NY & Calif. Act to Stop Web Gene Testing Firms

Regulators in New York and California target certain Web-based genetic testing companies

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CEO SUMMARY: Events in the past month indicate that a war is developing between Internet-based companies offering genetic tests to consumers and state and federal health regulators. New York state authorities have sent letters to at least 31 such companies in recent months. Then, on June 9, the California Department of Health sent cease-and-desist letters to 13 Web firms. Just days later, the Federal Trade Commission disclosed two investigations of genetic testing companies.

BATTLE LINES ARE FORMING between companies offering genetic testing to consumers over the Internet and state regulators in California and New York. At stake in this developing war is how genetic testing will be regulated at the state and federal level.

Triggering this war is the explosion in the number of companies already on the Web offering genetic tests and genetic testing services directly to consumers, frequently without the involvement of a physician in either the ordering of the test or in its interpretation for the consumer.

THE DARK REPORT considers emerging efforts to regulate genetic testing offered directly to consumers as having the potential to be harmful to the established network of clinical laboratories that serve physicians, hospitals, and other providers—and that is not an outcome intended by legislators and regulators. As state and federal regulators attempt to constrain and control genetic testing activities they consider abusive, they run the risk of over-regulating the ability of the nation’s established clinical laboratories to develop new diagnostic assays in ways that have been traditionally accepted by the scientific community.

Health regulators in New York State opened the first battle front in this new war. Since November, 2007, state authorities have sent letters to at least 31 companies that offer genetic tests directly to consumers. The letters inform these genetic testing companies that they must be licensed before they can offer genetic tests to residents of New York state.

The second battlefront in this developing war came last month. On June 9, the California Department of Public Health sent cease-and-desist letters to 13 companies offering genetic tests to consumers. According to department spokeswoman Lea Brooks, companies that received a letter have 14 days to provide documentation of their laboratory’s certification with requirements of California and the federal government. The companies must also provide proof that tests they sell to California residents are ordered by a physician, as required by California state law.

Strong Enforcement Action

California laboratory regulators are giving every indication that they are ready to take strong enforcement action. On its blog, Wired reported on a conference call con- ducted on June 13 by the Department of Health with members of its Clinical Laboratories Advisory Committee. Wired characterized unfolding events as the trigger for a major confrontation, writing that “the [California] health department actions should be viewed as a challenge to the viability of the nascent industry.”

During this call, Karen L. Nickel, Ph.D., Chief of the Laboratory Field Services at the California Department of Public Health, stated that “We have worked with our legal office and have full support for this…We [are] no longer tolerating direct-to-consumer genetic testing in California.

“These businesses are apparently operating without a clinical laboratory license in California,” observed Nickel. “The genetic tests have not been validated for clinical utility and accuracy… and they are scaring a lot of people to death.”

Scientific validation of the genetic tests offered by the companies receiving cease-and-desist orders from California may become a focal issue in the public debate about unfettered consumer access to genetic tests. In the cease-and-desist letters sent out on June 9, after notice of: 1) state requirements for licensure; and, 2) that a physician must order the test; the letter states “In order to be granted a California clinical laboratory license, in addition to meeting all other licensure requirements, [company name] must provide satisfactory validation documentation to verify the test performance specifications of all genetic tests.” (Italics by THE DARK REPORT.)

The request for satisfactory validation documentation is notable. California reg- ulators clearly intend to begin separating genetic tests accepted by the scientific and medical community—and in clinical use—with genetic tests offered to consumers over the Internet that lack generally-accepted scientific research and clinical studies, and that may involve a combination of unproven clinical value and unethical promotion to consumers.

Even as news of California’s cease-and- desist letters was rattling the Web-based genetic testing industry, a third battle front was opened, this time at the federal level. On June 12, Senator Gordon Smith (R-OR) conducted a roundtable meeting on genetic testing. A variety of stakeholders participated and discussed scientific, ethical, and regulatory issues involved with genetic testing. At this roundtable, Matthew Daynard, Senior Attorney in the Federal Trade Commission’s (FTC) Bureau of Consumer Protection, Advertising Practices Division, disclosed that the FTC has two active and ongoing investigations of direct-to-consumer (DTC) genetic testing companies.

Three Government Actions

Until now, these three separate activities have not received much attention from the laboratory testing profession. Yet, individually and collectively, these three regulatory initiatives send a clear message. Genetic testing is now an issue at both the state and federal levels. Regulators and elected officials are ready to take steps to protect consumers by controlling perceived abuses and preventing the potential misuse of genetic science.

Should these concerns lead to regulatory overkill, that will hamstring the efforts of established in vitro diagnostics (IVD) companies, academic centers, and clinical laboratories to develop, validate, and introduce new diagnostic assays to the clinical community.

Already, the silicon valley crowd is interpreting the actions of the California Department of Health as a curb on consumer rights and freedom to access the healthcare services they want. Advocates from this community are drawing battle lines based on the consumer’s ability to choose their own products and services.

In contrast, both the lab medicine profession and the healthcare establishment recognize the myriad of issues that come into play as new science and diagnostic technologies surface and are evaluated for clinical effectiveness. It is often a long and frustrating road to establish agreement and consensus across healthcare as to when a newly-developed laboratory test is ready to become the standard of care. Look at the efforts, reaching back into the 1990s and 1980s, to improve the conventional Pap smear. Even 12 years after the first FDA clearances for new types of Pap tests, pathologists and clinicians are still learning about the technologies and appropriate ways to utilize these tests.

The point here is that, like with so many other diagnostic technologies, the laboratory medicine profession is again at this familiar crossroads, where the potential of genetic medicine is recognized, but not yet a reality. It is a moment when advances in genetic science have advanced to where events are outstripping the ability of existing state and federal laws and regulations to effectively guide science while protecting consumers from charlatans and frauds.

California Sends Cease-and-Desist Letters To 13 Internet-based Gene Testing Companies

LAST MONTH, THE CALIFORNIA DEPARMENT OF HEALTH sent “cease-and-desist” letters to 13 companies that operate Web sites and offer genetic tests directly to consumers. California is requiring these companies to hold valid state and federal laboratory licenses, to only perform testing that is ordered by a physician, and to provide documentation about the scientific validity of the genetic tests they offer. California has declared that it does not allow direct-to-consumer genetic testing to state residents.

These companies received letters from the State of California:

Company                  Web Site                              Types of Genetic Tests        Model

23andMe www.23andme.com Broad genome scans Info only
CGC Genetics www.cgcgenetics.com Individual disease & gene tests Info only
deCODEme Genetics www.decodeme.com Broad genome scans Info only
DNA Traits www.dnatraits.com Heritable disease testing Info only
Gene Essence www.geneessence.com Genome wide arrays Info only
HairDX www.hairdx.com Hair loss risk assessment Info + product
Knome www.knome.com Whole genome scans Info only
Navigenics www.navigenics.com Broad genome scans Info only
New Hope Medical www.newhopemedical.com Nutrigenetic testing Info + product
Salugen www.salugen.com Nutrigenetic testing Info + product
Sciona www.sciona.com Nutrigenetic testing Info + product
Smart Genetics www.smartgenetics.com Alzheimer’s risk testing Info only
Suracell www.suracell.com Nutrigenetic testing Info + product

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