violating state law by failing to obtain a license to conduct laboratory testing in the state and by allowing state residents to order genetic tests online and not through a licensed physician.
 

“We believe we are already in compliance [with California regulations] and will seek to educate the state as to all of the processes and precautions we take.“

The CDPH’s cease-and-desist letters, which can be seen on CDPH's website, gave the listed companies 14 days, or until June 23, to submit a plan for how they plan to “prevent further violation of California state laboratory law.” If these companies fail to submit a plan for compliance by deadline, the CDPH can obtain an injunction against these firms or criminally prosecute them, Brooks told Pharmacogenomics Reporter.
 
As of the deadline, HairDx, whose test predicts the risk of hair loss, was the only firm that announced it would stop marketing its service on the Internet in New York and California. The Irvine, Calif.-based company said it will now direct customers in these states to order the tests through a doctor. 
 
23andMe and Navigenics, on the other hand, claim they are in compliance with California laws and are continuing to operate in the state.
 
23andMe claims compliance with California’s laws citing the fact that Illumina, the company that performs the genotyping for its service, is licensed in the state. Furthermore, the company says it employs a California-licensed physician to order the tests.
 
Navigenics has also maintained that it is in compliance because the genome scans that are part of its service are performed by Affymetrix, which is CLIA-certified in California, and the tests are ordered and reviewed by a California-licensed physician. Navigenics also said it encourages its customers to use its genetic counselors to better understand the test results.
 
“We believe we are already in compliance and will seek to educate the state as to all of the processes and precautions we take, and subsequently work with the state if there are any specifics we have to implement,” Baker said. “We seek to work with California and any other state in their processes.”
 
Meanwhile, Decode is suggesting that CDPH has sent the company a cease-and-desist letter in error since DecodeMe doesn't market to California residents.
 
In reviewing the DecodeMe’s website, Pharmacogenomics Reporter could not locate an explicit statement forbidding California residents from using the service, as the CDPH demands in the warning letters. However, in the Terms of Use section of the website, the company places the onus on the customer to follow local laws with regard to its testing service.
 
“We do not offer these tests through physicians to the residents of California and will not until we receive a state license,” for which the company applied 11 months ago, Decode Chief Scientific Officer Jeff Gulcher told Pharmacogenomics Reporter this week. “Furthermore, we will not offer [these tests] directly to the consumer, which is prohibited by California law.”
 
“Now that CDPH has expressed publicly a heightened interest in genetic tests for common diseases, we hope that they will accelerate the licensing process,” he noted. Gulcher stressed that once it receives the go-ahead from state regulators the company will market its tests to California physicians only.
 
DecodeMe uses Illumina chips in its service, but the company conducts the genotyping in its own laboratories, and, in a dig to its competitors, Gulcher noted that Decode is not trying to take any shortcuts by operating through a licensed subcontractor laboratory (see related story, this issue).
 
It is unclear if any of the other warned companies have submitted a compliance plan or if the CDPH has taken any action against them. “CDPH will review the plans of correction and make a determination as to whether the facilities are in compliance with state laws,” Brooks told Pharmacogenomics Reporter.
 
State of Confusion
 
Although only New York and California have so far taken such regulatory action, there are already differences in which companies the states have chosen to target.  
 
Navigenics, warned by health regulators both in California and New York, said it currently operates its service in all 50 states. In New York, however, Navigenics’ customers are put on a waiting list until Affymetrix receives a license to operate in the Empire State.
 
Affymetrix received a warning letter from New York regulators in April. “The laboratory has submitted its documentation and we are expecting the lab license to be granted,” Baker said. Affy is CLIA-certified in California, and did not receive a warning letter from regulators in that state.
 
23andMe, also warned in both states, said it markets its personal genomics service in all 50 states.
 
Illumina, which provides the genotyping platform and chips for 23andMe’s service, also received a warning letter from New York state regulators for allegedly failing to have the appropriate licenses. The San Diego-based company, however, did not receive a warning from California regulators. 
 
Decode, which did not receive a warning letter from New York but did receive one from California regulators, told Pharmacogenomics Reporter that it markets its genetic tests for various diseases, as well as its personal genomics service DecodeMe, in every state except for New York, California, and Maryland. The company offers its ancestry services in all 50 states, since this type of genotyping doesn't fall under diagnostic testing. 
 
Although for the time being, CDPH's warning letters haven't materially impacted Navigenics’, 23andMe’s, and Decode’s businesses, if more states decide to follow New York and California's lead, the internet-based business models for these firms may come into question (see related story, in this issue).
 
