Yesterday marked the deadline set by the California Department of Public Health for thirteen genetic testing companies to halt direct-to-consumer marketing and demonstrate their compliance with state regulations. Briefly, the state insists that genetic testing be conducted using specially licensed laboratories, and - more controversially - that all tests be ordered through a clinician (a proposal that stirred up howls of outrage from the human genetics blogosphere).All thirteen targeted companies are now listed on the health department website. In addition to the "big three" genome-scan companies (23andMe, deCODEme and Navigenics) and the boutique genome-sequencing company Knome (which offers a whole genome sequence for a cool $350,000) there is a bizarre menagerie of less well-known companies. Three of them (Salugen, Sciona and Suracell) are members of the maligned "nutrigenetics" industry, while New Hope Medical Center appears to be a generic unconventional medicine provider that's dabbling in genetics. Gene Essence is a weak attempt by Biomarker Pharmaceuticals to jump on the genome-scan bandwagon. DNATraits, which I've mentioned previously, and Portugal's CGC Genetics both market tests for a variety of rare single-gene diseases. Finally there are two specialised testers: HairDX, which tests polymorphisms associated with hair loss, and Smart Genetics, which focuses on APOE testing for Alzheimer's risk.
You can download the letters from the health department's website, although they're hardly riveting reading. I'm surprised to see deCODEme on the list since residents of California (and several other states) are explicitly restricted from using the service's genetic risk calculator. (As an irrelevant aside, I imagine that 23andMe's Linda Avey was slightly annoyed by the consistent misspelling of her last name, and the burly CEO of deCODE would have been less than impressed with being referred to as "Ms. Stefansson"!)
The responses to the health department letter have ranged from immediate surrender to preparations for battle. Wired reports that both baldness specialist HairDX and nutrigenetics company Sciona have dropped out of the direct-to-consumer market in California rather than face the legal wrath of the CDPH; SeqWright, which offers a pretty half-hearted genome scan service, packed its bags without even receiving a letter. In contrast, 23andMe and Navigenics - which both presumably have the financial backing to sustain a legal wrangle - are planning to stay. Wired reports on a statement released to them by San Francisco-based 23andMe, which clearly has no intention of losing a foothold in its home state:
We believe we are in compliance with California law and are continuing to operate in California at this time. Our testing is conducted in an independent CLIA-certified laboratory and we utilize the services of a California licensed physician. However, we would like to have continued discussions with the Department regarding the appropriate regulation of this unique industry.23andMe only recently moved to a lab that was certified under the Clinical Laboratories Improvement Act of 1988 (CLIA), presumably as an attempt to head off this sort of regulatory crack-down. So basically, they're arguing that they're not in breach of the rules and will continue to test California residents until the law changes.
Navigenics, meanwhile, has sent a detailed defence of their position to the health department - and it starts with a much more audacious argument:
In a letter sent to the Health Department obtained by Wired.com, the company argues that it does not actually perform genetic tests, and therefore should not be regulated as a clinical laboratory under California state law.Because the company out-sources the actual genome scan to a certified lab run by Affymetrix, it never actually touches the DNA - it only handles the information derived from that DNA. Wired comments:
Instead, Navigenics argues it merely applies algorithms to DNA data it receives from tests performed by a third-party, a licensed laboratory.
[...]
"Nothing in the definition of a clinical laboratory test supports a conclusion that the interpretation of the data resulting from such a test is itself a test," Navigenics wrote in its response.
Navigenics is arguing that once the state-licensed lab turns a biological sample into digital data, DNA is no longer within the purview of health department laboratory regulation. Navigenics is just an information service, combining scientifically-published genetic disease correlation data with personal genotype data. [my emphasis]Apparently Navigenics' lawyers think this intriguing argument has a chance of winning over the health department; but just in case that doesn't work, they have a more conventional second line of defense that sounds pretty similar to 23andMe's argument above. Navigenics has been using a CLIA-certified lab since it launched in April and has emphasised its use of a pet physician who rubber-stamps every ordered test, which it feels is sufficient to place it on the right side of Californian regulations.
