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New Business Plans for the Direct-to-Consumer Gene Testing Industry?

Posted by Pete Shanks on December 9th, 2012


The Direct-to-Consumer (DTC) gene testing industry has generated a lot of press over the last five or six years. But the business plan has always seemed rather on the South Park side of logical:

  1. Collect DNA from humans
  2. ?????
  3. PROFIT!!!

The company that generated the initial wave of publicity, and remains by far the best known, is 23andMe. Many people thought at first that their business plan was purely consumer focused: individuals would pay to get their spit kits and have their genes analyzed and the company would make a buck on the procedure. But as early as 2007 there were suggestions that Google had an interest in gathering genetic data. And it soon became clear that the fine print reserved the company the right to sell (theoretically anonymized) customer data to researchers.

Selling access to massive databanks seemed to make more business sense than what was becoming called recreational genomics. And now 23andMe has made a potentially very significant move in that direction by getting on the NIH payroll. The company has received $573,000 in grant funding to perform genome-wide studies on allergy risks; to investigate error rates in sequencing technologies; and to "develop tools to build out 23andMe's database," reports GenomeWeb. With this and last month's announcement that the company has filed for FDA clearance of some of its tests, it seems that another reinvention may be underway.

The idea of FDA regulation of the DTC industry has been controversial all along. Many observers, including CGS, have called for it; many libertarian-leaning scientists have opposed it; 23andMe seems to be accepting it; and other companies appear to be trying to evade it. A new enterprise called GenePeeks plans to test donated sperm and purchasers' eggs to see if they have matching recessive genes that could result in a child with a disorder. The fledgling company will take the genomes of both gamete providers and combine them on the computer, to make thousands of possible "virtual children."

Why do it this way rather than with a lab test? Well, partly, explains Ron Bailey of Reason, because it is "a way to get around Food and Drug Administration medical device and diagnostics regulations." You see, they are not analyzing the male; that might be the unauthorized practice of medicine. Nor are they analyzing the female; that too might be illegal. They are analyzing a mash-up! Cunning, eh? (The lawyers will surely intervene. Won't they?)

Something similar may perhaps be going on with Gene by Gene Ltd. That's the parent company of Family Tree DNA (ancestry tests), DNA Findings (paternity tests) and DNA Traits, which offers "CLIA regulated health diagnostic tests to certified medical professionals and researchers." Now Gene by Gene has launched a fourth subsidiary, DNA DTC, which "offers a wide range of Research Use Only (RUO) tests." These include complete genome sequencing for an introductory price of $5,495. It looks as though they are aimed at professional researchers, the tag line being "Your Research," but the generally reliable Dan Vorhaus is convinced that individual consumers can order directly. He may be right: Why else call it DNA DTC?

But and this could be the most significant part of the gambit what is on sale is what Vorhaus calls "the first data-only DTC product." In other words, the company will send you raw data, not including any interpretive results about what it all means. So, no analysis, no medical involvement, no FDA oversight? This could be another wrinkle in the tangled path of genetic testing on the way to the marketplace.

Analysis of the data has always seemed to be of the essence. Some have estimated very high costs for whole-genome analysis, others think that's hugely exaggerated. Many people are discussing how to integrate whole-genome analysis into healthcare, and some are warning of the perils of hype and of swamping an already stretched medical system. (Do check out the current issue of GeneWatch.) And of course there are a few investors and entrepreneurs figuring out how best to profit from this technology.

Naturally, there are political implications: Should we let the Chinese take over a U.S. firm? That's "a red herring," says George Church, who boasts that "I could sequence your DNA for $4,000 from a handshake." He's probably right about the Chinese, and he's definitely far too sanguine about the privacy issues.

How the DTC industry will eventually manage remains unclear. It seems likely that, as with the 19th-century California Gold Rush, the merchants will be the ones who profit. But in this case, it may not be the miners that is, scientists who lose out, but all the rest of us.

Previously on Biopolitical Times:





Posted in Biotech & Pharma, Genetic Selection, Personal genomics, Pete Shanks's Blog Posts, US Federal


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