Who's Next?
 
While Navigenics, 23andMe, and Decode continue to broadly market their services directly to customers, it is likely that California and New York mark the beginning of a protracted state-by-state regulatory battle that genetic-testing companies will have to wage as the industry matures.
 
According to the GPPC survey, 25 states restrict or limit DTC marketing of medical tests, but each state’s laws vary in scope. For instance, California law allows DTC marketing for the following tests: HIV, pregnancy, glucose level, cholesterol, occult blood, “and any other test for which there is a test for a particular analyte approved by the [US] Food and Drug Administration for sale to the public without a prescription in the form of an over-the-counter test kit.”
 
In New York, only physicians and “persons authorized by law to use the findings of laboratory examinations” can order medical tests, and consumers are not listed among the list of those “authorized.” Furthermore, DTC testing is permitted only for those tests approved by the FDA for direct, over-the-counter sale to consumers, and for certain tests related to blood supply, such as HIV and hepatitis C tests.
 
In Massachusetts, the law generally restricts ordering medical tests to doctors and authorized persons, but allows an exception for tests that promote “health awareness and education among the general public by early detection of disease and/or associated risk factors.”
 
According to the GPPC survey, Massachusetts regulators do not feel that such tests are being used to make medical decisions, and allow DTC for eight tests under this category, including tests for pregnancy and cholesterol.
 
Massachusetts regulators did not specify to Pharmacogenomics Reporter whether any gene-based tests are included among the eight tests. However, many genetic assays would certainly meet the states’ DTC testing exception for educational tests that provide “early detection of disease and/or associated risk factors.”
 
Meanwhile, Maryland regulators say DTC genetic testing is against state laws, and that the state only allows consumers to directly order cholesterol tests. In addition, health care providers licensed in Maryland are prohibited from sending specimens on residents to laboratories that are not licensed in the state.
 
However, Maryland has no specific legislation covering DTC genetic testing, and unless it receives complaints about them, state regulators have no way of knowing if an out-of-state lab not licensed in Maryland is accepting specimens from Maryland residents.
 
Maryland state officials have cast a cynical eye at what is likely happening within their borders. Although “these companies are not supposed to be accepting samples from consumers without the involvement of a licensed health professional — and I [also] doubt that they have applied for a Maryland license — I doubt that these companies have come to the attention of the [Office of Health Care Quality] and been checked out to see if they meet Maryland standards,” Susan Panny, director of Maryland’s Office for Genetics and Children with Special Health Care Needs, told Pharmacogenomics Reporter this week.
 
“However, if somebody complained, action would be taken. Complaints are investigated thoroughly,” added Panny, who oversees a statewide program that works with children with genetic disorders.
 
Maryland’s Laboratory Administration’s Director John DeBoy told Pharmacogenomics Reporter that he is unaware of any current efforts to change the state’s DTC policy with regard to genetic tests. 
 
Calling the Cavalry
 
GPPC Director Kathy Hudson acknowledged that there is a possibility that other states that currently restrict or limit DTC diagnostic testing may try to mimic New York and California.
 
“In the absence of federal leadership on genetic testing oversight, it is not surprising that states are stepping in,” Hudson told Pharmacogenomics Reporter.
 
For instance, federal laws are murky about who is authorized to order medical tests. While federal regulations on DTC testing require that laboratories have a “written or electronic request for patient testing from an authorized person,” they do not define who falls under the “authorized person” category. Thus, this determination is left up to each state, and definitions may therefore vary.
 
From the industry’s perspective, navigating such a patchwork of conflicting and oftentimes confusing state laws guiding DTC testing can be a huge disincentive to shops looking to enter the field.
 
Navigenics’ Baker echoed the need for federal leadership on DTC genetic testing, noting that if every state takes a separate stance on DTC marketing it could “likely result in the same sort of consumer confusion regarding discrimination issues that we saw exist for 13 years until [the Genetic Information Nondiscrimination Act] was just passed.
 
“We are optimistic that the federal government will be moving forward expeditiously given all of their careful review and public hearing activity over the last couple of years, continuing into this summer,” Baker noted.
 
Despite several public meetings held by federal officials regarding DTC genetic testing, including a meeting on the topic by the HHS Secretary’s Advisory Committee on Genetics, Health, and Society earlier this year, federal regulators still do not agree how to regulate personal genomics firms.
 

The FDA remains silent, saying it is watching the industry with interest.

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