We'll see what the health department makes of these arguments. I can imagine several ways this might all pan out (not being a lawyer, I won't pretend I have much idea how likely any of them are).
Firstly, the more respectable, well-backed companies (the big three and Knome) may well be able to hack out a compromise deal with the department and continue operating under only slightly more stringent regulations, while the bottom-dwellers (e.g. the nutrigenetics companies) are forced to move their business to more accommodating regulatory climates. This is probably the best outcome we can hope for - consumers still have the freedom to analyse their own genome without asking their doctor's permission, the department walks away with a sense that the industry has been cleaned up, and the science-free scammers that blight the industry are dealt an important blow.
Secondly, insanely, the department could insist that customers need face-to-face consultation with a real live doctor to order any genetic tests. If they stuck to their guns, you could basically kiss goodbye to the fledgling personal genomics industry in California: faced with the obstacle of seeking a doctor's approval to have their scan (rather than five minutes on the web with a credit card) most potential customers simply won't bother. If this legislation spread to other states the industry as a whole would be set back by years.
Finally, the department might only push for very strong regulation of any health-related genetic test but leave other forms of genetic testing (ancestry and non-disease traits) alone. The result of this would be ironic: Navigenics, which adopted a serious clinical-centred demeanour from the beginning to steer clear of charges of frivolity that might bring regulatory attention, would be hit much harder than the more relaxed 23andMe. Navigenics has very deliberately avoided doing anything that looked remotely like 23andMe's brand of "recreational genomics" - but that has left them with nothing to fall back on should regulation clamp down hard on health-focused genetics. 23andMe, on the other hand, could probably get by purely on the basis of the non-disease components of their package.
Anyway, the next week will be a pretty interesting window in the young life of the personal genomics industry - the decisions made now will likely have major effects on the way the industry evolves over the next few years, in the lead-up to the era of cheap whole-genome sequencing. Stay tuned...
(Thanks to a reader for pointing out the "Ms Stefansson" reference.)
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4 comments:
Daniel,
Great post. But I think there are quite a few more outcomes....Including
1. A 2 year long legal battle where these companies continue to operate
2. They turn into the Viagra scam, where a doctor blindly writes scripts
3. Other states squeeze them too...i.e. Texas, NY, NJ, CT putting them in the fight in several states...This is a very likely scenario.
4. They all move to India, You gotta hate that commute to Mumbai
5. They call a consultant (Like Me) and we can help them with some other solutions.
6. They Win....and the Gov't loses completely, allowing all of these fly by nights to stand along side of the big 3 and pretend they are doing similar things....
I can think of a few others.....
-Steve
www.thegenesherpa.blogspot.com
I doubt anyone's going to be moving to India, Dr. Murphy, and other states will almost certainly follow CA and NY's lead. As Daniel mentioned, the most likely scenario is that the fly-by-nighters will pack up and the non-scam business will remain, and that would indeed be a win-win.
Have you considered that hiring you on as a consultant might be growing less and less likely with every post you write?
Daniel
Great post. It will definitely be interesting to see how this shakes out. Yes there are enough shamsters out there, and they should/will have to fold out, but in the end I doubt that the Big 3 + KNOME will have to cease operations
I'd like to add one thing. Linda Avey gave the keynote at BioIT World. She and Dietrich Stephan were panelists in a very interesting discussion. Within the scientific community, there are many who think its too early, and I am not sure it isn't, but almost no one I know would consider these companies anything but legit and providing anything more than information services (or in the case of pharma a long term treasure trove of information)
Daniel,
This is an interesting debate. As someone who has been involved in genetic testing now for many years, this California decision to make an overly broad interpretation of law represents a greater concern in my mind and that's how consumers handle health information.
Let me first start off with stating that I know a thing or two about this debate. I worked at Prometheus Labs where we built the first blockbuster pharmacogenetics testing (TPMT genetics and 6-TGN/6-MMPN therapeutic drug metabolites) that 1 out 3 new scripts (NRxs) in the U.S. gets and we introduced Celiac disease testing in the U.S. (serologies and genetics). Even though the testing did not have FDA approval, it was performed in a CLIA-certified laboratory, ordered by a physician, and we were even able to get the TPMT testing added to the FDA-approved package insert labels of the drugs in the affected class without the test being FDA-approved.
Now, from a nutrigenetics standpoint, you state that it is a "maligned" industry. Maybe... remember not all the companies you mention were included in the damning GAO report - namely Salugen.
As the founding CEO of Salugen, we have taken a pragmatic approach of leveraging 30 years of research, conducting our own R&D and commercial pilots, and have published over 15 studies/articles in peer-reviewed scientific journals over the past three years - far more than any other player in the industry.
We have performed every single test - within a study or commercially - in a CLIA-certified laboratory, credentialed by CAP and inspected by the State of California. Through our piloting, we have tested various different iterations of the technology to figure out commercially what works, while also tacitly evaluating the clinical effectiveness of those commercial studies by conducting observational studies of those outcomes with protocols approved by an independent IRB.
We have tried many pilots including large resort spas, direct to consumer, through the court system in alternative sentencing, online, direct mail, through physicians offices, and through addiction treatment centers. By doing these pilots, we have garnered a tremendous amount of experience of what works and what does not work.
On May 29, 2008, Salugen issued a press release (http://www.24-7pressrelease.com/press-release/salugen-begins-implementation-of-its-strategically-restructured-business-plan-51414.php) explaining how it will be focused moving forward, which includes providing its testing and products primarily through clinicians.
We received the letter from the CDOPH dated June 9th and appreciated their concern about the public health and believe we share in the motivations to do the right thing. We explained that we believe we have been in compliance with the law, apologized for any unintentional transgressions, and moving forward, we believe that we are in compliance with their even more broad restrictions (http://www.salugen.com/assets/documents/Salugen%20Statement%20of%20CA%20Ltr.pdf).
But here's the thing? At the end of the day, what is the CDOPH really concerned about here? Genetic testing generally just provides information. As Navigenics states, they are taking gene testing and using algorithms to provide information. What is harmful about giving information? Isn't more information better?
Seperate from my role at Salugen, I personally believe that giving consumers and physicians more information is good. If CDOPH is worried that consumers may be scared about the information they receive, this already happens everyday with the Internet - genetics or not.
You don't need to imagine this scenario: a 50 year old woman is diagnosed with early stage rheumatoid arthritis. She is prescribed the most widely-used disease modifying anti-rheumatic drug - methotrexte. She goes to the pharmacy on her way home, picks up the script, and heads home. She sits down in front of her computer and searches for the term "methotrexate" to learn more about this drug. Bam! She sees that methotrexate is actually a chemotherapy agent. "Oh No! Chemotherapy?" She says, "Does that mean I am going to lose my hair?" Then she continues to read, "methotrexate is part of the regimen involving RU-486 - medical abortions". She says "Abortions? What is the drug doing to me?" And so the narrative goes that this woman may not be as likely to take her medication because of information she finds online at a crucial time of her therapy when early DMARD intervention is critical to her treatment. She then does not have the results her doctor wanted and she is then put on a biologic treatment (like a TNF-alpha inhibitor) which costs 20 times the amount, yet has not been found to be any more clinically effective in monotherapy than methotrexate alone.
So, is that a public health concern? 2M RA patients in America? You tell me... If the concern is about consumers getting information that they may misinterpret or may be considered far too complex for them to understand, this already exists with the Internet - whether genetics is involved or not. There is no way to stop it. It existed before the CDOPH letter and it will exist after their interpretation of the law. Personally, what I think is most important, is that regulators in every state and probably at the federal level, work with those of us who understand this market and come to a mutual understanding of the facts, the risks and other issues so that the regulators feel comfortable that they are doing their best job to protect the public good in this very nascent market of consumer genetic testing.
Anyway, I think it is a good debate to be having, if well-intentioned people can come to a consensus.
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